Last week Nifty hit another low of 4531 and rallied almost 200 odd points from there closing 4714. This was a typical pull back in a bear market and caught traders on the wrong foot. The volumes were pretty thin indicating a weak pullback. If you did not know where to place at stop loss for your short positions, you might have had sleepless nights last week. Nevertheless the 4800 -4880 resistance zone remains intact and next week we could see more downside. This is the last calendar week and many people are betting on the year end target.
Nifty view for the current week -
Written 18 Dec 2011-"My view that Nifty wont be able to take its head above 5000 soon has gathered further strength now. Going beyond 4820-4840 now looks painful for the index, and any attempts (if any) must be used to open fresh short positions. All attempts to move up shall be met with immediate selling. To me 4880-4900 appears to be ultimate top for Nifty for a few months from here on." This original view of mine remain intact for the current week. I expect the selling to intensify. Nifty is likely to show 4680/4650/4600/4550/lower levels in the week.
Positional traders must maintain short positions in Nifty futures with stop loss @ 4840 on closing basis. Keep away from long positions.
Bank Nifty view for the current week -
As indicated last week, Bank Nifty immediately had a huge supply the moment it touch 8450 and lead to a lower close by almost 150 points intraday. Up move last week was not supported by volume.
This week to expect selling to continue with bank Nifty showing 8190/8120/8000/7800/lower this week. It faces a huge resistance @ 8450-8550 zone and any attempts to rise to this levels must be used to open short positions only.
Positional traders must maintain short positions in Bank Nifty futures with stop loss @ 8600 on closing basis. Keep away from long positions.
Power Investing -
I recommended Buying 4500 Jan put around Rs. 80. SL 40. Targets - 150/200/230. Hold till Jan expiry. This recommendation was posted on 22 Dec on Twitter - http://twitter.com/#!/SamirMachawe/status/149711223229911040 On 23rd, we had a opportunity to buy this put @ Rs. 60. Those who wish to take position still must do so in early trade on Monday.
Important information -
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