Sunday, April 22, 2012

CNX Nifty 50 - Triple Screen 'Technical Analysis' - Week: 16 April to 20 April, 2012 - Bulls bounce off the Wall..

We went into last week with a Bearish Overhang (click), Bulls had their back against the wall...
Bulls bounced off the Wall (click) and then despite Global Bear pressures (click) ended the week neutral.
One prospect for the coming week, was discussed and studied (click).
Lets analyze the Index with our three screens, to learn what lies ahead...

Nifty 50: Long Term View (or) Month Chart, each candle is 1 month's price action (or) EOM Chart:
CNX Nifty 50 - End of Month (EOM) Chart - 20 April, 2012. 
The RBG channel on the screen above, covers price action spanning 3 plus years.
The 34 EMA has been good support for the Monthly candles recently.
The 5 EMA's Bullish cross to above the 13 SMA is a given next month, if the Index stays above 5220. 
Bulls continue to be in charge of this long term screen.

Nifty 50: Medium Term View (or) Week Chart, each candle is 1 week's price action (or) EOW Chart: 
CNX Nifty 50 - End of Week (EOW) Chart - 20 April, 2012.
We zoom into the Price action with the above screen and analyze the last 15 odd months.
We studied the Bullish Engulfing (last two candles), and the hope for a Three Outside Up (click) on Friday last.
We notice that the 5 EMA has bearishly crossed below the 13 SMA, and the price faces resistance at 13SMA.
Support at the 34 EMA, has been consistent.
Neither Bulls nor Bears, can claim supremacy on this screen.

Nifty 50: Short Term View (or) Day Chart with closing prices in a line graph (or) EOD Chart: 
CNX Nifty 50 - End of Day (EOD) Chart - 20 April, 2012.
The screen above has an RBG channel with 4 odd months data. We look to pinpoint the immediate action points here.
MACD remains sub zero even as the Histogram has started ticking in the plus.
Index seems to have made another Lower High, one has to see if the previous Higher Low will sustain.
After the Bullish crossovers and channel breaks (click) we have a 'Throwback' to Channel top (look through the free reference links below for more on this).

Throwbacks and Pullbacks:

Looking Forward:
Staying above the 34 EMA(EOD) is critical for Bulls.
The candle patterns on Nifty and Sensex (studied below) on EOW give the Bulls hope.
Bears have used global cues to beat back the Bulls recently - one needs to watch that.
Settlement week again and the sentiment seems to be changing towards the Bulls albeit mildly.

The BSE 30 - Ichimoku Study - Week: 16 April to 20 April 2012 - Bulls Pierce thro'

......Regulars can skip below and go straight to the chart......


We do an weekly Ichimoku study, to complement our 'Triple Screen Technical Analysis', of the markets we study.
When taking the 'weekly' time frame, to use the Ichimoku Cloud, we need to consider...

The standard settings for an Ichimoku Kinko Hyo chart are 9, 26, 52 and are used on EOD charts.  
When Ichimoku was created back in the 1930s, a trading week was 6 days long.  So we have one and a half week(9), one month(26) and two months(52). 
Now that the trading week is 5 days, we should actually use 7,  22 and 44 instead. 
However, the majority of systems, worldwide, still use the old settings 9, 26, 52. 

We need to study markets, on a weekly basis on this Blog.  
How do we fit 52, 26 and 9 into that need?  With one candle being one week?
There are 52 weeks in a year, 26 weeks form two quarters (or a half year) and 9 weeks equal about 2 months.  Fits the old logic - albeit differently.
Presto, we have a longer term view with the same settings!

So, if you like to move off the beaten track, for a on...

Quick Reference : 
Chikou Span - purple line,
Kijun Sen - blue line, 
Senkou Span A - black line, 
Senkou Span B - grey line, 
Kumo - grey shaded area,
Tenkan Sen - red line.

Useful resources (free) from the Web:

BSE 30: Medium Term View (or) Week Chart (or) EOW with the Ichimoku Cloud:
The BSE Sensex 30 - End of Week Chart - 20 April 2012  

Last 6 Signals seen on BSE 30 - Week Chart (EOW) marked on chart above:
1. Senkou Span Cross: Strong Bearish Signal (S)
2. Chikou Span Cross: Weak Bullish Signal (C)
3. The Kijun sen cross: Weak Bullish Signal (K)
4. The Flat Kumo: Bullish Signal (Ko)
5. The Tenkan Sen/Kijun Sen Cross: Weak Bullish Signal (T)
6. The Kumo Breakout: Bearish Signal (B)

Also marked with the blue arrows see...
2: The Chikou Span (purple line) has deflected off the price line, instead of crossing bearishly below it .. This is Bullish. 
3: The last candle has moved back into the Kumo - refer the Bearish Kumo breakout (B
3: Just as in last week, the Price is above the Kijun Sen and M VWAP 34 -  This is Bullish .
3: The last two candles form a Piercing Pattern (Bullish). FYI, we studied earlier (click) that the Nifty showed a Bullish Engulfing with the last two candles, at this same time frame.
4. A Bullish Senkou Span cross seems imminent - may be neutral. 

Here are some free reads for the weekend on the Pattern above...

Conclusion: Bulls have wrested back the advantage and have more than an even chance for a move up.