Important Observation In NIFTY

Fresh weakness only below 5980 Levels.

Expect Strong UP above 6050 levels.

Yet Non-decicive trend continues.  

On the other hand trading above 6050 should emerge strong buying.  

LOW VOLUME MOVEMENT MAY GIVE UNEXPECTED FLUCTUATION.

Another day passed without much gain or loss and NIFTY continues to trade in the NRB move (Narrow Range Bar)

Yesterday we have observed a pattern called Harami White and then today (i.e. on last trading day no signal or confirmation.

(HOWEVER I HAVE FOLLOWING OBSERVATION FROM INTRA DAY TIME FRAME GIVEN IN NEXT PAGE NO 2)

After so many days we have observed some momentum in cash segment as well as in other oil stock. Something is cooking up and as we have passed so many range trade and hence the unidirectional move is very near and in next 48 hours should give either directional breakout.

Close above 6015 or trading above 6080 will give strong up move in the upward direction while trading below 5980 should trigger fresh selling signal.

Behavior of NIFTY from last swing low 5721. It is observed that it has a tendency to correct its previous swing by 0.50% to 0.618% and If this is the case then yesterday NIFTY corrected its last swing by 0.618% when NIFTY SPOT registered 5982 (0.618% is at 5980).

Considering the past attitude we can say that now NIFTY should not go below 5980 in any case. Even after violating 5980 same day recovers and starts trading above 5980 it will be a clear buy signal. So now without violating 5980 if 6050 is surpassed then next probable peak at 6127 area.

Swing Type	Bottom	Top	Net Gain	% Gain	Probable TGT
Swing I	5721.15	5887.65	166.5	2.910254
Swing II	5804.1	5953.95	149.85	2.581796
Swing III	5855.05	6023.8	168.75	2.882127
Swing IV	5940.36	6045.75	105.39	1.774135
Average Gain From Low			147.63	2.54
Expected Swing	5980 + 147.63 OR 2.54%	????	147.63	2.54	5980 + 147.63 =        6127.62



… Markets are constantly changing.  As a trader, you need a strong foundation to weather the storm.  Over the last few years, as traders, we have had to weather a devastating storm. 

NIFTY after completes 0.618% retracement, market is now not giving clear direction.

From the above chart a small thing is emerging on the first look. The EMA which is placed on the chart is turned red and moving downward since last 15 days and the force is turned down. From last three days it is trying to come out but failed to do so. On the other hand ADX (lower window) is in bearish mode (since red -D line is above green +D line indicates that though market is trying to show some strength or rally but in fact smart money or buyers are not there unless +D moves above –D. So short term immediate trend is bearish or weak and unless this both indicator turns green rally will be difficult to sustain.

·          The Relative strength of the small cap index and CNX midcap v/s Sensex have formed an H & S near a triple top range. Each time the RS has fallen from the upper end of the range it was followed by 1 year of under performance by small cap stocks. So expect a clear shift in leadership to large caps.

·     The Bottom Line: one more day nifty ended with clueless and turned without any clear picture. However, 5924 and 5884 are more important for the next couple of days.  On the other hand sector wise panic is going more weak like Bank sector weak with -5.17% during the ongoing week. While small cap continues to be under pressure with PSU and MIDCAP WITH -1.41% and hence some strong unwinding can be expected in the coming days. After this panic I expect change in trend.

On the other hand surpassing of 6005 and then 6080 will give strong upward thrust. While, metal is coming out from its corrective/bearish phase. Due to rise in international oil price oil sector is gaining strength. Even software stock is showing strength due to strengthen of dollar.

On technical front NIFTY is trading below its EMA which is turned red and direction is also down hence we can say that the short term is weak