Has the trend reversed ?

I am again sorry for posting after 12 days.....But lets see where our beloved Nifty is heading for.....Analyze the chart below (the chart is of Nifty 1-month futures)

http://s441.photobucket.com/albums/qq134/Saptarshi_m/?action=view&current=NFason27thMarch2009.jpg

http://s441.photobucket.com/albums/qq134/Saptarshi_m/?action=view&current=NFason27thMarch2009-I.png

The following points are observed:

1. As one can see, the current rally has 2 overhead resistance zones.....one coming from the starting of bear market in Jan 2008, which touches the highs of Aug 2008 as well (violet line).....and the other is a current ascending resistance from Jan this year (red line). These 2 resistance lines intersect at 3145 exactly (red arrow), which creates a very strong supply region for Nifty. Its a very strong resistance and is quite difficult to break above. Incidentally, NF made a high of 3140 on 27th March 2009 and couldnot cross the intersection.

2. This rally also made a triple top at its high (Nov, Jan and the current one) which also creates sufficient supply at this level.

3. There is an immediate ascending support between 2960 and 2980 levels. Incidentally 2970 also creates an intersection; here being the crossing (blue arrow) of the descending red resistance line of Nov and the ascending blue support line of Mar. Ideally this should also act as a strong support zone which should be difficult to break on a closing basis. Incidentally, today's closing had been exactly at that level.

4. In the previous 2-3 attempts to break resistances, Nifty lacked its strength. But this time, we observed a rising volume and thereby an ascending supportive on-balance volume as well. Further, very few people have taken long positions at this level. The shorts have not been rolled over either.

So, under the circumstances, Nifty might try to break 3145 on closing basis for once and move ahead for sometime till fresh long positions are created. Today's huge fall will unnerve those people who for once thought of buying fresh long positions. As a result, it should be relatively easier to take the index higher. But then, one should not be over aggressive and keep stop loss around 2950-2920 since the next support is way below at 2775. Lets see what global effect has in store......