Nifty Point Figure update

Nifty is at crucial resistance of 5950 levels. The index though gave signs of breakout from Bullish flag formation with gap up and good volumes as posted y'day.

The index on Point and Figure charts is also an interesting study at this juncture. The index is showing bullishness with a failed bearish breakdown and is now at triple top resistance.

If it breaks out from this levels then the target comes at 6100 which is also the target of bullish flag breakout.
But the final call will be only on touch of 5950 for spot when the breakout gets confirmed. 

 

There are multiple lines of resistances between 5900 and 6000 levels so the move can be quite erratic and frustrating. The ideal case would be good volumes at these levels 

Nifty and SPX in X O view

The Emerging market ETF EEM has broken out of the consolidation. Read the post here.
The etf is relatively bullish than SPX which is a major turn in the assets allocation globally.

Lets see how Nifty is performing relatively.
First Nifty vs EEM in a relative chart:

The ratio has been in range for quite some time and has is at the resistance trendline.
The 50 SMA is getting flat which is a good sign.

This shows that India is still underperformer in emerging markets.

Now hows the Nifty vs SPX. Well that's showing bullishness.

There is first breakout from the double top of X's which is highlighted. Though it is still below the bearish trendline but the ratio has rising bottoms.

So overall Nifty is for sure signs of bullishness but the months of under performance still lingers and that itself can be good trigger for buying by funds.

India X & O relative chart

The relative chart of BSE 500 Index and Nifty was flagging warning signals from late 2010. Any bullish rally should be reflected in broader market for it to continue.

Here is the chart of BSE 500 Index relative to Nifty which has been making lower tops in late 2010 with early Jan 2011 bottom break a perfect warning signal. This combined with lower tops was a perfect sign.

The ratio is now at critical support levels.

Nifty X & O chart setting up for more downside

The Point and figure charts are getting more bearish for India. In my last update the index broke the triple bottom which is a bearish sign. Post here.

Now the index has given  a bearish catapult breakdown which is a high conviction sell signal. The target comes at 5250 levels.

Attached is the chart.

Nifty: The X & O graph

X& O the popular symbols of point & figure charts.

The point & figure may be an old technique to analsyse but they are the best of all.
It just shows what matters the most: Trend whenever the price change is meaningful. Rest is just noise.

I did not know if one has noticed or not but Nifty has now given a sell signal in P&F charts.
In the chart it has broken the triple bottom.
Though the long term trend line is intact the intermediate trend is bearish.

The chart.