NIFTY FUTURE WEEKLY
One more week that has gone directionless. Last week Nifty Future traded with 173 points range - much smaller range compared to the previous week. The weeks' high was 5573 and low was 5400. Friday's low of 5413 was just above the previous low of 5400. As such, I had indicated that bearishness will accelerate only below 5375. The week closed at 5460 and the weekly candle represents a doji - suggesting neutral bias.
On the weekly chart, I have shown an inverted flag pattern. On previous occasion we had range bound movement for 7 weeks. This time around, we have completed 6 weeks and hence next week should be critical for providing direction. Another point worth noting is that the breakout point on either side is almost 200 points away from last week's close of 5460.
As the oscillators on the weekly chart continue to remain in the sell mode and Nifty Future remains below 5555 level, I continue to believe that the odds of Nifty Future breaking 5200 level remain high. As you must have seen over the past weeks, all sorts of events natural/man made are happening which do not provide much enthusiasm for the upside.
The first signal for the downside will be provided when 5375 is broken and for the upside caution is advised above 5555.
We are currently trading just above the much traded zone of 4700 - 5300 during Sept 2009 to Jul 2010. During that period we had traded this range almost 4 times before breaking out on the upside (thanks to the FII money pouring in). May be the market is waiting for some strong news/event that would provide reasons good enough to pierce this much traded range.
Let us hope next week the market gets a definite direction, till then - keep trading the range.
Have a nice weekend!
Ketan Asher.
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