Monthly Charts
- There is a possible ascending triangle deveoping on the monthly chart. The volume as with every consolidation is falling. We are good as long as the expected breakout occurs with heavy volumes.
- The indicators show a possible advance breakout on both composite and the RSI indicator. The RSI advance BO is particularly more reliable.
- To existing traders there is no need to emphasize the possible price action that may follow given a good high volume BO from the top boundary of this ascending triangle, which lies in the 6330-6350 range.
Weekly Charts
- On the weekly chart we can see a smaller symmetrical triangle within the bigger ascending triangle. Here to the volume has been consistently dropping. But the only thing to worry about is the lack of surge in activity as the top boundary of the triangle was violated. The only reason I could think of is may be the bigger triangle need to be resolved to bring back the participants.
- The RSI indicator has broken out from the falling trend line of the triangle. Also it came back to take support on the trend line, that is typical development once a triangle BO occurs. Till RSI breaks down below the 45-40 range on RSI we can safely say, barring occasional pullbacks to alleviate the OB conditions on lower fractals, we are in an up trend.
Daily Charts
- On the daily chart we have broken out of a flag pattern, which is a continuation pattern, it signifies the trend is still in force. The volume also rose on last couple of trading sessions, which is a good sign.
- The RSI has reached above 70 levels, to many this is a sign of trend reaching maturity. But the first time it reaches such an extreme in a comparatively less time, it means the market is preparing for a new trend. Any pullbacks towards the 60-65 range, with continuation patterns on the price chart should be bought into.
The only cause of concern may be the lack of surge in volume, which may pick up as the trading progresses. A new high would certainly go a long way towards bringing in more participation.
More volumes are happening on Singapore Exchange for Nifty then on Indian Exchanges. This has to be factored in.
ReplyDeleteThanks for pointing out. Since the pattern is playing out well this additional info will add to its validity. Thanks for the comment.
DeleteRegards
Aniruddha
Recently I observe that ur analysis is based more on classical TA than EW. I hope there is no particular reason.
ReplyDeleteDear sir,
DeleteSome of the readers take the labeling too literally, my labels tend to change according to the Risk Reward ratio of the current technical position of the markets (as I interpret them).
So I have decided to share the EW counts when I feel they are compelling enough, lest they misguide anyone.
There is no other reason.
Thanks for showing your concern.
Regards
Aniruddha
Yes i do agree with Azad your analysis is based more on classical TA than EW. By the way i always like your annotation of graph and analysis. Thank you for sharing...
ReplyDelete