Update for 2nd December 2010

  December too Starts with a Bang !  

We stated in the last post that a test of the 5940 area by the Nifty future was expected, since the market  is bouncing from the 100 DMA and it had already tested the breakout point of 5865. It was also stated that closes above the 5940 level will indicate trend reversal as it will lead to the Nifty futures going back to  the previous trading range. Now both these conditions have been met and it can be considered that the present downtrend has finished. Or put in other words, it has become a buy on decline market. 

Nifty Futures - Intra-day Chart   

    

Update for 1st December 2010

  Nifty Future Breaks the Resistance at 5865, But 5940 Stays ! 

The last post indicated that since the Nifty future was unable to surpass the two day high at  5865, the contract may  test of the lower end of the trading range before trying to break above this reference point. It was also indicated that Nifty future has support at the 5750 to 5775 area and the top end of this support also coincides with the 100 day moving average. Now, let's check what happened during  Tuesday's trading. Even though the contract recorded an open of 5850, the actual trades in the initial minutes were below the 5820 levels. It is normal for markets to trade in very flat ranges before the announcement of any major market moving economic data. As the second quarter GDP data was  due by 11.00 AM, Nifty futures traded sideways till that time but stayed inside the tight range between 5915 and the previous day's low of 5788.

Nifty Futures - Intra-day Chart