Update for 22nd June 2011

 Nifty Futures in Sideways mode ?

As envisaged in the previous post, Nifty future seems to have gone in to a sideways trading mode in which it is in the process of testing the broken support of 5350. As usual, a broken support becomes a resistance and as such, the Nifty contract may find resistance at the 5350- 5400 range on any recovery efforts. Significant put writing was seen in yesterday's trading around the lower support at the 5200 strike. This might offer some support in the short term.  However, the fact of Nifty's break of  the old trading channel remains as a serious technical challenge for the market in the medium term.

  Nifty Futures - Intraday Chart  

   Nifty Futures - Daily Chart    

Note : The chart above shows the edited open and high price of current month Nifty futures contract as the reported open price was at  100 points higher than the realistic actual transactions seen at the open.

Update for 21st June 2011

     Nifty Future Hangs on the Precipice !

Nifty broke through the 5340 - 5350 support and fell vertically to the next minor support of 5175- 5225 levels yesterday. Nifty has effectively broken out of the one and half year old trading channel in yesterday's trading. ( Please see the weekly chart below. )  Now the question is whether the index is poised for a deep correction or not. Normally, whenever a support or resistance is broken, market has a tendency to retest the just broken support or resistance. Now, Nifty is in the process of testing the broken support at 5350. Therefore,  Nifty futures may spend some time between 5175 and 5350 before deciding the next directional movement.   

  Nifty Futures - Intraday Chart   

   Nifty Futures - Daily Chart    

S&P CNX Nifty Index - Weekly Chart