Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Indian Stock Market Detailed Technical Analysis with Chart studies

Stock-Markets / India May 01, 2010 - 06:32 AM GMT

By: StocksBuddy

Stock-Markets

Best Financial Markets Analysis ArticleAs was expected, there were wild moves on both sides owing to Options expiration. Since largest OI was centered around 5200, Nifty hovered and closed pretty much near it. After trading in a very narrow range all of last week, it closed pretty much where it left the previous week. This shows the tug of war between bulls and bears. Neither sure which way to trade at the end of the day/week. In our last analysis though we stated that there is chance of Negative Divergence building up and that would be give us two things.


  • Confirmation that the trend down has started.
  • Good entry point for going short.

Looking at the chart below it does infact looks like we are still in the process of building that negative divergence. On the price chart we have clearly formed a down-ward trend/channel. Indicators though are mixed. Some looking good, while others implying a potential sell-off in the coming week(s). US markets closed at LOD (low of the day) and were clearly down big time on friday. This will definitely have a negative impact on Asia open on monday.

Technically Speaking:

Take a look at the Daily Nifty chart below.

The above chart uses TD Demark indicators extensively.

Positives:

  1. RSI still above 50
  2. Almost all of the TD* indicators circling back nicely to the upside.
  3. MACD may be in the process of creating a positive divergence.
  4. The best of all, Nifty managed to close above center BB line.
Negatives:
  1. We have demonstrated the importance of BB center line. Anything that trades below this line, is a potential short. After have crushed through this line a few days back, nifty is finding it difficult to move back above it. Extremely negative.
  2. RSI, which is one of the most important indicators, is clearly showing negative divergence.

Next Week:

Weekly nifty chart shows clear indecisiveness, may be it was due to options expiration. We may get more clarity in the coming week(s). Chart from this week is not really that "telling" and hence it is difficult to state which direction market will head next week. The chart below is the ratio chart of Indian VIX (Volatility index) to Nifty. This chart shows the correlation between Volatility and the moves in Nifty. The lower this chart, the higher the chances for Nifty to move up and vice-versa. This chart gives more clarity to the picture. As it is clearly an inverse to Nifty direction, it is full of positive divergences upon itself. Most importantly it is still above it's BB center line. MACD Histogram is positive. Unless market moves to the upside, this chart tells us that we will have much more pain for nifty to the dowside in the coming days/weeks.

Trades for Next week

If you have already initiated a short position, trade with strict SL. Not really a good idea to go long in the coming week since there is a chance of negative divergence developing up. It is better to wait until the dust settles down and nifty clearly tells us which way it is going to go. Yes, you may loose a few points early on, but there will be lot more that you can catch with more confidence. If we are unable to break above BB center line in the coming week, one can accumulate short positions as we go forward. Have a Wonderful Trading Week ahead.

Regards

IndianStockCharts.com Team

Disclaimer: At the time of this writing, neither the authors nor our team held any positions on any securities unless otherwise explicitly stated. All information above is only for educational purposes and you are responsible for your own actions.

http://www.StocksBuddy.com

India's No.1 Trading Community From the desk of StocksBuddy.com Analysts comes the above article. SB Analyst team comprises of experts from varied fields such as Technical Analysis, Fundamental Analysis, Macro-Micro Economics, World Affairs, Currency and much more. Apart from user contributions, our analysts post analysis on StocksBuddy.com on a regular basis. For more details, please visit us @ http://www.stocksbuddy.com/blogs

© 2010 Copyright StocksBuddy - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in