Market update for 13/08/2012

Nifty Hourly Chart 

Nifty has formed a channel formation in hourly chart Nifty has formed a ascending channel. 5350 is the level which is restricting the upward trend in Nifty. On Friday Nifty tested the bottom of the channel which is around 5300 and bounced back. Nifty is trading in a narrow range of 50 points that is between 5300-5350 and unless this range is broken we cannot take position in Nifty. If Nifty sustains below 5300 expected target is 5280-5250. On the other other hand if sustains above 5350 then target is 5380-5400.

Nifty Daily Chart 

Nifty is unable to breach 5350 level.  RSI has entered overbought region and 5350 may become the peak of this rally which started at 5100. 5300 was acting as resistance and now it is acting as support. To enter into a high probability trade wait for close below 5280 or above 5400.

Nifty weekly chart

Nifty has managed to close above 5300 on weekly basis. This indicates that the medium term trend is up. If Nifty closes below 5300 on weekly basis  then expected targets are 5150-5050.

Traders should note that there is no clear cut trend in the market.Whenever it enters a narrow range bound phase it will be difficult to understand whether this is a continuation of the prevailing trend  or reversal. The best approach is to trade the breakouts.

Chart of the day

 

SBI Weekly chart

SBI was one of the major loser in this week. In weekly chart of SBI you can observe that it has breached trend line support on closing basis.Unless SBI closes above 1950 can cannot take long position. Since it has breached the trend line support at 1930 there is a possibility of SBI reaching Rs.1800 in coming days.

Open Positions

Scrip	Type	Price	CMP	P/L
Rel Infra	Long	522	504	-18
Bank Nifty 10300 PE	Long	150	115	-35

Today's Trade

Scrip	Buy Price	Sell Price	P/L
Havells	542	534	-8
Nifty 5300 PE	57	55	-2

 

Nifty Medium Term Trend

Trend	UP
Initiation Date	07/08/20122
Initiated at	5336
High since change	5336
Reversal if closes below	5080

Thought for the day

An ounce of practice is worth more than tons of preaching - Mahatma Gandhi.