Markets for 03 aug 09

The new day, new week & the new month opens with the optimism in the minds of many traders that since sensex has crossed the june highs of 15600, nifty must cross june highs of 4693.but the whole thing will depend on the condition of asian markets as well as ever low volume sluggish trading in sgx nifty. In the daily eod chart, a doji star generates fear that perhaps the up move is nearing the end. However a decisive close on monday above the high of the doji at 4570 may dispel such fears. Only a fall and close below 4525 can confirm the evening star formation for further falls.

In the hourly char above, a bullish engulfing pattern can be clearly seen as the last candle of friday. So on monday, a further up move above the fridays highs of 4670 can generate a strong up move nullifying the chances of the evening star candle formation. Secondly a decisive cross over of fridays highs of 4668 can take nifty out of the rectangular channel for further up move towards "andrew pitchforks" upper resistance zone of 4700+ levels as indicated by blue lines in the chart above.

In case of a fall, nifty most likely will find support around or above 4600 levels as can be seen in the hourly chart above.13 hour ema around 4588 that saw nifty bounce back from it on last hour of friday may provide strong support to nifty in case of a fall below 4600 levels. Secondly in the hourly chart above, although slow stochastic has fallen below the higher 80% zone, yet there are strong possibilities of it turning up to re enter the upper zone to generate strong bullish signal.

Nifty most likely has entered the 5th up sub sub wave from the lows of 4422 that may move to much higher levels above 4700, but can only be confirmed on a decisive breach and sustaining above previous high of 4693.for intraday trading on monday, one must look for an intraday correction similar to friday (can only hope if one gets it on monday also) to enter long positions for good gains.
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