Technical View on Nifty as on 23/04/2013

Apr 23, 2013 5:00 PM
6 Comments
Daily chart of Nifty as on 23/04/2013
Nifty had entered a mid-term down trend when it broke below 5703 on 28/02/2013 and headed to the first target levels of 5494-70 mid of this series. However from these levels, we saw a very sharp recovery which has led Nifty of levels of 5840 in just five session. Such a sharp pull back may be treated as a bear rally. However this pullback has been halted near 5840 levels.

Importance of 5840 levels:
  • 5842 is our Channel Resistance.
  • 20 week-sma at 5847
  • 10 month-sma at 5839
  • Historically, 5840 always has been a barrier
As such this would be a very strong level to break.

Today Nifty opened at 5840 levels and saw a sharp selling pressure and hovered near 5800 throughout the day, but later on towards the end of the day recovered back.. Even the sharp intraday recovery did not manage to break the level of 5842 and even failed to break previous day's high. Today's close forms a typical engulfing hanging man pattern.

As per Auto Channels, today Nifty triggered the caution level for longs on 10-min and 15 min charts and gave a exit opportunity to positional long traders.
Positionally, Nifty has breached our caution level of 5710 and went ahead to hit the strong wall (the 5840 level) without giving a chance for the shorts to be covered. As such we may likely see a reactive bounce back to 5710 levels (caution level) and then show some consolidation in the range of 5840-5710. But as shorts were trapped near 5500 levels, Nifty may likely head down to 5620-5575 levels as a exit for the shorts.

However, if the strong wall of 5840 is broken, mid-term trend of Nifty would revert back to long and would be a case for fresh analysis.

Trade Opportunity: As Nifty is just near the Channel Resistance (5842), Its an ideal level to go short with almost no risk. The immediate target would be 5710 and may drift down further to 5620-5575. The SL for this trade would be the breach of Channel Resistance.

If you like this post, be sure to share it with your friends!
Its the best way to say a "Thank you"
  1. Auto ChannelsApril 23, 2013 at 6:27 PM

    Yes, very true.

    ReplyDelete
  2. Mahender ReddyApril 24, 2013 at 9:47 AM

    Thanks for sharing Sunil.
    Very important information to plan a trade at his juncture.

    ReplyDelete
  3. Auto ChannelsApril 24, 2013 at 12:30 PM

    @Mahender Reddy Thanks Mahy and most welcome.

    ReplyDelete
  4. EKYMay 8, 2013 at 3:51 AM

    Sir, we can see a trendline resistance also around 5842 level by joining 6111 and 5971 points

    ReplyDelete
  5. Sonu UpadhyayMay 8, 2013 at 3:51 AM

    Sir can we buy 5600 PUTs of May Series as positional trade . And the SL of 5842 should be kept on hourly closing basis or daily closing basis .

    ReplyDelete
  6. Auto ChannelsMay 8, 2013 at 3:51 AM

    @Sonu Upadhyay You may enter puts but the puts are costly as of now and may not give very good gains unless we have a sharp decline. The SL is on closing basis.
    Best would be to go for a hedged futures short and need not worry about SL. If our SL is breached, we can exit on dips.

    ReplyDelete

Subscribe to: Post Comments ( Atom )