Weekly Analysis- 24-01-2011 to 28-01-2011
It is the character of bull rallies that they are tend to test 200-Day EMA in intermediate term corrections and if primary up trend is continued then reverse to rally after some consolidation near it. AsJan 2011 fall was on the back of serial negative news blast without intraday genuine selling patterns and Indian markets tested 200-Day EMA(today at 5650) and after 5 sessions hovering near about closed above it last Friday therefore Long term trend is still up, Intermediate term and short term trends are down.
Previous week and last Friday candle is Doji which means uncertainity in markets but intraday patterns of last Friday and last 5 sessions is clearly suggesting consolidations. Although Weekly and Daily charts are not signalling any side moves but intraday charts are confirming consolidations therefore rally will be seen in the coming week. Consolidation developd at lower levels after every fall and it is shown in following last week intraday chat ;-
1-Genuine Intraday Consolidation Patterns in Last 5 Days chart:-
(Just click on chart for its enlarged view)
10 Days intraday charts are showing consolidation patterns:-
1- Rounding bottom support.
2- Double bottom support at 5630
3- Falling channel break out at 10 days intraday chart and whole day trading above it last Friday.
2-10 Days Intraday Consolidation Patterns chart:-
Wave 3 is on and corrected according to its nature. As negative news flow was strong therefore down moves were sharp and 200-Day EMA tested and Nifty hovered around it last week before weekly closing above it. This fact should also be kept in mind that Nifty tested 200-Day EMA in May 2010 before 1553 Points Rally and until nifty will not sustain below it till then any type od down move will not be considered. Falling Channel range bound moves in Last 4 months and after testing lower line of channel Nifty has to sustain below it also for any down move confirmations but support seen here in whole last week therefore upmove within on going channel will be seen first.
3- Wave3 Testing & Sustaining above 200-Day EMA:-
Firstly vertical falling channel formation in Jan 2011 and after that narrow range trading seen within 5630-5745 in last week. Nifty got strong support at 5630 and good consolidation range is 5630-5700. Jan 2011 Falling vertical Channel broken out last Friday when Nifty traded whole day above it with intraday consolidation patterns within 5680-5715.
4- Jan 2011 Correction and last 6 sessions Consolidation CDhart:-
Coonclusions
Short term and Intermediate term trends are down but long term up trend is intact after Jan 2011 1st half cracking down. Nifty got strong support at 5630 and last week good consolidation seen within 5630-5700. 200-Day EMA is today at 5650 and consolidation seen its near about therefore long term up trend is safe. As good support and consolidation in last week and Jan 2011 Falling vertical Channel broken out last Friday when Nifty traded whole day above it with intraday consolidation patterns within 5680-5715 therefore;-
"Fistly rally expected in the begining of coming week"
As intermediate term correction completion signals in last week therefore;-
"Strong Pull Back rally will be seen"
As good consolidations at lower levels therefore:-
"Whatsoever may be RBI credit policy on 25th Jan 2011 but rally will be seen after its declaration"