Nifty Update

Nifty 10 mins

Nifty 60 mins

Nifty Daily

Bulls thrashed.

The ongoing upside came to a halt, when Nifty first tested its resistance at 5774 as mentioned in the previous Nifty Update post and then a hint of pre-mature elections by BJP leader Mr. L.K. Advani. With the current political instability in the nation, Bulls were unable to carry on with the upward momentum and were thrashed.

But, did the charts gave hints of an upcoming crash even before it happened? The answer in bold letters is YES.

Look at the 10 and 60 mins chart. Both have two things in common:

1. The test of resistance level at 5774.
2. Two consecutive GAP DOWN openings.

This resistance level was clearly mentioned in our previous post on Nifty Update. This resistance level was highly respected. And if the on going upside had to continue, it had to break this resistance. Which it did not. Rather, we witnessed a Gap Down opening. A close view of the 10 mins charts clearly showed that the uptrend was broken along with the Gap Down opening and markets hovered around to test the trend line. Also, look at the negative divergence in RSI on the 10 mins chart.

Now observe the 60 mins chart. RSI came below it's smoothened average line and the Bollinger Bands expanded on the downside to confirm the beginning of a fall.

And all this happened even before BJP chairman Mr. L.K. Advani spoke about the possibility of early elections.

Currently, Nifty looks in a bearish mood, which we also mentioned about in our previous post that uptrend will continue till the prior Gap Up is not broken  and on the post dated 20/03/2013, that the long term bias is negative. But for the short term, the trend remains on the negative side till today's gap created due to Gap Down opening is not broken on the upside. The levels of Gap being 5688-5658.