NIFTY for the week of 14-Jan-2008

Resistance

6250, 6275

NIFTY crossed the 21-day EMA, which was acting as a support for past several days. The 21-day EMA now can act as a resistance. NIFTY closed just below the 21-day EMA on friday. It needs to be seen if NIFTY successfully closes about the 21-day EMA in the comming sessions. A Red monday signals the weakness of NIFTY to cross the 21-day EMA line and can result in bearish signal.

Support

6170, 6150, 6120

The gap in NIFTY on intraday chart strongly supports NIFTY at 6170, where as other two supports are not so strong and should be used with caution.

 

Other observations

In our last week's post, we had mentioned that, on weekly chart, NIFTY is forming a wedge pattern. NIFTY failed to break the wedge in the last week and the result is that this week NIFTY will need more strength to break the wedge. If NIFTY successfuly closes above 6400+ in the coming week then that can signal that NIFTY has gained enough power to break the wedge positively. Understand the importance of this wedge, if broken, it can take NIFTY to 7000+ levels.

NIFTY for the week of 7-Jan-2008

Support – NIFTY should find major supports at 6215, 6165, 6040 and 5907

Resistance – NIFTY is standing at a point of resistance now.

Overall sentiment – As written above NIFTY is standing at a strong resistance. A green Monday with close above 6280 may trigger a rally, so keep a watch.

A red Monday with any close should be traded very carefully.

Infosys - More bottoms to come !!!

Infosys would soon complete 10 months in bearish trend. In these 10 months infosys was well bounded by the 200 day EMA (the thing red line). I have circled in red four occasions when infosys formed tops with 200 day EMA as resistance. Recent of these was in the last week when infosys started falling from a high of around 1830.

In this new downtrend, the scrip may find support at 1750 (thick blue line) if there is a spurt in volume in the coming sessions. If infosys breaks below 1750, then we may see this scrip going down till 1600 again.