Nifty - Analysis Feb 22nd to Jun 8th '12

Note : Incredible Charts used to derive analysis, visit www.incrediblecharts.com for free & premium usage

Nifty Notes : Nifty made found its bottom on Dec 19th '11 and after several weeks of rally found its top on Feb 22nd '11

Nifty bottom level rounded to 4531
Nifty top level rounded to - 5630

Fibonacci Retracement levels
Connecting  4531 & 5630 we get following fibonacci retracement levels

23.6%  - 5371
38.2% - 5210
50% - 5081
61.8% - 4951
78.6% - 4766

Using the above chart, we can see that Nifty made its recent bottom on Jun 4th '12 after completing almost 78.6% retracement and made a low very close to 4770 i.e. at 4766, just 4 points away

Trend Line

Interestingly if we connect all the tops made between Feb 22nd & Jun 8th i.e. starting from 5630, 5499, 5378, we get the last connecting line at 5010 and Nifty made touched this line on Jun 5th '12

Clearly a downtrend confirmed however reversal has just started 2 days back with Nifty closing above 5010  consecutively

Support & Resistance Levels

Last year around 5010 & 5015 levels Nifty found support i.e. between Oct & Aug timeframe, however after Nifty slipping from 5630 to 4766, it has made a tough fight to break 5010 levels and did try to break it 4 times between May 9th & Jun 6th

Finally it succeeded twice in breaking 5010 level on both Jun 7th & 8th

Candlestick Pattern

Important point to note, Nifty made a hammer pattern which signifies that some more intermediate rally is left out before seeing a next decline

As far as 4990 & 5010 levels are not broken we can continue to buy Nifty futures & be stock specific to see reasonable gains

Summary

Even though the current trend level seems to looking up we should remember that the long term trend is still showing a major downtrend, which I'll discuss in detail in my next post.