Market Analysis – Technical View
Published on Wednesday, September 2nd, 2009 at 12:41 PMAuthor: insight95in (92 Articles)
Sixteen Turns Bitter
The Nifty lost 37 points over the day to close at 4625. Another immensely volatile day at the markets as the indices rallied well in the first half and got close to the recent highs only to abruptly break support levels in the second half leading to a freefall towards the end. The level of 16000 is turning out to be a huge resistance as the index has corrected from close to the same more than six times in the last few weeks. Technically, the level remains a crucial MT fibonacci retracement based supply point. The daily oscillator study, which we first pointed out as a concern last Friday, is the sole reason behind the pullback/decline in the last couple of days. The fall has helped the study move away from the OB zone, which is a healthy sign. Based on Elliot studies, it is a normal corrective wave within a larger uptrend. We maintain our worst-case levels on the downside of 15300/4580 from where the next phase of the uptrend should begin. There is also no change to our bullish ST target of 16500/5100. Overall, the “shakeout” yesterday is healthy for the market sentiment and uptrend making the risk/reward favourable for longs at this point.
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