Markets for 30 july 09
So, every one had a feel of operators game plan. By the way it is not yet over & another bout of operators action is awaiting for expiry day when dow will be made to fall today with very low volumes that will spill over to asian markets tomorrow that will broadly influence the expiry day in indian markets. Although nifty finally closed only about 1% down, yet the the ferocious way by which the operators took it down for 30 minutes after liquidating entire july longs to enter august longs at lowest levels was quite remarkable. It is wiser for traders to avoid future trading for 1 more day and confine to option trading to protect oneself from bigger loss.
On wednesday, nifty failed to reach the highs of monday & tuesday but breached lows of last 4 days to close lower than the closings of last 4 days. Although technically this definitely is a bearish signal yet such indications are to be accepted with a pinch of salt during the days of expiry when no technical indication work rather these indicators work in a reverse pattern induced by operators to allure traders to trade to create artificial liquidity as per indications only to be trapped.
From tuesdays high of 4599.9,nifty on wednesday made a low of 4421 and bounced up almost 61.8% till 4527 and closed at 4514. Now on thursday in case nifty manages to decisively cross 4530 levels, then there is every possibility of a sharp up move towards 4575 levels above which 4600 will not be a barrier any more. If one has a look at the hourly chart above one will notice two things. Firstly, nifty is still within a perfect rectangular pattern with the base around 4433 levels which too also forms the neck line of the double h&s formation. If the neck line around 4433 is decisively breached another sharp fall much bigger than wednesdays fall towards 4250 can be expected.
Secondly, although technical analysis does not work on expiry day because the indicators after so many days of exposure during the month take a day or two of rest giving a free hand to the operators to do whatever they like for these 2 days, yet if one has a closer look at the important hourly indicator slow stochastic, one will observe a good +ve divergence when nifty made a new low but the indicator made the same low which nifty had made when it was at 4528 on monday. In addition to this, the indicator also has bounced up without entering the lower 20% zone as was the case on monday & tuesday. So barring operators action on expiry day, there is every possibility of nifty retesting 4600 levels and breaching it also. Interestingly the last end hour small candle in the hourly chart above is also entangled with the confluence of 8,13,21 & 34 emas. So a decisive breach on the down side of the candle at 4498 can see a sharp down move and a breach of up side at 4527 can see a sharp up move. Lets wait & see how operators behave on expiry day.
So, every one had a feel of operators game plan. By the way it is not yet over & another bout of operators action is awaiting for expiry day when dow will be made to fall today with very low volumes that will spill over to asian markets tomorrow that will broadly influence the expiry day in indian markets. Although nifty finally closed only about 1% down, yet the the ferocious way by which the operators took it down for 30 minutes after liquidating entire july longs to enter august longs at lowest levels was quite remarkable. It is wiser for traders to avoid future trading for 1 more day and confine to option trading to protect oneself from bigger loss.
On wednesday, nifty failed to reach the highs of monday & tuesday but breached lows of last 4 days to close lower than the closings of last 4 days. Although technically this definitely is a bearish signal yet such indications are to be accepted with a pinch of salt during the days of expiry when no technical indication work rather these indicators work in a reverse pattern induced by operators to allure traders to trade to create artificial liquidity as per indications only to be trapped.
From tuesdays high of 4599.9,nifty on wednesday made a low of 4421 and bounced up almost 61.8% till 4527 and closed at 4514. Now on thursday in case nifty manages to decisively cross 4530 levels, then there is every possibility of a sharp up move towards 4575 levels above which 4600 will not be a barrier any more. If one has a look at the hourly chart above one will notice two things. Firstly, nifty is still within a perfect rectangular pattern with the base around 4433 levels which too also forms the neck line of the double h&s formation. If the neck line around 4433 is decisively breached another sharp fall much bigger than wednesdays fall towards 4250 can be expected.
Secondly, although technical analysis does not work on expiry day because the indicators after so many days of exposure during the month take a day or two of rest giving a free hand to the operators to do whatever they like for these 2 days, yet if one has a closer look at the important hourly indicator slow stochastic, one will observe a good +ve divergence when nifty made a new low but the indicator made the same low which nifty had made when it was at 4528 on monday. In addition to this, the indicator also has bounced up without entering the lower 20% zone as was the case on monday & tuesday. So barring operators action on expiry day, there is every possibility of nifty retesting 4600 levels and breaching it also. Interestingly the last end hour small candle in the hourly chart above is also entangled with the confluence of 8,13,21 & 34 emas. So a decisive breach on the down side of the candle at 4498 can see a sharp down move and a breach of up side at 4527 can see a sharp up move. Lets wait & see how operators behave on expiry day.
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