Markets for 24 aug 09

The expiry week opens with the back drop of bullish break out in the us markets on friday night and also a last hour bullish break out in the nifty above the resistance of 4495 to reach 4539.on the basis of pure technicals, the markets certainly look extremely bullish for monday & should at least take nifty towards 4595 to 4600 levels if there are no nasty surprises from asian markets. The reverse h&s formation as you see in the chart above can take nifty by at least 140 points from the break out point of 4495 towards the target of 4636 in next 1 or 2 days with the major resistance of 4619 posing a threat for some time.

For intraday trading on monday, with bullish asian opening, expect a gap up open around 4555 to 4568 levels followed by the as usual marking time in a flat range for 1 or 2 hours before deciding further course of action. In case of nasty surprise from asian markets, nifty finds strong support around 4509 followed by 4494 and finally 4469 that will bring in strong buying interest. On the higher side nifty faces initial resistance around 4555 followed by 4569. A decisive breach and sustaining over 4569 can take nifty towards 4595 or even 4619 which is quite possible if asian markets & sgx nifty do not play the spoil sports at the beginning. A decisive close above 20 dma around 4540 can add further strength to nifty for another big rise in coming days.

As per the chart above, andrew pitchfork median line (marked in blue) goes around 4640 to 4650. Nifty having successfully taken support at the lower fork around 4400+ levels should generally eye for testing the upwards moving median line around 4600 to 4650 levels shortly. Long term investors should keep on accumulating for good gains in the long term. Swing traders now may continue to hold their longs with a close below 4353 to 4333 as their quitting point.

Although us markets have had a consecutive 4th day of rise on friday and are ripe for a pause that may induce asian operators to take advance action on monday, yet the markets definitely are in for some more up move this week. With s&p500 having shown some sort of a break out momentum on friday, there is every possibility of some more up move in us markets in coming days after the expected pause that may induce a bullish momentum in other asian as well as indian markets in coming days.