Long term and Intermediate term trends are up.Short term trend is down.Wave 3 could not complete its minimum target of 5359 and slipped from 6339 after good selling at higher levels therefore correction of upmove from 5349 will be considered. If Wave-3 minimum target of 6359 would have achieved then ABC correction of whole Wave 3 have been considered which started on 13-07-2009 from 3919. At present correction of upmove between 5349- 6339 will be considered.
Previous week candle is "Engulfing Bearish". It is moderate reliable reversal pattern. Follow up weekly bearish candle will mean sharp down moves. It is showing strong possibility of correctiocion.
Daily and intraday charts of Indices and many pivotal stocks are showing good selling at higher levels. Indian markets slipped sharply in last week. Technical positions are as follows:-
1- Strong resistance range is:-6260-6315
2- Rising trendline of on going uptrend has not broken yet
3- Last 2 sessions Nifty intraday pattern is Fountain and it is consoldation formation.
4- 1st Support- 6033-6057(Last Gap)
5- 2nd Support- 5932-6000(Strong support range)
6- Last support range 5932-6000 is strong support range and Nifty got support 3 times within this range previously.
1- Daily chart
Daily Indicators and Averages Analysis
1-Averages- All the lower period EMA(8,21,55,200) are above higher period EMA and showing strength in trend. Nifty moved below 8 EMA and above all averages.
2-Bollinger Band- Nifty is in the middle of both Bands and moved below average line therefore showing weakness.
3-MACD- Both lines are in positive zone and has shown negative divergence. MACD intersected Average line downward last Friday therefore it is giving down move confirmation. Correction has started and downward intersection after negative divergence has given more down moves signals.
4-ROC- At equilibrium line and moving down after showing negative divergence in positive zone therefore indicating more downmoves possibilities.
5-RSI- Below equilibrium line and moving down after showing negative divergence in positive zone therefore indicating more downmoves possibilities.
6-Slow Stochastic- Both lines are below equilibrium line and near oversold line. As it is very short term indicator therefore moved near oversold line after last week selling and indicating very short term upmove possibility.
7-William %R- Below equilibrium line and above oversold line. As it is very short term indicator therefore moved below equilibrium line after last week selling and indicating very short term upmove possibility after after litle more down move.
2- Daily Indicators and Averages chart-
Conclusions
Firstly 2 following possibilities will be considered after follow up moves on Monday:-
1- Correction started after good higher levels selling and last 2 sessions intraday patterns are indicating consolidation formations therefore if follow up selling does not develop immediately then minor pull back rally possibility can not be ruled out in the begining of next week.
2- Last support range is 5932-6000 and if follow up selling develop on next Monday then breaking down possibility of 5932 will be high. Intermediate term trend will be down below 5932 and that will mean down moves from 3 weeks to 3 months.
Only minor pull back rally expected which will not be able to move above 6250 amid whatsoever bullish sentiment/news. As good selling at higher levels therefore complete consolidation requires for next rally.
MACD has given down move confirmation,Negative divergence in MACD,ROC,RSI are confirming weakness and higher levels intraday selling in Indices and most pivotal stocks therefore more downward as well as retesting 5932 possibility is high in the coming week.
Only minor pull back rally possibility in the begining of week otherewise finally testing 5932 and breaking down of 5932 as well as intermediate term trend turning downward possibility is high in the coming week.