Technical observations – Bank Nifty.

Bank Nifty Spot as on 22 Feb’13 – 12068.95 and Futures – 12107

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Bank Nifty Spot As on 22 Feb’13

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Bank Nifty Futures Hourly Chart As on 22 Feb’13

As I have depicted in attached chart Bank Nifty is moving in a channel from last Nov’11 and all levels are respected well, barring one initial sharp rise, but then price reentered within a channel. In Sept’12 Bank Nifty witnessed minor whipsaw and to accommodate same I have drawn one another support trend line (marked with dotted line). Looking at current price action it seems that Bank Nifty will move to test Demand Support trendline, wherein it can find support, and we should say that as long as Bank Nifty stays within this channel, its long term trend remains Up. I hope nobody will deny this fact.

I have applied some Fibonacci Projections and Retracements; all are respected well by Bank Nifty.  Applying Fibonacci Retracement from low of 11125 to high of 12961, Golden Ratio of 61.8% comes near 11840 which can provide strong support to prices.

Combining above fact together, support from upward slopping channel line and Golden Ratio price level comes exactly at same place, 11840.  Now extending this fact, I will allow Bank Nifty to wiggle up to 11660. As long as prices are staying above these two levels, I will expect Bank Nifty to bounce from this level, as long term trend remains up, and medium to short term trend is correction.  But below this level, I see trend is changing the direction and initially prices will straight away go to 11000 levels and lower. Momentum is weakening, but still I will not conclude that game is in hands of bears.

Also, I have attached hourly futures chart of Bank Nifty, as you can see prices moved below major averages, and last Fridays action suggest that prices are just consolidating a bit after steep fall, and ready to move further lower.  But, now you all know where to keep an eye for, don’t get panicky and don’t get carried away by messages in you Inbox, if you are objective in trading than you very well know that where to stop and where to run.

I hope my analysis will help you to become an objective. I will appreciate your inputs & suggestions.



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