Sunday, May 6, 2012

CNX Nifty 50 - Triple Screen 'Technical Analysis' - Week: 30 April to 04 May, 2012 - Bears win this round..

Learnings from the Past Week:
As analyzed on Friday last (click),  we used technical analysis on Nifty and on Global screens to call the market's last move, in sync.
Also our Ichimoku Study (post below or click) shows us, that we discussed the EOW close of Nifty at the Kijun Sen, last week itself.
Is it a free fall from here, or are the Bulls just feinting before their big move?

Nifty 50: Long Term View (or) Month Chart, each candle is 1 month's price action (or) EOM Chart:  
CNX Nifty 50 - End of Month (EOM) Chart - 04 May, 2012. 
Our EOM update (click), said that 5199 is the level below which, the 5EMA / 13SMA Bullish cross disappears and we see a deflection - as one can see has happened above.
Nifty has closed the week below the 34 EMA.
The Bulls have lost advantage in this screen and need to move the index above the 34 EMA to regain same.
We take the section marked 'EOW' in the chart and zoom in with the chart below...

Nifty 50: Medium Term View (or) Week Chart, each candle is 1 week's price action (or) EOW Chart:  
CNX Nifty 50 - End of Week (EOW) Chart - 04 May, 2012.
Going into last week this screen had already gone Bear.
Price is approaching an old resistance line which is now a support line - see below last candle.
This screen currently, continues to remain with the Bears.
We zoom into the section of the chart marked 'EOD'.

Nifty 50: Short Term View (or) Day Chart with closing prices in a line graph (or) EOD Chart:   
CNX Nifty 50 - End of Day (EOD) Chart - 04 May, 2012.
New RBG channel in place, after last week's price action.
Below all MAs that we track, and the MACD histogram is well into minus zone.
Looks like a Descending Triangle is in action - if so, time for a pull back to base - which is where the Wall (5189) is located.
Bulls get back their momentum, above our new red channel line, as marked.

Some Reads on Descending Triangles for those who want a recap:

Looking Forward into the next week:
We had stated earlier that the Bulls could feint a down move - the longer term bullish 'golden cross' and '34 EMA above 200 DMA' - are still in place.
Bears however rule the screens right now.
While a pullback to the Wall (5189) is a good thing - breaking and sustaining above the wall, with the above Bullish Crosses intact, is the next big thing to watch out for.

The BSE 30 - Ichimoku Study - Week: 30 April to 04 May 2012 - Kijun Sen Holds..

.....Regulars can skip below and go straight to the chart......


We do a weekly Ichimoku study, to complement our 'Triple Screen Technical Analysis', of the markets that we track, in our quest to master Technical Analysis.

When taking the 'weekly' time frame, to use the Ichimoku Cloud, we need to consider the following..

The standard settings for an Ichimoku Kinko Hyo chart are 9, 26, 52 and are used on EOD charts.  
When Ichimoku was created back in the 1930s, a trading week was 6 days long.  So we have one and a half week(9), one month(26) and two months(52). 
Now that the trading week is 5 days, we should actually use 7,  22 and 44 instead. 
However, the majority of systems, worldwide, still use the old settings 9, 26, 52. 

We need to study markets, on a weekly basis on this Blog.  
How do we fit 52, 26 and 9 into that need?  With one candle being one week?
There are 52 weeks in a year, 26 weeks form two quarters (or a half year) and 9 weeks equal about 2 months.  Fits the old logic - albeit differently.
Presto, we have a longer term view with the same settings!

So, if you like to move off the beaten track, for a change... do read on...

Quick Reference : 
Chikou Span - purple line,
Kijun Sen - blue line, 
Senkou Span A - black line, 
Senkou Span B - grey line, 
Kumo - grey shaded area,
Tenkan Sen - red line.

Useful resources (free) from the Web:

BSE 30: Medium Term View (or) Week Chart (or) EOW with the Ichimoku Cloud:  
The BSE Sensex 30 - End of Week Chart - 04 May, 2012.  

Last 7 Signals seen on BSE 30 - Week Chart (EOW) marked on chart above:
1. Senkou Span Cross: Strong Bearish Signal (S)
2. Chikou Span Cross: Weak Bullish Signal (C)
3. The Kijun sen cross: Weak Bullish Signal (K)
4. The Flat Kumo: Bullish Signal (Ko)
5. The Tenkan Sen/Kijun Sen Cross: Weak Bullish Signal (T)
6. The Kumo Breakout: Bearish Signal (B)
7. Chikou Span Cross: Strong Bearish Signal (C)

Last week (click) we concluded that, price holding above the Kijun Sen and MVWAP 34, keeps the Bulls in the game.
'2' marked on the chart points to this week's candle closing below the MVWAP 34, but a whisker above the Kijun Sen. 

Conclusion: Bulls have lost a lot of ground again last week, however if Index stays above the Kijun Sen, its not yet  'Advantage Bears'.