Nifty Weekly Analysis for Week Beginning 05 Dec

By | December 4, 2011

Nifty was  up 7.3%  during the week after 4 weeks of consecutive loss taking cues from the global stock markets. Revival in foreign fund flows and bargain hunting at lower levels drove markets higher. It would be interesting to see how the next week pans out lets see how we are technically positioned for trade next week.

 Dec 8  ECB will meet is widely expected to cut Intrest rates by 25 bps

 Dec 9 outcome of European Summit will decide the further trend of Global Markets

We have trading Holiday on Tuesday so expect  Monday to be a highly volatile day as Traders will book profits on Longs and cover losses on shorts as overnight positions should not be carried in such highly volatile times we have seen 2 gap up of 100+ points in last months.

 

One Important observation i would like to discuss is Government/Central bank bailouts can never work on a longer term basis they can pop the markets for 1-2 weeks but after that once the enthusiasm settles into and market participants are aware of ground realities the demand and supply will take market near to its fair value.

 

Nifty Hourly

On Hourly charts we have a shown breakout on Friday above 5011 and moved towards the resistance zone of 5060-5110. Next week this range will be crucial to decide further trend of market.

We have a gap remaining at 4917-4861 which should be filled in due course of time. Looking at hourly charts in overbought conditions a consolidation correction can be expected towards 5011 and 4970.

 

Nifty Daily

 

Nifty rose 100 Points on friday but the volumes were below average which suggests rally was based mostly on short covering and buying is not happening.

One typical characteristics of Bear market rallies is they are always backed by lower volumes and falls by a larger volumes.

 

We are still trading in a parallel channel and close above 5062 will lead us to 5110 and close below 4917 will lead to gap filling till 4861.

 

5062 was the trendline resistance as per above chart and Nifty respected the trendline now move above 5062 will lead us to 5110 and 5169.

 

Nifty has finally closed above 50 DMA, To strengthen our view that move above 50 SMA was not a whipsaw market needs to close over it for coming week.

Ideal Scenario will be Nifty moving towards 5110 than consolidating giving a correction till 50 SMA and than finally starting its journey towards 5355 which is 200 SMA.

Inversely Nifty can move below 5022 and fall till 4861 to fill the gap so holding above 5022 will decide the further trend of next week and December expiry also.

 

Nifty Weekly

Nifty is up 7.2% WoW basis after 4 weeks of consecutive losses and one of the best weekly closing in past 2 years, Volumes were below average on the back of such massive rise indicating it was mostly on back of short covering we had such an humungous rally.

5110 and 5169 are next zone of support for Nifty on upside and 5022 and 4970 are weekly support levels.

 

 

5 Week high EMA is at 5109 which again adds to our view that 5110 should be the tough resistance for Nifty to break.

 

Nifty Fibonacci

We are approaching the Golden Ratio ie. 61.8% Retracement ratio from the low of 4640 and 5400 at 5110.

5110 would be resistance for next week and close above it on Weekly closing basis will lead us back to 200 SMA@5355.

 

Nifty Monthly

On Monthly charts Nifty was able to hold 4833 on Monthly closing basis which is one of the reason for the current rally on Nifty. For December Month Low is 4916, Above this level Bulls are safe and below it bear will come back with a bang.

 

Nifty Yearly

 

 

As per Yearly chart we are again seeing a formation of Double Bottom with 2011 Low 4640 and 2010 Low 4675. Will this level Hold for remaining next 19 trading sessions for the Year 2011 will be interesting to see looking at Euro Crisis and worsening shape of Indian Economy.

Tighten your seat belts for a Topsy Turvy ride of Indian Markets

 

Weekly Trend Deciding Level:5020

Weekly Resistance:5110,5169,5196,5229

Weekly Support:4978,4917,4861,4838

 

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5 thoughts on “Nifty Weekly Analysis for Week Beginning 05 Dec

  1. Bramesh Post author

    Thanks All!! Please let me know any Improvement required..

  2. Kavima

    Comprehensive and bird’s eye view analysis!thank u …

  3. Kirtan

    Hi Bramesh,

    Nicely done and clear picture again.All time frames considered which is not often by traders.Great work!

    Regards

    K B Raut

  4. lalit singh

    hi sir,your analysis is exceptionally well,it shows that how much efforts you put in.its quite natural that good people generally dont get expected response but excellent effort.keep it up.

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