Friday, June 20, 2008

Catch me if you can

Catch me if you can
In this 2002 film directed by Steven Spielberg, An FBI agent tracks down and catches a young con artist who successfully impersonated an airline pilot, doctor, assistant attorney general and history professor, cashing more than $2.5 million in fraudulent checks in 26 countries. The young impersonater is Leonardo DiCaprio, while the FBI agent is Tom Hanks. It is a fine movie, which I have seen more than once.
The Nifty seems to have seen the same movie.
The Index fell below 4400 on Friday - the last day of trading for the week. On the charts, there is no support below 4400. The absence of support is worrying as it suggests here may be a free fall sooner or later. Let's look at the weekly chart.

I define significant support as a large area of consolidation. For the Nifty, such an area comes in the wide zone between 4200 and 3600. Thus, below 4400, the Nifty can fall and find support anywhere between 4200 and 3600. This is not comforting, since the support may well come near 3600.

Well, we will let the market tell us where it wants to go. As traders, the intermediate trend remains down. This is the trend that should control our trading direction.