2009.12.08- Report NIFTY

NIFTY- DECEMBER 11, 2009

 

ORIGINAL REPORT LINK: http://www.technicalanalysisbase.com/nifty/nifty--december-11-2009

 

The NIFTY came ever so close to significantly penetrating above a resistance level tested two times in the past couple months. As all other technical analysts, I am looking for a significant close above the 5182 level to mark the continuation of the previous up trend.

 

Now what is the likelihood of NIFTY breaking out of the current resistance? Such an occurrence is quite unlikely because of the negative divergences evident in both RSI and MACD. In other words, Nifty has reached its previous October peak but both RSI and MACD lag significantly lower than their previous peaks.

 

So until the Nifty posts a significant close beyond 5182, I’ll be content to go short or play the waiting game for the next 4-5 sessions.

 

The up trend is still intact but is looking a little fatigued. Many market participants have been expecting a consolidation phase for a while and the market has been ruthlessly whipsawing them.

 

·        Bullish Cases:

o        If Nifty penetrates above 5182, then it should achieve 5270

o        Extreme case: If an ascending triangle is in play, then the minimum price objective upon upside penetration is 5900

 

·        Bearish Cases:

o        A correcting Nifty from this point on will be supported at the 4900 and 4660 levels.

o        Assuming a regular flat (3-3-5) correction, the five wave impulse should carry Nifty down to a maximum 4400-4450.

o        Extreme case: If a double top is in play, then the minimum price objective is 3950.

 

 

 

Sanjeet S. Parab

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