Equity markets are gearing up in anticipation of Euro summit on 9th Dec while some decent announcements are expected in this summit. However from technical point of view the options data is suggesting further up move with heavy put writing with unwinding in 5000 and 5100 calls and on Friday index has also closed above its 50 Dema with long bullish Marubozu candle.
Despite all this the Sensex and Nifty chart patterns are trading inside the downward sloping channels touching lower tops and lower bottoms. So unless and until we do not get a clear break out the trend is down and will remain so for a while.
The Sensex and Nifty has provided a good up move with a double bottom formation at 15475 levels and 4639 levels.
The Sensex technical indicators are giving mixed signals. The MACD signal line is entangled trying to move up but still remains in the negative territory. The ROC has crossed above into positive zone crossing its 10 week MA. The RSI is just below the 50% level at 47. The slow stochastic is also below the 50% level. All this seems to provide opportunities to bears on rallies.
The Nifty chart suggests a gap up with a close above its 50 DEMA has ended with a positive note by the end of the week. But the up move was with an absence in volume which indicates lack of confidence.
The technical indicators have come up from oversold conditions but still are not quite bullish. The MACD has crossed above its signal line but remains in negative territory. The ROC had turned up too quickly in the positive zone. The RSI is at 44 just near to the 50% level but have not crossed 50% yet. The slow stochastic has moved above 50% level.
Conclusion: The index chart patterns continue to trade within the downward sloping channel. At the moment the change in trend is not yet seen. So preserve cash and try to get out of bogus stocks during rallies.
No comments:
Post a Comment