Update for 7th December 2010

   A Breakout, It's Failure and What Next ?

It's been proven again that support and resistances can be found out only by keen observation of the market action and not by applying any simple mathematical formulas as advised many others. It was being indicated on this site that Nifty future has resistances at 6030 and 6090 levels for the past three or four trading days. Now, please check out what happened in trading in the last three days. Nifty futures traded below the indicated resistance of 6030 for most of last Thursday and Friday and the daily highs were very near to 6030. And on Monday, Nifty futures broke out above the 6030 level and went straight to the next resistance of 6090 and recorded a high of 6094. The buy signal originated by the Momentum Signal trading system in the Nifty futures at the 5982 level as on 1st December 2010 achieved a maximum favorable excursion of 110 points. Or put in simple English, the long  position entered at 5982 could have been sold at the 5090 resistance level leading to clear profit of 100 Nifty points.  

Nifty Futures - Intra-day Chart        

Update for 6th December 2010

 

   Two Days of Indecisive Trading and What Now !  

As part of the scenario analysis given in the last Friday's post, it was stated that if the Nifty future was unable to cross the previous day's high, it may try to revisit the 5860 support or even lower levels. However, this scenario was expected only in the absence of positive international cues. In spite of the western markets continuing their uptrend, Nifty futures opened flat on last Friday and enacted a part of the scenario by trading below the previous day's low. However, the positive international cues prevented the Nifty future and the index heavy weights from  losing much on Friday.  The advance decline ratio showed a very negative picture on Friday because of wide spread losses in many stocks. The market also lacked volumes on Thursday and Friday, may be because of the lack of enthusiasm ( ? ) to trade at the present levels. 

 

Nifty Futures - Intra-day Chart        

The intra-day chart above shows the lackluster trading  seen on last Friday. The upper horizontal line show the 6030 resistance area and the lower, the low of last Thursday.