Update for 9th March 2011

  Nifty Future Fills the Gap, Poised to Test Resistances ? 

• We had indicated in the last post that if the gap between the candles of last Friday and Monday is not filled in the subsequent few days, Nifty futures may be forced to test the lower supports.
• However, some easing of the political situation and the crude oil prices has helped the Nifty contracts to nicely fill the said gap on Tuesday.
• Therefore, it seems that, barring any unforeseen developments, Nifty future may test the higher resistances at the swing high of 5600 - 5610. Beyond the swing high, the 200 DMA at 5670 may act as the next resistance.
• Even if the contract surpasses this resistance, the 5800 level may act as a strong resistance being the upper boundary of the trading band.
• Readers are once again requested to take note that even the best analysis and the trading system outputs are susceptible to become wrong, whenever the market goes in to a trading range. This is because of the fact that trading ranges are formed as a result of haphazard trading with sudden reversals, but mainly confined to a broad range. 

    Nifty Futures - Intra-day Chart

  Nifty Futures  - Daily Chart 

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