Nifty Weekly Technical Analysis for Week Starting 20 April

By | April 15, 2012

Next  week is an crucial week as , the Reserve Bank Of India (RBI) will announce its annual monetary policy for the year 2012-2013. Looking at slowing economic growth and lack of capital investment general consensus is for a Rate Cut  after a straight 13 times rise between March 2010 and October 2011.

Current benchmark interest rates in the country stand at 8.5% currently.

We have Monthly Inflation data coming out on Monday which will be keenly watched by RBI. February Inflation was at 6.95% ,Anything lower than Jan inflation number of 6.54% will be welcomed by market as it increases the probability of rate cut on Tuesday.

So next market trigger will come from RBI, Will Nifty will be able to break its trading range from 5178-5320 Lets jump into the technical to find the answer

 

Nifty Hourly Chart

 

Nifty Hourly chart showed a breakdown on last 2 hours of trading on Friday,13(Ominous day). Nifty has broken below both 50HSMA@5265 and 200H SMA@5292 which shows the Price is rejected on higher levels. We will see on Monday how price behaves on lower levels near 5178-5150 levels.

Note:HSMA means Hourly Simple Moving Average.

Nifty Daily Chart

 

On Daily Chart Nifty respected its downward trendline as shown in above chart.Lower level support at 5178,Break of same will make nifty fall swiftly towards its 200 DMA@5145.

 

On a net to net basis Nifty has done nothing for April Expiry. After the fast rise in Jan and Feb, we had a volatile March and now April can be considered as a Month of consolidation.The above chart says so the Story of trading in April Nifty is stuck in trading range with formation of lower lows 5378 and 5306. 

MACD, RSI and Stochastic are stuck in a range and flattening out which show consolidation is going on.

We will go by Adage Sell in May and Go away as May have been quiet volatile and major correction has happened in May month.(Its just an observation Trades should be taken on Trading Levels and technical at that point of time.)

 

Keep a close eye on this long term trending channel with support coming down after each trading session,Current trendline support comes at 5110. This trendline is formed after 14 months of breakout on upside as shown in above chart.

Nifty Fibonacci Chart

Why Nifty sold of from 5306 with a fast and swift down move.  Reason was Fibo Traders selling at Golden Ratio 61.8%@ 5306 of trading range from  5190-5378.

50% retracement in upmove and Down move plays a crucial role as technically Buyers and Sellers nullify at 50% retracement and further course of action around 50% retracement will decide the further trend of market.

50% Retracement from 4531-5630 comes at 5081 so this level if it comes next week , Price action needs to be watched closely. Bounce back should be accepted from this level as such strong level never gets broken at first instance.

 

Nifty Weekly Chart

As per Weekly Nifty after a long time showed a correction of 2.2% WoW basis,Support at lower level exists at 5110 level where the down trending trendline exists. 26 WSMA stands at 5118 which should not be broken on Week closing basis, Breaking below 5118  on weekly closing basis will spell trouble for bulls.

 

Flag and Pole pattern still in play with Nifty consolidation above the upper of flag. Breakout will come on a close above 5445.

 

Nifty Monthly Chart

Monthly chart till now has formed an inside day candle which go by our view of consolidation month as April,Low of 5135 should be protected for this view.

 

Nifty Trend Deciding Level:5178

Nifty Resistance:5233,5270,5306, 5339 and 5385

Nifty Support :5135,5077 and 5012

 

Let me go by Disclaimer these are my personal views and trade taken on these observation should be traded with strict Sl

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