Last week was the flattest week I remember for Nifty. This is a typical situation where the bulls and bears are both winning. Actually they are confused and indecisive, hence the market isn't doing much. Last week also saw extremely low volumes. This low and dull market situation indicates that a major change is in the offing. There are 2 possibilities from here for the next week. One, the Nifty would continue to drift side ways without much action OR two, it will have a break out in either direction UP or DOWN.
As I said last week,
Nifty could not take out the resistance @ 4750-4770 zone and was continuously
selling out there. This pattern shows a classic example of how the previous
Support zone is now acting as a resistance zone.
This compels me to
think, that the breakout must happen on the downside, logically.
Nifty view for the current week -
Since Sep 2009, 4720
- 4750 has always acted as a support as you will see in the image.
Now for the
first time since then, Nifty seems to be struggling to get over this level. It
has failed to decisively close above the 4750-4770 band for the whole last week.
Any upwards attempt is met with selling. The volumes have dried up fully last
week. The markets looks confused and ripe for a breakout.
This chart pattern
leads me to believe, there is a very high possibility of a downward break out
soon. So we have to wait for confirmation this week.
The view for this
week remains the same as the previous one.
Nifty faces serious
resistance at 4750-4770 zone and thereafter at 4850-4880 zone. This second zone
remains the ultimate top for Nifty for the short term.
On the downside
expect Nifty to show 4580/4550/4500/4470 this week. Any up move close to
4700-4750 must be used to create fresh short positions with a stop loss @ 4800.
No long positions
are recommended for this week. Any bounce up must be used to create fresh
shorts.
9 Jan - Yet another day of flat trade. Nifty closed 4742 just 4 points lower. No clear direction emerged today. High 4758, Low 4696.
ReplyDeleteNifty gave a smart rally yesterday to close @ 4850. This may be a indication for a upward breakout, not yet confirmed. Now Nifty has resistance @ 4880-4900 & 4920-4950. It does not look like Nifty would be able to close above 4935 or so. Fresh shorts can be opened above 4880. SL 4950. All values for spot, adjust for futures.
ReplyDeleteNifty is trading below its long term resistance zone 4890-4920. For its upward journey to continue, Nifty must decisively clear this zone. Else the chances are it will turn back to its downward trend. Long positions must be taken only after Nifty closes above 4920-30.
ReplyDeletenifty is showing a bounce back and expected to move more
ReplyDelete