Markets for 27 aug 09

On wednesday, nse index in spite of all the push to reach 4700 levels, failed to touch it on 3 attempts and could just manage to reach till 4698. However both the august and the sept futures could manage to cross 4700 levels but closed below it. Now everyone is waiting for the expiry day to see whether nifty closes above the 4700 mark or surprises every one by operators action to pull down nifty out of the blue towards 4600 levels. Based on pure technicals, nifty is all set for a mega rise in coming days. Whether the sharp up move comes on expiry day which comes after 5 consecutive days of up days or may come after a pause or mild correction has to be seen. A cross over and sustaining above 4th aug highs of 16002 & 4731 can see a very sharp up move in indices which most likely may come around early september.

If one has a closer look at the hourly chart above , important indicator slow stochastic is giving negative divergence . Interestingly the same negative divergence by the same indicator was observed yesterday also where indices are moving higher but the indicator is failing to make new highs. But the days around expiry being fully under the control of operators, such deceptive indications are part & parcel of the operators game plan. As long as nifty does not fall to breach 4656 to 4636 zone, it will move up & up only. A decisive breach of 4636 with volume can only spell danger for bigger falls towards sub 4600 levels.

Andrews pitchforks median line in blue in the chart above now has gone above 4700 levels and will slowly & gradually pull nifty towards it. The lower fork now around 4600 levels will provide the required support for nifty in coming days. In the daily eod charts daily macd & cci are indicating sharp up moves that may perhaps come after the expiry