Sunday, February 12, 2012

CNX Nifty Technical Analysis: Week ending 10 Feb 2012

Recap: We defined the Fib 76x (Fibonacci retracement 76.4% drawn on the EOD chart) as the resistance for the week (for post click here). We observed the Price hit this mark, and fall back, early last week (for post click here). We then observed the close above 5400, which however fell short of the Fib76x, and took a call that the range was intact (for post click here). Nifty closed below the 5400 and within our range marked on the EOD by weekend.

Nifty - End of Month Chart - 10 Feb  2012
Nifty End of Month Chart (EOM): Month candle continues to stand strong on the 5 EMA. Bullish cross of the 5 EMA above the 13 SMA would imply long term strength in the index. We analyze the highlighted area with the EOW charts next....

Nifty - End of Week Chart - 10 Feb  2012
Nifty End of Week Chart (EOW): The candle, last week's Price action gave us, was a Doji. The position implies a possible 'Bearish Doji Star', which is only a moderate indicator of trend change. We should look out for a 'Evening Doji Star' a stronger pattern which implies that the Bears really mean business. The primary condition for above happening is that price all through next week stay below the Doji's body (approx. 5379). ...  Study link below..

Nifty - End of Day Chart - 10 Feb 2012
Nifty End of Day Chart (EOD): The Price refused to cross the Fib76x on closing basis last week. So our range remains same and as shown. Bulls remain strong above the 200 DMA and would look at reaching the red top line. Watch the Fib76x to 5 EMA zone.

Looking Forward: The possibility of a 'Evening Doji Star' on the EOW chart, the strength that the Bulls displayed above the 200 DMA, the Doji of last week and our EOW analysis of the SP500 (post, below this one) - together give us a sense that if the Bears defend Fib76x, they can take the Price all the way to the lower end of our range on the EOD i.e 200DMA. Bulls however are still in the driver's seat if they close the index above the Fib76x.