Weekly technicals for week ending 21 august 09

Weekly technicals for week ending 21 august 09

the indicators in the monthly charts continue to generate bullish signals. Monthly rsi having moved up to 57 levels is signaling further up move. The strongest monthly signal being 8 month moving average coming from below 13 month moving average to cross it to move above it, is the strongest long term bullish signal which is occurring first time after sept 04.all in all markets are looking extremely bullish for the long term.
In the weekly charts, the weekly indicators are not giving decisive bullish signals. Weekly slow stochastic although in the upper 80% zone looks shaky. Weekly rsi at 64 has to move up again above 70 levels to signal mega bullish signal towards 4800 + levels. Weekly macd although in the bullish zone, does not look progressive. Weekly roc at 0 value has all the potential to shoot up if indices move up from here. However amidst these dull weekly signals from the weekly indicators, the weekly moving averages depict highly bullish signals.20 week moving average at 4090 having breached 34 wma at 3575, has breached 50 wma at 3478 & 200 wma at 3929. Further strength comes from the cross over of long term exponential moving averages where 50 week exponential average now at 3872 has decisively crossed 200 wema at 3681 & moving to breach 100 wema now at 3912. These cross overs are taking place for the first time after june 2003 around which time the previous bull market had started. So long term investors should boldly accumulate on every decline for excellent gains over the long term.
In the daily charts, the green hammer on wednesday, followed by the gap up on thursday forming a big green marubozu generally indicates a break away formation which can occur after the current flat that started on friday gets over around coming tuesday. Daily slow stochastic indicates further up move. Daily rsi at 56 & daily roc at -1 look deceptive. Daily macd also looks neutral. Confluence of 8,13 & 20 dma between 4540 to 4570 indicates that nifty has to decisively cross on a closing basis either 4575 to move up or 4540 to slip down. However 50 dma at 4410 far above 100 dma at 4040 & both of these above the 200 dma at 3434 makes medium term out look pretty bullish also & all these 3 moving averages turning upwards confirms the bullish outlook in the medium term. Short term andrews pitchfork indicates nifty to have strong support around the median line around 4540 to 4550 levels & only a decisive breach of this median line can bring nifty towards the lower fork around 4477 levels. A bounce back after retesting the median line around 4550 can again take nifty towards upper fork around 4600 levels to pierce it to move towards 4660 to 4700 levels.
So overall expect a flat to mildly weaker first half of the week to be followed by bullish days. Nifty needs to decisively cross 4620 to close above it to move towards new highs of 4731 levels and a decisive breach of 4540 can take it down towards 4477 support levels. World markets will play a major role in influencing the movements of indian markets during the week.