Nifty has been in the sideways mode for last 4 weeks. Lets check the bollinger bands. What are they telling us?
There are two main noteworthy points about the charts:
1. The first is that the Index has made the last bottom (on 25th Feb 2011 without breaching the lower band.) The low was 5230 on Nifty cash.
2. The second point is that the Index reverted back on touch of the upper band on 4th Mar 2011. The high was 5520 on cash Nifty index.
What this indicates is that we are in a perfect range trend as of now till the upper or lower bands at 5615 or 5295 is broken. This is very much consistent with earlier view of range trading.
Going further lets check the ADX.
It is at 13 levels with bearish DMI at 26 levels. The ADX below 20 levels is range indicator and that the setup as of now.
Looking at the timeframe we have 6 weeks of range trading already in place. Though there is no set rules for the timeframe in range but there is for sure a titbit that the longer the range trading the bigger the breakout from it will be. Example: the 3 month range trading of Jan - Mar 2009.
There are two main noteworthy points about the charts:
1. The first is that the Index has made the last bottom (on 25th Feb 2011 without breaching the lower band.) The low was 5230 on Nifty cash.
2. The second point is that the Index reverted back on touch of the upper band on 4th Mar 2011. The high was 5520 on cash Nifty index.
What this indicates is that we are in a perfect range trend as of now till the upper or lower bands at 5615 or 5295 is broken. This is very much consistent with earlier view of range trading.
Going further lets check the ADX.
It is at 13 levels with bearish DMI at 26 levels. The ADX below 20 levels is range indicator and that the setup as of now.
Looking at the timeframe we have 6 weeks of range trading already in place. Though there is no set rules for the timeframe in range but there is for sure a titbit that the longer the range trading the bigger the breakout from it will be. Example: the 3 month range trading of Jan - Mar 2009.
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