I guess Nifty is in a make or break zone as the higher timeframe range is getting tighter & tigher. The United States and China slapped tit-for-tat duties on $34 billion worth of each other’s imports on Friday, with Beijing accusing Washington of triggering the “largest-scale trade war”. Despite the negative news factor, Asian markets (China, Hang Seng) recovered the early losses and closed positive.
This time using the classical technical analysis tools to analyze the how to play the trend reversal in nifty. On the weekly charts as per 5EMA high-Low strategy nifty is in sell mode for the past 6 weeks. And the RSI(2) and CCI(4) indicates oversold levels in Nifty Spot Weekly charts. Currently 5800PE is the highest open interest builtup area among the other strike price.
The Nifty is presently in minor wave 5 of Intermediate wave (1) of Primary wave (I) of a new cycle which started in March 2009. It completed minor wave 1 at 4693 in June 2009, followed by the corrective minor wave 2 in July 2009.
One of our Favorite Strategy to predict long term bull market with minimal risk is 13-13 Wilders Moving Average Channel offset trading system is applied to Nifty weekly chart and interestingly nifty has turned to buy mode(Nifty is in sell mode since Jan 2011. i.e almost more than a year). Also i would like to bring more attention our ichimoku trading system on the weekly charts as nifty had turned to buy mode last week on the weekly ichimoku charts
Nifty Weekly charts with 5EMA High-Low indicator is shown. Nifty had crossed the 5EMA high(5085) on the weekly charts during mid of novemeber. Weekly Supports coming around 5072.6(i.e 5 EMA Low).