Nifty in Current Scenario

As of today Nifty is still in a downtrend trend from November 2010.We are currently at the middle of the major channel 4500 to 5200 roughly.The 50% level of the same comes to 4850 that is the exact point where we close yesterday.Now a move above this 4850 is imperative for the nifty to show its strength.Current range of consolidation can be of 4750 to 4950 with 4850 as the centre point.Anything above 4950 will give strength to the rally ahead.Two channels are shown in chart show the trend is up now as the angle of the smaller channel is steep than the intermediate channel.Price Volume Trend indicator also shows the channel with a downward slope.Watch the two smaller channels marked in the main channel depicting the strength of earlier moves.For the momentum to continue nifty should move to the top of the main channel of the indicator which shows a price range upto 5150-5200 if it actually moves there.The ADX indicator is not showing any strength to support the move.The positive DI(blue) has just touched the negative DI(red).For any strength to develop on nifty it should cross above it and move further up to the level of 40.Again for this to happen the ADX(14 day) green line should turn up and also follow the positive DI line to gather strength for the up move.The internal channels on the price action can be used to calculate the supports and resistances of this move keeping watch on both the indicators to judge the move ahead.

Happy Trading!