Rounding Bottom in Nifty - 24th Sep 09

Update at 3:18 PM:

Exited at 4983

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Update at 3:02 PM:

Target reached booked 75% at 4991. Still trailing with 25% but 5000 level is good resistance watch out.

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Nifty Intraday Chart - 5 mins:

Nifty formed a rounding bottom/cup and handle in intraday, also it took support from 50% retracement of the up move from 4908 to 4957 level. Break out with confirming volumes may led Nifty to 4983 level.

Update: Inverted Cup and Handle in Nifty Futures

Update on Inverted Cup and Handle in Nifty Futures. Target for Inverted Cup and Handle is reached today below is the 15 min chart of Nifty Futures:

Nifty (Futures) Technical Analysis For June 19th

Yesterday’s Recap (June 18th):
Nifty broke down the support of the expanding triangle with volumes yesterday and closed below that. Now the target for this pattern is 3900 levels. While coming down it also made inverted Cup and Handle, price almost reached the target (4200). But it took support from 4230 levels twice yesterday. Below is the Inverted cup and handle target shown in the 15 min charts:

Cues For Today (June 19th):
Though yesterday Nifty broke the support of the expanding triangle convincingly with good volumes, A point to note is that the market is in oversold zone, so a partial pullback may be expected, which may give an opportunity to exit any longs or take fresh shorts.

On the higher side 4390/4400 range will act as a resistance. Above that market may get some bullish strength. On the lower side there is a gap at 4185 level which may give support, as market is in oversold zone price may not break the gap support today. If the 4185 levels are broken then Nifty may go down to 4100 levels. Below is the 15 min chart of Nifty Futures.

Nifty (Futures) Technical Analysis For June 18th

Yesterday's Recap (June 17th):
In the morning hrs Nifty was moving in sideways direction while it closed the opening gap with low volumes. Formed a good symmetric triangle giving an opportunity for entering trade. Short entry at the symmetric triangle breakdown was the best in today’s trading. Later Nifty broke the Support trend Line of Inverted Cup and Handle with big volumes, confirming the further down move. Also there was a head and shoulders pattern formed in the handle part and the neckline of that pattern is exactly at the same point of the Inverted Cup and handle support line.

Nifty reached the target of the head and shoulders pattern and symmetric triangle pattern in intraday. While reaching the target of the head and shoulders it made a flag pattern and reached the target for that in intraday itself. Below is the intraday 5 min chart of Nifty Futures:

Cues For Today (June 18th):

At the end of the day volumes increased drastically forming a parabolic shape, which is indicating some up move could be possible. And also now price came near to the support of the expanding triangle. Partial pull back is very much possible but NIfty may come back to the lower levels as bearishness is clearly visible. If price breaks the support of the Expanding Triangle with volumes convincingly then the next target will be height of the expanding triangle.

On the higher side 4390/4400 may act as resistance. Above that, Nifty may go and retest the cup and handle resistance line.

Below is the 15 min chart of Nifty Futures:

Nifty (Futures) Technical Analysis For June 17th

Yesterday's Recap (June 16th):
Nifty opened with 60 points gap down and started moving up with draining volumes. It moved in only one direction with small retracement.

Cues For Today (June 17th):
On the higher side Nifty has resistance at 4590/4610 levels. As these are the distribution support levels, prices need more effort to break the range.

On the lower side, Nifty may take support at June 16th opening levels. Below it may go to 4390 levels if price slips from there then it may go and touch the support of the expanding triangle.

In price Nifty formed another distribution pattern (Inverted Cup and handle), though volumes are not supporting. If nifty breaks the lows of June 16th then price may see much lower levels. Below is the 15 min chart of nifty futures:

L&T - Longer Term Analysis

Longer Term Analysis on L&T, also, discussing about the Cup & Handle pattern posted earlier. Here is the daily chart:

Right-angled Broadning Triangle formation is clearely visible in the daily charts, marked with yellow dotted lines. Volumes are also expanding along the way, supporting the pattern. But past one month volumes are declining, which indicates some weakness in the up move.

Now, Cup and Handle Pattern has formed exactly below the resistance line of the Righ-angled Broadning Triangle, marked as thick Red line. It is wise to wait until this resistance line is broken convincingly to take up the long trades even for Cup and Handle. Once the resistance line is broken convincingly, the stock could be bought and held for longer term as it has the potential to reach upto Rs.2200.

Update on 8th June: Long Not triggered, as break out didn't happend with volumes.

DLF - Longer Term Analysis

DLF - Below is the Daily chart:

DLF has seen an exceptionally high volumes at the bottom and also while moving up. This indicates a strong accumulation. The two support lines drawn horizontally from previous peaks and the gap created on 18th May's historical up move created a strong base for support. Now, it formed a Cup and Handle pattern, posted earlier, showing good consolidation. DLF could be bought at the breaking out of this Cup and Handle Pattern and could be held for a longer term.

Update: Did not give a break out.

Cup and Handle in DLF,L&T and Nifty Futures

After the dramatic move of 18th May, some of the scrips slided down & consolidated with low volumes and then slowly moved up forming the rounding pattern. From past 2 days, consolidation can be seen with low volumes, which is acting like handle to the rounding bottom (Cup). Break out from the handle resistance line with good volumes will give confirmation to the pattern. Stop loss should be at the handle low - filter.

About Cup and Handle Patterns: Cup and Handle or Rounding Bottom acts as a good accumulation pattern. The gradual down move of the price with decreasing volumes shows that the selling pressure is reducing. At the center, the price is lowest with low volumes as the supply and demand are balanced. As the demand increases price slowly moves up with the volumes expanding. At the peak again high volumes show the climatic demand. If the supply increases dramatically and the prices are coming down with high volumes then this may form as double top pattern. If the prices are moving down slowly or consolidating sideways with low volumes then it indicates that supply is diminishing.

When the fresh buying starts volumes increases significantly and the new highs are made, as the sellers at the previous top close there positions and new buyers coming in, causing the price to zoom up. This pattern works as a continuation as well as reversal (inverted cup and handle) and has a very good risk-reward ratio.

DLF: Price pattern is good with bowl shaped volumes support. Below is the DLF chart

L&T: Price pattern is good with bowl shaped volumes support. Below is the L&T chart

Nifty Futures: Price pattern is good, but the volumes are not increasing in the up move. Most of the times, Nifty up move is necessary for the success of the others scrips. Below is the Nifty futures 15 min chart.

There are some more scrips which formed Cup and Handle Pattern, please post if any one find them and like to discuss.