Nifty Weekly Technical Analysis for Week Begining 7 May

By | May 6, 2012

General Anti-Avoidance Rules (GAAR) is the buzzword for every trader in Indian Stocks, Indian Markets have lost almost 10Billon$ of funds because of lack of clarity on GAAR.It is feared that the new rules could lead to a significantly high tax liabilities for FIIs, even if they route their funds through tax-friendly jurisdictions. Besides, the FIIs could be forced to pass on their tax liabilities to their P-note clients, thus adversely impacting their overall returns on investment.

Nifty is trading at 3 months low and breached the psychological and sacrosanct level of 200 DMA on daily and weekly closing basis.Sell in may is showing its effect.

Thanks all for your good wishes for speedy recovery.

Next week Greece election results which decides whether it will stay in EURO,How the EU markets see the ouster of Sarkozy Clarity on GAAR will either pave road for recovery or further impetus to the fall.

Last Week Trend Deciding level from 5217  has give both short and long call and people who traded would have made at least 150 points.

Nifty Hourly Chart

Hourly charts for Nifty looks quiet oversold and relief rally bounce back can be expected, But always remember its the higher time frame which has to be given more importance. Nifty can show a relief rally of 30-50 points intraday and continue to its fall.As April was a month of consolidation and in my previous post i have expected May to be a trending month still early days to call out.

 

Nifty Daily

On daily chart nifty falling wedge formation is still valid as a Bull case and the falling trendline support comes at 5020. Holding the same can lead to a pullback on Nifty. Failing to hold the support of 5021 can lead to the gap filling of 4 gaps which were formed when Nifty rallied from 4531-5630. Nifty has technically turned bearish with a close below 200 DMA@5118. If by next week we are unable to move above 200 DMA Nifty will turn bearish from long term trend perceptive also.

Nifty Gaps

Nifty has the following gaps so any close below 5000 will lead to gap filling so keep a close eye on the gap levels mentioned below

1 Gap :4641-4676

2 Gap:4744-4772

3 Gap:4879-4905

4 Gap:4947-4991 

Nifty Fibonacci

 

Bulls markets 50% retracement is always bought into. We made a brief attempt to trade below 5081 making a low of 5070 but quickly recovered, Monday we will open gap down and if we are able to close above 5081 on Monday it will be bullish sign but any close below 5020 will be highly bearish for the Nifty and market as a whole.

Nifty Weekly

Nifty broke the 50 WSMA on closing basis on Friday which also brings the weekly trend into bearish zone. Close below 50 WSMA can turn market into trending phase as seen from above chart. Look closely at blue circle mentioned.

 

5070 is Weekly trendline support as seen from above chart and any close below it will open the gates till 4900 on Weekly charts

Nifty Monthly

Always give more preference to Higher time frame if you are a positional trader.Monthly Time frame will be down only below 5031.So if 5020-5031 range is not broken on closing basis for next 2 days expect Nifty Bulls has something to celebrate upon.

 

Nifty Trend Deciding Level:5070

Nifty Resistance:5112,5172,5217

Nifty Support:5020,4947 and 4905

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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