Sunday, June 10, 2012

CNX Nifty 50 - Triple Screen 'Technical Analysis' - Week: 04 June to 08 June, 2012 - Bulls stampede to Channel top!

Learning from the Past weeks:
We called the end of Bear Times and start of consolidation 4 weeks ago (click).
We reiterated that the Nifty was consolidating couple of times after that (click) and (click).
The Nifty bounced of the extremes of our defined range - fairly accurately.
Then last week we suggested that a forceful move above the 34 EMA, would signal a Bullish breakout (click).
The Nifty spend the last two day above the 34 EMA, with the Bulls in charge of the Short Term.
Where are we now and where are we going to next?

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 - 08 June, 2012. 

The Month candle changed color in one week.
The CCI indicator shows the trend of the month.
The confluence of the 5 EMA and 34 EMA is the current resistance.
Bulls need to break this resistance, to get back the advantage.

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 - 08 June, 2012.

The STS Support Resistance line (red), accurately told us that the reversal was on..
Support for Bulls was at the 200 SMA - as suggested last week.
The Bearish Engulfing of last week was negated.
We now have a 'Bullish Engulfing' and its possible successor is the 'Three Outside up' to study.

Bullish Engulfing:
Three Outside Up:

Nifty 50: Short Term View (or) Day Chart, each candle is 1 week's price action  (or) EOD Chart:
CNX Nifty 50 - End of Day (EOD) Chart - 08 June, 2012.

Along with the 200 DMA on the EOW, the Fibonacci 61.8% on EOD, was suggested as Support for Bulls - in the last study.
Taking off from this Level, the Bulls cracked the 34 EMA and the 200 SMA to touch the 50 SMA.
The volume for this breakout, does not show the force one expected, as seen in the bars above.
The gap between the 200 SMA and 50 SMA, that we saw falling from 80 to 40 last week, is now lower at 20 points.
Channel top (red line) is achieved.

Looking forward into the next week:
Avoiding a bearish cross of the 50 and 200 SMA, would require the Nifty to keep moving up with the current rate of climb - tough ask.
The Bullish pattern on the EOW and the channel resistance on the EOD are what would define the action for the opposing camps next week.

Bulls are the flavor currently.
Intra-week updates shall be up.