MARKETS FOR 27TH AUGUST

NIFTY ENDED THE WEEK ON A MILDLY BULLISH NOTE AT 5386 COMPARED TO PREVIOUS WEEK ENDING 17TH AUG AT 5366 SPOT, THUS  MAKING IT THE 4TH CONSECUTIVE WEEK OF BULLISH CLOSINGS. THE WEEK GONE BY ALSO MADE A HIGHER HIGH AT 5448 & A HIGHER LOW AT 5369 COMPARED TO WEEK ENDING 17TH AUG HIGH OF 5400 AND LOW OF 5341.  CANDLE LOVERS WILL NOTE THAT THIS WEEK
HAS MADE AN  INVERTED HAMMER THAT HAD THE PREVIOUS WEEKS DOJI BEFORE IT. TECHNICALLY THIS TYPE OF FORMATIONS ARE DOUBLE EDGED DAGGERS THAT COULD BAFFLE THE MARKETS PLAYERS EITHER BY RISING SHARPLY ON CLOSING ABOVE THE PREVIOUS WEEK’S DOJI HIGH OF 5400 SPOT OR FALL MISERABLY AFTER CLOSING BELOW THE SAME WEEKLY DOJI LOW OF 5341.

AS WAS MENTIONED EARLIER, LAST WEEK  ENDED WITH  3 FLAT TO MILD DAYS AFTER MAKING HIGHER HIGHS DAILY TILL THURSDAY, SUGGESTING THAT BOLD INTRADAY SHORTING AFTER BREACH OF PREVIOUS DAYS HIGHS IS HIGHLY FRUITFUL. ON FRIDAY 24TH AUG, NIFTY SPOT HAS MADE A 7TH NRB CANDLE WITH A HIGH AROUND 5399 & LOW AROUND 5371. INTERESTINGLY THE WEEKLY CANDLE OF WEEK ENDING 17TH AUG WAS ALSO A WEEKLY DOJI & A 7TH NRB WITH THE WEEKLY HIGH OF 5400 & WEEKLY LOW OF 5341. SO, FOR CANDLE LOVERS, A DAILY CLOSE ABOVE THIS FRIDAY’S 7TH NRB HIGH OF 5399 MAY ENCOURAGE THE BEARS TO GO ON THE  RAMPAGE OF SHORT COVERING  TO CATAPULT  NIFTY SPOT TOWARDS MUCH HIGHER LEVELS THAT ALSO WILL ENCOURAGE THE BULLS TO BASH ON REGARDLESS TO HAVE A WEEKLY CLOSE ABOVE THE MENTIONED WEEKLY 7TH NRB HIGH OF 5400 TO SET THE BASE FOR A MEGA BULLISH MONTH OF SEPTEMBER.

SIMILARLY ON THE LOWER SIDE A DAILY CLOSE BELOW THIS FRIDAYS 7TH NRB LOW OF 5371 OR A WEEKLY CLOSE BELOW THE WEEK ENDING 17TH AUG  WEEKLY DOJI & WEEKLY 7TH NRB  LOW OF 5341 WILL SEND THE BULLS PACKING FOR A SOLID TWO MONTHS OF LONG HOLIDAYS TO RETURN FROM TIMBUKTU ONLY AFTER THE DEVASTATING & MARKET UNFRIENDLY MONTH OF OCTOBER TO RESUME TO BULL RUN BY WHICH TIME NIFTY PERHAPS WOULD HAVE TASTED THE HOLY WATER OF GANGES FROM AROUND THE HORIZONTAL ROD LIKE 200 DAY SMA LEVEL OF 5215  SPOT. SEEING THAT NIFTY ALREADY HAS 4 CONSECUTIVE WEEKS OF BULLISH CLOSINGS & EXPIRY PHOBIA LOOMING LARGE IN THE MINDS OF MONSTER OPERATORS, CHANCES OF SLIDE DURING THE COMING WEEK ARE BRIGHTER THAN A TECHNICALLY INFLUENCED MEGA RISE.

ON ANY DAY DURING THE COMING EXPIRY WEEK, EVEN AN INTRADAY  SLIDE BELOW THE UPWARD LOOKING BASE OF THE HOURLY RECTANGLE AS CAN BE SEEN IN THE CHART ABOVE, SHOULD BE THE GO AHEAD SIGNAL FOR MONSTER CARGO  SHORTINGS  FOR GREAT GAINS TOWARDS THE LOWER SIDE AS PER THE LEVELS IN THE CHART ABOVE. HOWEVER IF BULLS CAN MANAGE TO HOLD THIS RISING HOURLY SUPPORT LINE NOW AROUND 5371, THEN THERE IS EVERY POSSIBILITY OF SPOT NIFTY  RISING TOWARDS THE UPPER CHANNEL OF THIS HOURLY RECTANGLE TO SURPRISE EVERYONE BY EVEN TESTING 5500 BY EXPIRY, THAT ALTHOUGH MAY BE FOLLOWED BY VOLLEY  OF SHORTS ON THE UNFORTUNATE FRIDAY 31ST  AUG TO COMPENSATE FOR THE ENTIRE BULLISH MONTH OF AUGUST.

SO, DURING THE COMING WEEK IN CASE ON ANY DAY SPOT NIFTY MANAGES TO BREACH & MORE IMPORTANTLY IF IT CAN SUSTAIN ABOVE 5422 SPOT, THEN THERE IS EVERY POSSIBILITY OF A MUCH HIGHER MOVE. A DAILY AND A WEEKLY CLOSE ABOVE 5400 SPOT WILL THREATEN THE BEARS TO INDULGE IN EARLY SHORT COVERING AND A WEEKLY CLOSE ABOVE 5400  WILL SEE THE MONTH OF SEPTEMBER STARTING WITH A BANG TOWARDS THE NEXT SWING HIGHS OF 5499 FOLLOWED BY 5630 BY DEWALI OF 2012. A FAILURE ON THE PART OF THE BULLS TO ACHIEVE THIS SIMPLE TASK CAN SEE BEARS DOMINATING THE  MARKET FRIENDLY MONTH OF  SEPTEMBER.

FOR INTRADAY TRADING ON MONDAY 27TH AUGUST, THERE IS EVERY POSSIBILITY OF A RETRACEMENT RISE ON MONDAY. BUT HOW FAR THE RISE CAN TAKE NIFTY AND ABILITY TO SUSTAIN THE INITIAL DOW INDUCED RISE IS THE QUESTION. FOR SPOT NIFTY WHICH HAD CLOSED AROUND THE LEVEL OF 5386 ON FRIDAY, NEEDS TO INITIALLY GO UP TO BREACH THE CRITICAL LEVEL OF 5422 AND MORE IMPORTANTLY SUSTAIN ABOVE IT. FAILURE ON THE PART OF THE BULLS TO TAKE SPOT NIFTY ABOVE 5422 CAN SEE THE BULLS GETTING WHIPPED LEFT, RIGHT & CENTER BY THE BEARS WHO WILL CHASE THE BULLS ALL THE WAY TOWARDS 5370 SPOT TO BREACH THE BASE OF THE HOURLY RECTANGLE TO GENERATE PANIC.

HOWEVER SUSTAINING ABOVE THE HIGH OF THE MOTHER CANDLE OF THE HOURLY INSIDE BAR SETUP HIGH OF 5422 ON ANY DAY CAN TRIGGER MASSIVE SHORT COVERING TO PROPEL SPOT NIFTY TOWARDS MUCH HIGHER LEVELS. EVEN A BREACH AND SUSTAINING ABOVE 5400 SPOT  OR ABOVE THE INITIAL RESISTANCE ZONE OF 5410 TO 5415 SPOT CAN TRIGGER SHORT COVERING BY THE WEAKER BEARS TO PROPEL SPOT NIFTY TOWARDS THE CRITICAL LEVEL OF 5422 SUSTAINING ABOVE WHICH NIFTY MAY SHOOT UP LIKE A ROCKET. A FALL BELOW THE BASE OF THE HOURLY RECTANGLE AROUND 5370 SPOT OR MORE IMPORTANTLY BELOW THE CRITICAL 5365 TO 5360 SPOT ZONE MAY SPELL THE END GAME FOR THE BULLS FOR NEXT FEW DAYS.

FOR TRADERS OF NIFTY FUTURES ON MONDAY, NIFTY FUTURES WHICH HAD CLOSED AROUND 5407 ON FRIDAY, NEED TO DECISIVELY BREACH AND SUSTAIN ABOVE THE HOURLY PIVOT AROUND 5418 TO THREATEN THE BEARS FOR INITIAL BOUT OF SHORT COVERING. HOWEVER WITH ANY AMOUNT OF SHORT COVERING, IN CASE THE BULLS FALTER IN LIFTING NIFTY FUTURES ABOVE THE 5432 TO 5438 OR 5440 FUTURE ZONE, THEN BEARS WILL COME BACK WITH FULL FORCE TO SEE THAT NIFTY FUTURES ARE TAKEN DOWN TOWARDS SUB 5400 AGAIN. SO INTRADAY TRADERS MAY TRADE SHORT IN CASE NIFTY FUTURES FAILS TO BREACH AND SUSTAIN ABOVE THE 5432 TO 5440 ZONE TO REVERSE FOR LONGS ABOVE THIS ZONE. SIMILARLY NIFTY FUTURE TURNS WEAK BELOW 5385 TO 5380 ZONE TO SLIP TOWARDS 5464 OR LOWER LEVELS IN PANIC.

Source:QueensTrade