NIFTY TECHNICAL OUTLOOK FOR WEEK 5

Stocks marched higher last week on the RBI's cut in the banking reserve ratio and the US Fed's promise to keep  its zero interest policy intact into 2014. The policy reaffirmed the pessimistic outlook of Ben Bernanke for the American economy. The Indian index has now gained about 12.5 % in January and the FII's have pumped in Rs 8000 cr into the markets. The bulls have now managed to push NIFTY towards its 200 DMA last week.

DIVERGENCES

If NIFTY manages to remain above the 5200 level this week the next resistance level would be @ 5400 levels which is the previous high. The momentum would gain strength on a close above 5285. The markets have come a long way in the past 3 weeks. RSI stands at 75 and Stochastics continues its high ride at 95.





NIFTY WEEKLY

The picture shows the NIFTY weekly and daily resistance levels . A week long consolidation is now expected at this level. A close below 5120-30 levels could be considered a good shorting position.
Now because the 20 DMA has crossed the 50 DMA, I would wait for 5160 levels to be attained.


Good stocks for intra-day longs would be TCS and M&M :)



FIBONACCI RETRACEMENT

The index closed exactly at the 78.6 % retracement levels and has a hanging man candlestick. This somehow is starting to give me a feel that there may not be much upside left and we may see a dull and boring week coming ahead.