The Nifty started Trending downwards, last week (click).
Our Weekend analysis (click) showed on the EOW, an 'Old Resistance line' - now a 'Support line' - as the bottom end of the range for the week.
We analyzed above in our EOD Analysis - Intra week (click).
Price Broke through this support line in last week's action.
Nifty 50: Medium Term View (or) Week Chart, each candle is 1 week's price action (or) EOW Chart:
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| CNX Nifty 50 - End of Week (EOW) Candle Chart - 11 May, 2012. |
We have our EOW chart, with only the above Support line, and the Price break highlighted with a blue circle.
Clearly shows that price has indeed cracked through this line.
See also the action on the Stochastic Indicator similarly highlighted.
This one is for the Bears...
Look below for another view..
Nifty 50: Medium Term View (or) Week Chart, with closing prices in a line graph (or) EOW Chart:
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| CNX Nifty 50 - End of Week (EOW) Line Chart - 11 May, 2012. |
We use a line chart and do a 'ditto' analysis as above.
Channel line orientation changes subtly.
Break is yet to happen here.
This one is for the Bulls...
Needless to say its up to the individual trader to choose her/his preference of Candle/Bar or Line Chart.
We just want to present both perspectives.
Do check out same, on your charts too..
Here are some weekend reads, which I use, to study Channels....
http://www.studyforex.com/channel-pattern.html
http://www.investopedia.com/university/technical/techanalysis3.asp#axzz1uZM0ZjLu
http://www.marketvolume.com/technicalindicators/pricechannel.asp
