Sunday, January 29, 2012

CNX Nifty Technical Analysis: Week ending 27 Jan 2012

Recap: The Nifty closed above the crucial 34 EMA on the Weekly chart and is hanging on to the 200 DMA on the daily charts. Another good week for the bulls. Lets check out the action with our Triple Screen Analysis.

Nifty - End of Month Chart - 27  Jan  2012
Nifty End of Month Chart:  After closing above the 5 EMA last week, this month's candle now is approaching oversold as seen on the indicator at the bottom of the EOM chart above. Let us now zoom into the highlighted area with Weekly candles as in the chart below.

Nifty - End of Week Chart - 20 Jan 2012
Nifty End of Week ChartA firm close above the crucial 34 EMA is the fist step towards breaking a 13 month resistance line - our channel top - shown in red above. Notice also the resistance at the STS indicator at the bottom of above chart. For a sharper picture we focus now on the encircled area with line charts on the End of Day charts below.

Nifty - End of Day Chart - 27  Jan  2012
Nifty End of Day Chart A: From being exactly at the blue line last week, price closed this week at the 200 DMA with a 'Hanging Man' candle pattern. Momentum is with the Bulls and Fib 76x is the target for medium-term Bullishness overall. The 34 EMA is downside support.

Looking ForwardBulls may face resistance this week around the 200 DMA but bears cannot really get themselves into the game unless the price stays below the 34 EMA or in the very short-term, below 5160.  So that can be our range as marked on the EOD chart above. Despite the recent disconnect of the Nifty with US markets we should watch this month's close of the S&P 500 - read analysis posted here