Thursday, August 20, 2009

Head & Shoulders Pattern

I forgot to add another reason why 4350 support was crucial. A close below and we will trigger a head & shoulders pattern on the hourly charts. Have a look below. The distance of the head from the neckline is around 350 points which would mean that the implied target would be somewhere around 3950 - just about around the place where nifty found very good support just a few days after the sharp fall on budget.

Infact today we bounced off exactly from the support line. My guess is on the next test - we will break through.

4350-4380 Good support zone

Seems like this whole zone has become a very good support area. After sharp price declines, buyers come in this zone to provide the requisite buying to propel the markets higher from here. Twice or thrice we've had very sharp bounces from this region.

Look at the intraday charts of Nifty below. I will watch for a break of this zone over the coming few days - infact might happen this week itself. This would mean we would then have open space to move down to 4100-4150 area which acted as support a couple of times during May-June.

Wednesday, August 19, 2009

Asian markets leading global equity markets

Have a look at this post from Dr Steenbarger's blog. His logic suggests and I agree with my observations over the past few months that asian markets are now no longer lagging behind US markets and following the overnight action in US. Rather, now the action, bull or bear starts early morning from asian markets - especially China. Europe follows up on the sentiment prevalent in asia during the morning.