Nifty-Technical View For The Week Starting From-18-8-14

NIFTY CLOSED AT 7791.70 ON 14-8-14

Range for the week ended on 14-8-14:- 7796.70--- 7598.60

 SUPPORT: -  / 7731.05 / 7721.30 / 7700.05 / 7662.50 / 7598.60 / 7593.90 / 7563.50 / 7540.10 / 7487.50 / 7481.30 / 7447.20/ 7441.60 / 7422.15 / 7206.70 / 7118.45.

 RESISTANCE:-7796.70 / 7799/90 / 7808.85 / 7840.95 / 7870 / 8060 / 8130.

  (Figures in bold are important)

Nifty opened gap up for the week under review and stood firm throughout the week and had a rise of 228 points, it made a low of 7598.60 and high of 7796.70 for the week and  before closing the week near the high point at 7791.70.The entire week’s movement shows strength in it but I would like to add here that this whole up move lacked volumes, therefore it is  buy on dip now but take long calls with some caution and off course with an adequate stop loss. One should avoid short call now and only think of it if nifty closes below 7760.

TECHNICAL VIEW

1.      ON DAILY CHART:-It looks ok on the daily chart but the on -going up move lacked volumes so be circumspect in long trade, however it has decisively moved above the upper band of short term DMA range and stayed there for 3 days already, the range of short term DMA is between 7712—7680(it changes every day)for 18-8-14, therefore as of now it is buy on dip but be alert in long call  if it starts trading below 7760 and get out of the long trade if closes below 7680. Going up it will face tough resistance at 7808.85,7840.95 & 7870

2.      ON WEEKLY CHART:-  It is ok on the chart . Furthermore it is also above  the upper band of the short term DMA range which is between 7650—7308(for the next week) starting from-18-8-14

The strong negative divergence are still there and if it comes into play then it could take nifty down to 7459.60,7229 & 6694.80 levels but as I always say that divergence should be viewed in sync with the moving average placements and since nifty is decisively above the upper band of the short term DMA on the daily chart as well as on the weekly chart, therefore negative divergence will take a back seat as of now till it breaks the short term DMA range lower band again. 

REMARK:- Long term trend is still up, and it seems that the last week’s correction may be over, so as of now it is buy on dip market but since last week’s up  move lacked volumes therefore one should be cautious in long trade and get alerted if it trades below 7760 and get out of the long trade if it closes below 7680.

Kindly note that make your cost your stop loss in favorable trade and then trail it as the price move up/down to gain maximum profit and avoid losses. Use support and resistance levels as entry, exit, target and trailing stop loss points. DO NOT TRADE WITHOUT STOP LOSS

Note: Price stated here is of spot market

Contact me for strategic guidance to enter and exit the trade