Nifty Analysis Ahead of Important RBI Policy Declaration on 19/03/2013

WEEKLY CHART:

Some of the observations based on weekly chart:

1. Upmove from 5548 to 6112 retraced upto 5663 which is 76.6 % retracement and channel breakout from there.
2. Positive crossover in Stochastic and CCI is clearly Visible.
3. RSI is moving up from oversold condition with positive divergence (shown in pink colour).

All the above mentioned observations indicate possibility of upmove in near term.

BUT

1. CCI is still in overbought zone and
2. Past two weeks volume are decreasing.

The above observations are pointing towards some negativity.

Conclusion:

Nifty took support at 34 WSMA and closed above 5 WSMA and 20 WSMA. A positive crossover can also be seen there between 5 & 20 WSMA. So we may buy the dips with proper SL but we need to be cautious at higher levels

DAILY CHART:

                                                                                                                                 

Some of the observations based on daily chart:

1. Recent price development shows inverse H&S pattern with neckline around 5970. So, above 5970, NIFTY may breakout.
2. Possible positive crossover in CCI
3. Upmove of stochastic is expected with RSI taking support around green line
4. Possible fast rise setup in moving averages.

All the above mentioned observations indicate possibility of upmove in near term.

BUT

1. Price is still below 5 SMA

Conclusion:

Nifty took support at 20 DSMA and if price closes above 5970 we may buy it safely with proper SL.