NIFTY FUTURE WEEKLY 16.12.2010
The past week ended on a strong note as market made a sharp up move in the last one hour on Thursday, but not strong enough to leave any clear cut guidance for the next week. On the weekly chart you will find that though Nifty Future made a higher bottom last week at 5797 and the week's high remained at 5985 - same as that on Monday when it made Open = High.
As Nifty Future has not been able to cross previous week's top of 6094, it appears that Nifty Future may be forming a Flag pattern. This pattern formation will get confirmed if during the next week we are not able to cross the level of 6100 on the up side or 5750 on the down side. While upside breakout will negate the flag pattern, but breakout on the downside will indicate a deeper correction - which does not look probable looking at the last week's candle.
While on the higher side, we will gather momentum only above 6125 and maybe head for 6350 levels. On the down side, the major worry sets in only below 5750.
We are now left with 10 trading session for the current calendar year. I would like to caution the readers that in even in the best case scenario of Nifty Future able to cross 6125 levels, one need not get too euphoric as the festival mood sets in.
Incidentally with the close of the current year, we will be completing the 1st decade of this century. The point I would like you to note here is that even if the year ends near the high, the market can turn around/fall at the beginning of the next year if it has to - same as in the year 2008. Hence caution at higher level is advisable.
Have a nice weekend!
Ketan Asher.
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