The Deadly Crossover

27th Oct 2009 was a day when the bears butchered everybody who came their way ....

Be it the bulls, hogs or sheep, none were spared by them. A negative crossover on the daily charts soon became a deadly one. Nifty Oct opened below yesterdays low of 4965, at 4960, which acted as a major resistance, and Nifty Oct was unable to surpass it. It tanked almost 125 pts from its high of 4964.

Every minor recovery on intraday charts was followed by an immense selling pressure, thus resulting into a newer low. It made day low of 4838 and closed just about 10 points above it.

Optimistically speaking, Nifty Oct closed near its 50 EMA on daily charts. Thus if it has to find support here, at 50 EMA, it has to trade convincingly above 4859. A close above 4859 tomorrow I believe, will be an indicator to short coverings and fresh longs.

However, on the downside, below 4838, Nifty Oct has support at 4780, which is a swing low on the daily charts, and also a double bottom. Below 4780, I could figure out no support till 4653, which is the 20 EMA on weekly charts.

As some one rightly said, no one can see the right side of the charts. So cant I...

Tomorrow will tell its own tale. Happy Trading !!






Disclaimer: The said technical analysis is a perception based on various charting methods. Trades on my opinion are to be done solely at your own discretion.