Update for 20th January 2011

  A Tentative Close, But What Now ?

We had opined in the previous post that the present up move from just about the 200 DMA seemed to a tentative one and lacked enthusiasm.  Wednesday's down move has vindicated that opinion. On Wednesday, Nifty futures opened flat at 5740 and almost immediately went on to retrace the small up move it made in the last half an hour of the previous trading day. After recording a low around the upper range ( 5710 ) of the previous day's intra-day narrow trading range, the Nifty contracts tried to rally again tentatively. It recorded a high of 5754 in the middle of the day. However, a break of the rising trend line seen in the intra-day charts of the contract, saw another bout of sudden selling made apparently by the day traders. Nifty futures fell to 5661 in this bout of selling, but recovered to close at 5697 for the day.

Nifty Futures - Intra-day Chart

Update for 19th January 2011

    Will the Tentative Up Move Continue ?

Following the formation of a narrow range inverted hammer candle on Monday, Nifty futures opened higher on Tuesday as expected. We had indicated in the previous post that the inverted hammer candle may be indicating a minor or a major reversal from an area which is just above the 200 DMA. Nifty futures opened at 5678 and almost immediately went on to test the immediate higher minor resistance at 5725. The Nifty contracts corrected from there to record the day's low of 5772 in the morning session itself. Nifty futures spent most of the trading day between 5680 and 5710 before moving upwards in the last half an hour of trading. The up move seemed to be a tentative one and was lacking much enthusiasm. ( Well this is a personal opinion and such opinions can  be wrong also. )

 Nifty Futures - Intra-day Chart