Last week Nifty showed a complete trend reversal gaining 281 points. In the same period, Bank Nifty showed a gain of 574 points. The current short term trend for both these indices remains UP for 1-2 days of this week. The prime question in every person related to the stock market is -
So is the downtrend over? Has the market bottomed out?
Although the speed with which markets recovered last week was amazing, the charts show a different picture. As mentioned in last week, I still do not see much upside from here on and the rally will most likely fizzle out.
Nifty view for the current week -
Spot Nifty has closed on the edge of a major resistance zone from 5100-5150. Any up move into this zone next week must be utilized to open short positions with stop loss at 5200.
On the upside, this rally is likely to fizzle out around 5100/5130/5180. A close above 5150 looks difficult.
On the down side, expect levels of 4990/4920/4880 to be seen.
I still hold my original view that this is not yet a buyers market. One must use all up moves to get out of all long positions.
For the bulls - Spot Nifty must decisively close above 5270-5350 zone for a serious up trend to start.
Bank Nifty view for the current week -
As indicated last week, Bank Nifty did have a smart rally. This week to the rally may be extended a little further and expect it to show levels of 9200/9235/9266. This rally is likely to fizzle out around 9280-9350 levels. On lower side expect levels of 9090/8975/8900.
FnO trade recommendation -
Buy TATA MOTOR 200 Call below 3.60 (Close 4.60), SL 2.8, Target 5/6/7.5/Higher
As stated above, the rally fizzles out today with style. 2 out of 3 downside targets for Nifty achieved today itself.
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