NIFTY Futures Weekly Price Action & Technical Analysis as on 25-SEP-2016

A relatively small range and quite week has passed.

The NIFTY50 is still supported by the sloping Weekly 8 EMA – the short term sentiment line, meaning yet a clear strong uptrend. The Weekly bar was a HH HL bar, and the open gap above the prices, created at the previous week has been closed entirely throughout the passing week.

Despite the above, warning signs are emerging. The fact that the last Weekly bars are not touching the upper Bollinger band – while the price is very near to the level of all time High – is a warning sign. In addition, the Monthly bar has approached the Monthly upper Bollinger band (at 9100 ~) but still is far from touching it. In order to maintain the bullish momentum, the next Monthly bar shouldn’t take out the Monthly Low, currently at 8688.9. Another issue to have in mind is the fact that the Index didn’t have any major correction since taking out the 2 Month LHBL. All of these are good causes for bearish opportunities (currently nothing more bearish than a month or two months of correction), in case clear signs of weakness are shown and good bearish signals are given.

Currently we are in the middle of the range on the Daily timeframe, where the most randomness for this timeframe might appear. Bullish opportunity might rise from testing the open gap 8742.55-8750.5 from above, not entirely closing it ending as a bullish pinbar or other bullish formation, where a thrust up above it would be a clear bullish sign. For bearish signs on the Daily timeframe, the current price action is not mature yet, and probably in the coming week the price is going to stay in that range. For lower timeframes, in the Hourly/4H timeframes, bear in mind the open gap from above, 8936.8-8952.5. Any penetration that doesn’t close this gap entirely, ending with clear signs of weakness such as a bearish pinbar is a good bearish opportunity towards the current prices level (mid range).

 

Nifty Futures, 4H chart (at the courtesy of netdania.com)

Nifty Futures, 4H chart (at the courtesy of netdania.com)

 

Disclaimer: Anyone who takes action by this article does it at his own risk, and the writer won’t have any liability for any damages caused by this action.

Gil Ecker

getrade8@gmail.com

Market Analyst and trader

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