Bears will regain control below 5800!! A tick of 5775 will open doors for 5600.

 Date: 18^th March 2013

Last week view has worked well and Nifty witnessed a fall from 5970. As expected, it respected the resistance line and then didn’t close below 5840 to bounce back again.

I have plenty of charts to paste for your observation in this week write up. Figure 1 is 10 box High low chart of Nifty. Opposing Pole pattern has formed and low below 5800 would make this chart look really negative. A downside vertical count will be activated as well.

10 box close only chart (Figure 2) is yet to see opposing pole pattern but it will be formed if it closes below 5800. Opposing pole is bearish pattern and indicates weakness in recent upside rally. Figure 3 is 0.50% x 3 High low chart of Nifty to analyse the larger and compressed picture of 3 box price trend. This horizontal top formation at levels around 5950 has made that top very important resistance level for any upside rally from here. The support at the moment exist around 5780 – 5800 levels. As shown in the chart, the picture will look bad if Nifty will see a tick at 5775 during this week.

Figure 4 and 5 is Fib cluster levels of Nifty daily charts. I keep checking clustered levels of retracement and extensions from important tops and bottoms. Extension from corrective move A shown in Figure 4 has achieved it course. Figure 5 suggests that 5900 – 5950 is important resistance zone for Nifty from here and support lies around 5780 – 5800 levels.

The price structure observation through various charts are pointing towards 5780 -5800 levels for supports and 5920 – 5950 for resistance.

From trading point of view, Sell around 5900 - 5920 if price rallies from here. New upside count will be activated above 5960 and fresh longs should be taken only if that happens. Bears will regain control below 5800.  A tick of 5775 will open doors for 5600. Shorts to be initiated with stoploss placed at 5840 on closing basis if that happens.

     Figure 1: Nifty 10 x 3 HL Point and Figure Chart

    Figure 2: Nifty 10 x 3 Cl Point and Figure Chart

    Figure 3: Nifty 0.50% x 3 HL Point and Figure Chart

    Figure 4: Daily candlestick chart of Nifty

    Figure 5: Daily candlestick chart of Nifty

-          - Prashant Shah

Disclaimer:
All information provided above is for general information purposes only and does not constitute any investment advice. Company or Author shall not be liable for loss or damage that may arise from use of information provided above. The report is purely for information purposes and does not construe to be investment recommendation/advice or an offer or solicitation of an offer to buy/sell any securities. The opinions expressed are current opinions as of the date appearing in the material and may be subject to change from time to time without notice. Investors should not solely rely on the information contained in this document and must make investment decisions based on their own investment objectives, risk profile and financial position. The readers of this material should take their own professional advice before acting on this information.