Nifty-Technical Overview(19-6-14)

Nifty closed at 7558.20 on 18-6-2014

SUPPORT:- 7533.55 / 7487.55 / 7477/ 7409 / 7340 / 7263 / 7229/7200

RESISTANCE: 7563.50/  7631.70/ 7656.40/ 7678.50 / 7700

Nifty opened on flattish to positive note and made a high of 7663 for the day but  did not sustained above the  short term DMA of 7595 and went down sharply and hit a low for the day at 7515.50 before closing down at 7558.20.this move signifies that correction is still on.

Nifty’s today’s close  was disturbing and given an indication that the correction may last little longer and may be deeper also.

Technical View:-Nifty is making lower top and bottom on the line chart and technical parameters are showing negative divergence on the daily chart and if it comes into play then it can drag down the nifty to 7220 level in days to come, but I always say that divergence should be viewed in sync with moving average placements and not in isolation. Since nifty is below short term DMA therefore I am apprehensive that the negative divergence could play spoil sport .

The divergence could only be negated if nifty goes above short term DMA which is placed at 7595 for 19-6-14 and stays and close reasonably above 7631.70,or if it could close above today’s close of  7558.20 on 19-6-14 and then crosses 7631.70 the next day and close above this, on the other hand if nifty breaks 7533.55 level and closes below this and finally goes below 7487.55 then the negative divergence will come into play. 

REMARK:- Avoid long calls till the clarity on  down correction completion is visible because chances of negative divergence coming into play looks possible.Therefore aggressive trader can try short call below 7533.55 with a stop loss of 7570 for a target of 7477 or below

   NOTE:-
1.PRICE STATED HERE IS OF SPOT MARKET.
 2.RECOMMENDATIONS ARE VALID TILL THE STOP LOSS IS TRIGGERED.

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