Update for 21st January 2011

  

Another Intra-day Bounce, But What Now ?

We used the title " A Tentative Close, But What Now " for the last post, because of the peculiar nature of market close seen on Wednesday. We said that, though the bearish engulfing candle may be indicating an immediate down move, the tentative close might be an indication for a move in either direction. Therefore, traders were advised to be extra careful and alert for fast movements in either direction on Thursday or the following day. Nifty futures opened below the previous day's trading range due to the negative international cues on Thursday. The futures contract tried to recover, but the move failed at around the 5680 mark. Another tentative down move saw the contract almost revisiting the recent swing lows. However, the tentative down move in the morning session also lacked volumes. Therefore, the ensuing recovery  actually  became a frantic short covering rally which traveled around 100 points in just one and a half hours. Nifty futures closed at 5722 after recording a high of 5744.

 Nifty Futures - Intra-day Chart

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