Friday, November 22, 2013

Applying Bollinger Bands® on Nifty for crucial levels!

The below article is picked up from the daily research report 'The Financial Waves short term update" by Waves Strategy Advisors. For more information visit
The strong 3 days of up move is almost retraced completely today. Such sharp reversals can result into sideways action and Bollinger Bands provide very important support and resistance levels during such period.
The below chart clearly shows how we have been applying Channels and Bollinger Bands together in addition to Elliott wave principle (shown in actual research report along with 60 minschart)
Nifty daily chart:
Wave Analysis:
The below was published today morning in “The Financial Waves short term update” a daily publication sent directly on your email before market opens.
In previous update we mentioned that, “In short, amidst the contrary signals and indications it is better to wait for either 6200 to break on upside or 6050 followed by 5970 to break on downside for clear trend to emerge.”
Nifty had another Gap down opening and prices quickly moved towards the first support level of 6050 – 6040. The selling accelerated once this support zone was broken and prices made a low of 5985 and closed near day’s low. The selling pressure was seen across the sectors and the overall breadth of the market deteriorated.
On short term charts, RSI indicator has now reached the oversold zone below 30. This can result into sideways action or minor bounce back. Also previous close observation of price movement shows that Nifty has a tendency to break the important lows but just to move down towards immediate minor support and bounce back from there. This formation we term as an “h” pattern.
Bollinger Bands: The lower end of the daily Bollinger Bands is also near 5910 levels. We are expecting sideways action and so applying Bollinger Bands to get the judgment of important support. If, however, the strong downtrend starts this technique will not work.
In short, given the oversold condition on indicators minor bounce cannot be ruled out from here but any break below 5970 will open up possibility for …….. On upside 6050 will act as an important resistance which was previously acting as good support (polarity reversal). These levels were mentioned in the morning before markets opened
Happened today: Today’s high on Nifty is 6049.60 and low of 5972.80. We cannot be more accurate than this!!!
To get such important levels on daily basis even for stocks along with Nifty subscribe to the “The Financial Waves short term update” research report. Simply visit the Pricing page and select this research report. We will start your subscription instantly. For any more information write to us at or call us at +91 22 28831358 / +91 9920422202. 

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