Nifty-Tehnical View(20-6-14)

Nifty closed at 7540.70 on 19-6-2014

SUPPORT:- 7533.55 / 7487.55 / 7477/ 7457 / 7409 / 7340 / 7263 / 7229/7200

RESISTANCE: 7563.50/  7631.70/ 7656.40/ 7678.50 / 7700

Nifty opened firmly and went above the short term DMA of 7595 but could not sustain today also and went down sharply and made a low of 7502.55 for the day before closing down at 7540.70 this movement suggests that weakness is still there .

 The only silver lining in today’s movement was that it went below the closing bottom of 7533.55 several times during the day but eventually closed above that, as long as it hold this bottom on closing basis one can expect bounce back from here. Since the closing is very near the bottom and it is still way below the short term DMA of 7598 for 20-6-14, therefore chances of holding this bottom looks weak .It will regain strength only if it consistently stays above short term DMA and close above the recent closing top of 7631.70.

      (Technical View remains the same as posted on 18-6-14 with change in some figures)

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 7598 for 20-6-14 and stays and close reasonably above 7631.70, or if it could close above today’s close of 7540.70 on 20-6-14 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, aggressive trader can try short call below 7533.55 with a stop loss of 7570 for a target of 7477

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

   3.IN FAVORABLE TRADE TRAIL YOUR STOP-LOSSES FOR MAXIMUM GAIN AND CAPITAL PROTECTION. 

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