NIFTY FUTURE WEEKLY
After two big range weeks, that too on the down side, the last week gave some respite by being a narrow range week (of 125 points) but only after making a new low at 5629. In any case we ended with lower top/lower bottom one more time. The positive during the week is that we have closed in the green and on the EOD chart we had a double bottom during the week. The overall structure of the chart still does not give any confidence for the up side.
The next week may turn out to be a challenging one with many significant events lined up - that too in a shortened week due to Republic Day Holiday on Wednesday. The significant events are - RBI Credit policy on Monday and FNO settlement scheduled for Thursday and peaking of results announcements by many Corporates.
On the basis of weekly chart, the first sign of strength comes only when Nifty Future crosses 5810. The next resistance comes at 6000 in the form of Trend Line (shown in Brown color). Please note that Nifty Future can start a fresh down side, even after touching this trend line.
Monthly candle as it appears today, does not give much hope for a major up side in the near future unless it closes in the region of 6000. As things stand today, it is preposterous to even consider the same unless RBI policy announcements have to induce so much confidence to change things in just 5 trading days.
As regards the down side, once we go below 5629 we have to factor the possibility of 200 points based on inverted flag pattern on the EOD chart. This may be possible once we move below 5600 as it would break the channel (in yellow shade) which is in formation since May 2009. Key supports on the down side are 5565 and 5510.
Have a nice weekend!
Ketan Asher.
Note: I have uploaded a write up titled "Andrews Pitchfork on the Long Term Charts" which may be of interest to the readers.
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