Intraday Analysis of Nifty (Futures) on 21st May 09

Nifty opened gap down today and price started moving sideways. A channel is formed, with draining volumes and gave a break out with good volumes and reached the target. After retracing to some point price started moving up again, but with low volumes compared to previous up move. And the shooting star is indicating some bearish signals, so this is surely a double top hence we go short below the support trend line. Below is the chart showing Channel and Double Top in Nifty futures on 5 min time frame:



In an Ideal head and shoulders, while price is moving upwards in head volumes should not be very high as this indicates bullishness. Here we got good volumes while moving up, but later we saw a double top which is bearish sign and while moving down from the second top volumes increased nicely as compared to the up move. In the right shoulder volumes declined while moving up and increased while moving down, which is good. Though we got higher volumes in while moving up in formation of head, double top is negating the bullishness and nice volumes in right shoulder is telling us this is a good head and shoulder pattern. And the big volumes and wide spread at the break down confirm the head and shoulders pattern. Below is the chart showing Head and shoulders in Nifty futures on 5 min time frame: