Nifty-Technical View For The Week Starting From-1-9-14

NIFTY CLOSED AT 7954.35 ON 28-8-14

Range for the week ended on 28-8-14:- 7968.25--- 7862.45

Range for the month of August-2014 ended on 28-8-14:--7968.25---7540.10.

SUPPORT: -7940 / 7931.75 / 7929.05 / 7913.20 / 7870 / 7855.95 / 7840.95 / 7808.85 / 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:- 7968.25 / 8027 / 8050 / 8130 / 8330.

  (Figures in bold are important)

Nifty opened firmly and moved in the range of 105.80 point during  the week under review and made a new all time high of 7968.25 and low of 7862.45 for the week before closing the week near the high at 7954.35.It is showing good strength therefore I  suggest buy on dip strategy but with  a caution and proper stop loss because some important averages are very near the closing price ,so if nifty does not move up fast from here and stagnate here for 4-5 days then it will break the averages and that may trigger down correction. I therefore feel that a make or break situation could emerge in the coming week starting from-1-9-14.

TECHNICAL VIEW

1.      ON DAILY CHART:-It looks good on the daily chart but it has made a double top at 7968.25 and a recent bottom at 7855.95 therefore avoid long call below 7968.25 and below 7855.95 for sure, but if it move above 7968.25 and stays then it could move up to 7990 on 1-9-14 itself .The short term DMA are moving up and the range is  between 7910—7830 &7780 (it changes every day) for 1-9-14, therefore as of now it is buy on dip market.

But be alert in long trade  if it starts trading below 7910 and the exit points for the long trade is close below 7830& below 7780 for sure. Going up it will face tough resistance at 7968.25 / 8027 & 8050.

2.      ON WEEKLY CHART:-  It is ok on the chart . Furthermore it is way above  the upper band of the short term DMA range which is between 7758—7420(for the next week) starting from-1-9-14.If it moves above 7968.25 and stays then it could move up to 8022 & 8050 during the week.

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 at least on the daily chart again.

3. ON MONTHLY CHART:- It is ok on the chart and it ended the month near the high but it has been continuously moving up for the last four months and gave a stupendous rise of 1329.70 points. It rose from 6638.55 in May-14 to 7968.25 in August-14, therefore correction on the monthly basis looks imminent in the month of September-2014,therefore be cautious in long trade.

REMARK:- Long term trend is still up, therefore I would suggest  to adopt buy on dip strategy at appropriate level with proper stop loss. Avoid fresh long trade below 7830 and below 7780 for sure

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