Update for 8th March 2011

  Nifty Future Gaps Down, May See Further Downside!

• We said in the last post that the increasing uncertainties on the on the political and crude oil fronts may force the market to trade lower or keep it in a wide sideways trading range in the immediate future.
• Nifty futures +opened with a gap at  5500 on Monday and the gap is still remaining open in spite of a late push by the contract to test the day's high in the afternoon.
• As the gap is formed just after the formation of the swing high candle, the existence of this gap may indicate further weakness in the market.
• It seems that the round figures of 5500, 5400, 5300 etc have also become somewhat important reference points for Nifty traders, in addition to the reference levels of  5550, 5450, 5350, 5225 etc., being quoted by this blog for such a long time.
• Any further rise in the crude oil prices may force the Nifty futures to test the lower support of the rising trend line in the immediate future. ( Please see the weekly chart of the Nifty index given in the previous post. ) 

    Nifty Futures - Intra-day Chart

Update for 7th March 2011

  The Expected Test of  200 DMA at 5660 Fails ?

• It was said in the last post that Nifty futures were seemingly poised for a test of the 200 DMA at 5660. Accordingly, Nifty Futures opened  higher and tried to breakout above the 5598 swing high on last Friday. However, it seemed that the breakout attempt was a bit premature and this might have lead to it's failure.
• The breakout failed almost immediately as indicated by the fall back of the futures below the breakout level of 5698 in the morning session itself. Another important change seen in the market on Friday was the loss of premium by the Nifty futures. This might be indicating a failed test for the time being, unless the contract gains again in the next two or three trading days and breaks out above the 5600 levels.
• Due to the increasing uncertainties on many fronts, ( politics, rising oil etc ) market may trade lower or in the best case scenario, remain trading sideways for some time before deciding the direction of the breakout. ( Also see the weekly chart below showing possibility of a sideways market ).

This update is also kept short, but with the usual data and charts, due to some exigencies and the regular readers are requested to kindly bear with the inconvenience.

    Nifty Futures - Intra-day Chart

  Nifty Futures  - Daily Chart