We finished a very dull week of trading, with sideways 15 point moves through most of the week, followed by a violent 20-30 points to finish the day.
Let’s look at what the charts are saying :
First the Bank Nifty.
This has been a chart as strong as any you could look at, repeatedly frustrating sellers during the week. I mentioned that on friday, value was being shifted lower in the daily. Have a look at what the weekly of the Bank Nifty Future is telling :
We are noticing signs of long liquidation at the top, evident in the P shaped profile. Whilst this does not necessarily mean that the index will drop like a rock, it certainly points to the buying momentum waning. Now it is upto the sellers to step in to move it lower. If that happens look for 10280 and 10150 to be targeted during the week.
We’ll watch for signs on Monday, whether that happens.The first tell will be an auction or a failure of an auction above Friday’s value high / value low.
Let’s look at the weekly chart of the Nifty Future.
This was a very dull week with sideways action as evident in the value which was within last weeks’.
The immediate supports are in the 5390-5405 region. Higher up a close above 5465 was not maintained for the daily momentum to go up. Besides 5465, the other reference level is 5485 in the hourly.
Hopefully, moving away from the value areas either side, should bring momentum to the index, something which has been missing all through the week.
Let’s also have a look at the weekly $spx spot prices.
In the future we had mentioned earlier how the 1096 level and the 1129 levels are important reference levels. Failure to auction above 1129 future unleashed some pent-up selling pressure on friday.
The chart still projects long liquidations near the top at 1129 odd levels.
It will be interesting to see if 1090-1100 on the spot can hold.