The benchmark Nifty tanked another 141 points on Monday, the 10th January 2011 , and ended at 5,762.85.
How much will the index fall in the short term? Where is the resistance and support levels?
Ichimoku analysis might provide some interesting clues for the very short term. The "one-look" Ichimoku chart given above throws some interesting pointers to ponder upon.
The closing price for Nifty as on 10th January was 5.762.85.
The short term Tankan Sen, or the 9-day modified average which takes the highest high and lowest low into account, stands at 5,961.00.
The slightly longer term Kinjun sen, which takes into account the 26-day period, stands at 5,951.10.
Both the Tankan Sen and the Kinjun Sen are far higher than the closing price - a clear bearish signal for the indices.
Another signal from the Ichimoku chart is the Chikou Span. The historicalprice at Chikou Span is 5992.80, much higher than the current price. Yet another bearish indicator pointing to lower markets in the short term. But how much? and where will be the pullback?
The Kumo Cloud is also higher - in other words, the current prices are much below the kumo cloud - yet another bearish indicator. Senkou Span A is at 5.937.18 and senkou span B is at 6,014.43.
The point worth noting is that both the Tankan Sen and the Kinjun Sen are flattening out, indicating short-term consolidation and minor pullback.
It is advisable to exercise caution and wait for clear signals in either way.
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