Chart 1 – So the market found very nice overhead resistance at the 200-day Moving Average and has pulled back nicely. Check out the very nice Slow Stochastic cross above overbought which coincided with the 200-day touch. Good signals for this latest pullback.
The MACD is nicely bearish still as is the Parabolic-SAR.
The MACD is nicely bearish still as is the Parabolic-SAR.
But the market is starting to look a little oversold, see the RSI and RMI signals.
I’ve refreshed the Fibonacci Retracement study on the latest price action and you can see how we have retraced 61.8 pct quite nicely with only a small overshoot to the 200-day MA before this latest correction.
We should now see some support at the June low as marked.
Chart 2 – Volume is still not that good overall and as with many world equity markets at the moment until volume improves and upside move will quickly run out of steam.
I’ve added a trendline to the second chart which goes back to 2009 and you can see we have now broken below the line but it was a shortlived dip below and, as I said, not hugely significant. We should however continue to watch this line.
Also see chart two for what is a very significant level for this market. On January 8, 2008 the Nifty touched a high of 6,357.10 while on November 5, 2010 it touched a high of 6,338.50 and you can see how significant that level is should we test the upside again.
Those looking to buy at cheaper levels on any future rally should keep this level in mind as a good jumping off point to take profits.
I’ve also put the Alexander Filter on this chart. It is basically a buy and sell indicator (see the glossary).
Chart 3 – The 30-day Correlation with the US market is all over the place and can be ignored for now. But keep an eye on it, particularly if it stays high.
DATAFROM:/www.reuterstechnicals.com
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