NIFTY FUTURE WEEKLY
NIFTY FUTURE:
After a sharp bounce in the beginning of the week, Nifty Future closed at 5485. Thus the week's range was 153 points with high of 5510 and low of 5356. While the lower shadow in Weekly candle does leave some hopes for the up move to continue, the point that should not be ignored is that after 8 weeks, we have got lower top/lower bottom on the weekly chart. If this is of any significance, than we need to be cautious - at least till this signal is negated if Nifty Future makes a new high above 5543. It may be just a coincidence that, we have made the top exactly on the 64th day (Square of 8) and now once again we have 8 weeks after which we have made lower top/lower bottom.
RSI and Stochastic are already in a sell mode, and MACD is just getting ready to cut the trigger line to generate a sell signal. Even the divergence between the price and RSI and Price and MACD suggests lack of momentum at higher levels.
In view of the above, I would not advise long position, but rather repeat my suggestion of selling on delivery basis so that one can buy on deep correction. Existing long positions may be held with stop loss of 5460.
Sell position may be initiated below 5430 with stop loss of 5465.
Turning Points for 06.09.2010 will be posted by Sunday evening.
Till then, enjoy your weekend!
Ketan Asher.
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