NIFTY WEEKLY TECHNICAL CHART ANALYSIS:
This has been a good week for NIFTY, after it bounced back creating a hammer formation from the dreaded 5200 level in the last week. However, the next week can be difficult and the index could fall again.
You can see that there is a line of resistance which is applicable since Nov 2010, i.e. 7 months ago. This makes it a strong line of resistance to reckon with.
The index reached this line of resistance twice and then fell back again. Out of these previous two times, it tried to break above this line for an entire month in the Apr-May 2011 period but couldn't do so and fell back again. You can see that all the weekly highs during that period touched the line of resistance but failed to rise above it.
Now again for the 3rd time, the index is about to reach this line of resistance and will meet it around 5717. This is an important point to watch out for. If the index rises above this level then we can look at a positive movement in the coming weeks. However, if 5717 is not breached and the index falls below, then we would ideally expect it to head towards 5350 and then 5200 before making any further movements.
For now, wait and see what happens at 5717 before making any important trade decisions.
NIFTY WEEKLY TECHNICAL CHART ANALYSIS
