Nifty for 26 Jun 08

These are my personal musings. These are not in any way meant to be trading advise. To view the full chart, right click and open in a new window.

I am posting the charts for yesterday and today.

In my last post, it was suggested that we may see a short term downside target of 4185. The Nifty did achieve a brief bottom at 4093.

As of now, given that we have a derivative expiration, the event based short covering has provided a relief rally to the upside.

Yesterday’s chart shows the touch points of the short term and the obstacles which the Nifty bull would need to face in the recovery of the Index.

Looking one day into the future, we will also notice, that if the Nifty closes above 4325, then a bullish hammer will form on the weekly chart. This is a very powerful reversal signal.

Thus we may see some substantial recovery. However, as a guideline, we may use the first chart to anticipate the points of resistance.

There has been an increase in volumes but the volumes are not entirely bullish. Therefore, even though the Index is rising, the sentiment is still not totally bullish. I expect some short term resistance between 4370 and 4390. The Index may fall slightly. But to keep the fragile bullish sentiment intact, the Index must stay above the last bottom of 4093.

Trade happy after planning your trade.