Candle formation for Nifty on 12-07-2012 – Medium hollow
candle with very small lower & medium large upper shadow. This indicates that
the trend is up. But the size of the real body has come down and lower shadow
appeared. This may indicate forthcoming weakness but requires conformation.
Hence up trend continuous and let us ride the profit.
Heikin Ashi candles on hourly chart – for the entire day all
the 7 candles where red in color. The final candle has a large real body
without any upper shadow. As per Heikin Ashi this indicates that the down ward
trend is strong. But observe in yesterday’s chart it shows how beautifully the
candles provided support & resistance. I have marked them in the hourly
Heikin Ashi chart. Use the similar support & resistance levels to go
forward.
Another interesting observation to note is in the normal
candlestick chart for the day, Nifty has formed Bearish harami pattern which
indicates turning point in the prevailing market direction. This may indicate
that nifty is heading down from here but this requires confirmation today.
Nifty Heikin Ashi Daily chart
Nifty Heikin Ashi Hourly chart
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