WEEKLY ANALYSIS FOR WEEK ENDING 10TH JAN 2014

THE NEW SERIES AFTER THE EXPIRY OF DECEMBER SERIES HAS NOT AT ALL GONE WELL  FOR THE INDIAN MARKETS. OTHER THAN A MINOR BLIP TO TEST THE 8TH JANUARY 2008 HIGH & THE PREVIOUS BULL MARKET HIGH OF 6357 ON 2ND JANUARY 2014 BY REACHING AN INTRADAY HIGH OF 6358, NIFTY IS FALLING CONTINUOUSLY AFTER MAKING A HIGH ON 3O DECEMBER AT 6344. A BIGGER FALL COULD HAVE BEEN EXPECTED DURING THE LAST WEEK IF IT WAS NOT THE SUPPORT FROM THE 50 DAY EMA AROUND 6171 THAT NIFTY TOOK ON FRIDAY AT THE DAY’S LOWS. THIS 50 DAY EMA SUPPORT MAY GIVE A LITTLE MORE OF  SPRING ACTION TO NIFTY SO THAT  IT CAN MOVE UP TO TEST THE 34 DAY EMA AROUND 6262 BEFORE FALLING AGAIN TO BREACH LAST WEEK’S LOWS OF 6171 TOWARDS  MUCH LOWER LEVELS AS INDICATED IN THE DAILY CHART ABOVE.

THE WEEKLY CHARTS LOOK DEVASTATING AFTER THE FORMATION OF A WEEKLY BEARISH ENGULFING CANDLE ON FRIDAY 3RD  JANUARY. THE WEEKLY HIGH FOR THE WEEKENDING 13TH DECEMBER 2013 WAS A NEW LIFE TIME HIGH AT 6415 MUCH ABOVE ITS EARLIER WEEKLY HIGH OF 6343 REACHED ON 8TH  NOVEMBER 2013. HOWEVER THE WEEKLY & THE NEW LIFE TIME HIGH AT 6415 HAS GENERATED MANY NEGATIVE DIVERGENCES IN THE WEEKLY INDICATORS LIKE WEEKLY STOCH, RSI, CCI & MACD HISTOGRAM. SO, THE BULLISH CASCADING EFFECT OF THE WEEKLY EMAs OF 5,8,13,21,34, 50, 89 & 200 STAYING ONE ABOVE THE OTHER TOGETHER WITH THE WEEKLY PRICE LEVELS ABOVE EACH OF THESE, MAY GRADUALLY LOSE THEIR BULLISH SIGNIFICANCE DUE TO THE NEGATIVE DIVERGENCE IN THE WEEKLY CHARTS.

THE BEARS HAVE FIRED THEIR FIRST SHOT BY PULLING NIFTY DOWN TO HAVE A WEEKLY CLOSE BELOW THE 5 WEEK EMA IN THE FORM OF A WEEKLY BEARISH ENGULFING CANDLE. AS OF FRIDAY’S WEEKLY CLOSING, THE  PRICE ACTION AND THE  NEGATIVE INDICATORS TURN THE BALANCE IN FAVOR OF THE BEARS & THE WEEKLY BEARISH ENGULFING CANDLE OF WEEKENDING 3RD JAN COUPLED WITH THE OVERBOUGHT CONDITION & THE  NEGATIVE  DIVERGENCES FROM THE IMPORTANT WEEKLY INDICATORS CAN GIVE SLEEPLESS NIGHTS TO THE BULLS FOR NEXT FEW WEEKS UNLESS BULLS UNITE TO TAKE SPOT NIFTY UPWARDS AGAINST ALL THE ODDS  TO HAVE A  WEEKLY OR EVEN A DAILY CLOSING ABOVE THE CRITICAL  6358 SPOT LEVELS WHICH THEN  WILL ENTIRELY TILT THE BALANCE IN FAVOR OF THE BULLS TO AIM FOR NEW LIFE TIME HIGHS ONE AFTER THE OTHER.

THE INDICATORS IN THE DAILY CHARTS DON’T LOOK ENCOURAGING FOR THE BULLS EITHER. OTHER THAN THE PIDDLY GREEN CANDLE OF FRIDAY THAT FOUND THE DYING SUPPORT ON THE 50 DAY EMA, THERE IS NOTHING THAT INDICATES BULLISHNESS FOR NIFTY WHICH MAY ENCOURAGE TRADERS TO INDULGE IN MERCILESS SHORTING ACTION ON EVERY RISE OF NIFTY  AS LONG AS SPOT NIFTY CONTINUES TO DANCE UNDER  THE PERFORATED ROOF OF THE  CRITICAL 6358 LEVELS. OTHER THAN THE
VISIBLE STOCHASTIC INDICATOR IN THE DAILY CHART ABOVE, OTHER INVISIBLE CRITICAL DAILY INDICATORS LIKE CCI, RSI LOOK MORE DEVASTATING IN THE DAILY CHARTS THAT SUGGEST BIGGER FALLS DURING THE COMING DAYS. A FRIDAY TYPE OR A DAY OR TWO MORE OF PAUSE OR MILD RISE ARE IDEAL INDICATIONS TO  TRADE SHORT & HOLD THE SHORT POSITIONS TILL SUCH TIME SPOT NIFTY DOES NOT CLOSE ABOVE 6358.

IN  ADDITION TO THE INDICATORS, THE DAILY PRICE ACTION AS CAN BE SEEN IN THE DAILY CHART ABOVE HAVE VERY LESS TO OFFER TO THE BULLS. AFTER THREE WIDE RANGING CANDLE OF 18TH, 19TH & 20TH DECEMBER, THE FOLLOWING 7 DAILY CANDLES WERE  NR CANDLES TILL 1ST JANUARY WITH THE CANDLE OF 30 DECEMBER MAKING AN OUTSIDE AND INSIDE CANDLE SETUPS. THE WR CANDLE OF 2ND JANUARY FORMED OUT SIDE CANDLE SETUP TO ALL THESE 7 NR CANDLES ONE OF WHICH HAD A PERFECT NR DOJI ON 31ST DECEMBER. THE CLOSURE OF THE WR  RED CANDLE OF 2ND JAN MUCH BELOW LOWS OF ALL THE 7 CONTINUOUS NR CANDLES IS A MEGA BEARISH SIGNAL AT LEAST FOR THE SHORT TERM TILL THE HIGH OF THE WR CANDLE OF 2ND JANUARY AT 6358 IS BREACHED ON A CLOSING BASIS WHICH THEN CAN ONLY SEE THE MARKETS MEGA BULLISH AGAIN FOR ANOTHER NEW LIFE TIME HIGH MUCH ABOVE 6415. THE ALTERNATIVES LEFT WITH THE BULLS FOR SURVIVAL MAY BE CONFINED ONLY TO THE ACTIONS OF FIRSTLY NOT TO ALLOW THE BEARS TO PULL NIFTY FURTHER DOWN TO CLOSE BELOW 6171 SPOT OR MORE IMPORTANTLY BELOW THE 18TH DECEMBER BULLISH ENGULFING LOWS OF 6130 & SECONDLY  CARRYOUT THE HERCULEAN TASK OF TAKING NIFTY UP TO CLOSE ABOVE 2ND JAN HIGH OF 6358. FAILURE TO ACHIEVE ANY OF THESE MAY SEND THE BULLS PACKING  FOR A WELL DESERVED PILGRIMAGE TO RAMESWARAM OR KANYAKUMARI  DURING THE REMAINING DAYS IN THE  WINTRY MONTH OF JANUARY 2014.

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