Update for 5th August 2011

The Tsunami is Here !

Yesterday, it felt like the market is in the process of testing the resistances around candle of two days back. But the test failed at the first gate, ie. at the low of the reference candle. What happened afterwards was beyond anybody's guess. Now, at the time of writing this post, Nifty Future is hanging on to the last known support of 5175 - 5200 area. As the financial markets have entered an era of extreme volatility, technical predictions would be of not much help. Yet, it seems that a break of the support at 5175 - 5200 may lead to a swing even to a low of 4800 levels. However,  it remains to be reiterated that markets never travel in straight lines and even if it reaches the predicted levels, it might be after much back and forth movements.  It is also notable that sharp falls are associated with sharp recoveries, as the increased level of volatility acts both the ways.

Nifty Futures Daily Chart       

Update for 4th August 2011

A Test of Resistance is On ?

After the gap down open on yesterday, Nifty futures didn't suffer much damage.  Volumes at the lower end seemed to be low and it lead to a short term reversal. The market action also lead to the formation of an inverted hammer kind of candle in the daily charts. Though the technical position has not changed much, it seems that the market is in the process of testing the resistances above. The immediate outlook for the market depends on the outcome of this test. Day before yesterday's low, close, high etc can become the important reference points on this test. 

Nifty Futures Daily Chart