MyValueResearch

Review of S&P CNX NIFTY as of 16/1/2009 (weekly basis)

Open 2,868.8501

High 2,869.2000

Low 2,701.7500

Close 2,828.4500

Change -44.5500 (-1.55%)

A black body occurred (because prices closed lower than they opened). During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 21 white candles and 29 black candles for a net of 8 black candles. A long lower shadow occurred. This is typically a bullish signal (particularly when it occurs near a low price level, at a support level, or when the security is oversold).

NIFTY closed above the lower band by 33.5%. Bollinger Bands are 103.32% wider than normal. The large width of the bands suggest high volatility as compared to * S&P CNX NIFTY’s normal range. Therefore, the probability of volatility decreasing and prices entering (or remaining in) a trading range has increased for the near-term. The bands have been in this wide range for 14 period(s). The probability of prices consolidating into a less volatile trading range increases the longer the bands remain in this wide range. The current value for the 14 period RSI is 36.4886. The RSI and price are not diverging.

Summary

The current market condition for * S&P CNX NIFTY is: Very Bearish

The close is currently below its 200 period moving average.

The close is currently below its 90 period moving average.

The close is currently below its 30 period moving average.

Nifty has corrected 14% since it faced the resistance at 3147 levels – to make a low of 2702 and closing at 2828 levels, recovering nearly 4.5% from the low. On weekly charts Nifty is indicating immediate resistance at 2860 but on the lower side Nifty is facing some support around 2740 levels on closing basis. One can expect some consolidation this week and Nifty could move in the range of 2700 – 2940 levels.

Trading Tip
Technical analysis helps you detect insider buying and selling. Charts reflect all trades by all market participants-even by the insiders. They leave their tracks on the charts just like everyone else- and it is your job as a technical analyst to follow them to the bank.