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.

NIFTY 4800 - "You can run but you cant hide "

On Thursday May 26th - we had worked to triangulate a situation of NIFTY hitting 4800
This was the situation as on 26th May.We had emphasised on these special points

• Nifty should hit a high of 5690-5700 before starting to collapse again.
• The wave structure is composed of 6 points before it breaks away.
• We had expected 2 sets of 3 wave movements with an X wave in the middle and a high of 5690-5700

However Nifty did break the asymmetrical pattern, formed a head and shoulder pattern (cick on link) but within 3 trading sessions we were back in the symmetrical pattern. 

Nifty today morning has touched a high of 5705.8 but came back down very quickly. We expect a change in trend to start this coming week. Gann angels show a change in trend on the 6th of July but we could see consolidations as early as starting monday the 4th. 

These are safe positions where short positions can be assumed. We had mentioned earlier to watch very closely what Nifty does @ this stage. 

THE MOVE DOWN TO 4800 SHALL BE A 3 STEP PROCESS.

Thursday Nifty Trading Call 23/6/2011

TODAY NIFTY SHALL OPERATE IN THE RANGE OF 5300 AND 5240 IN A DOWNTREND   

SELL NIFTY @ 5290-5300 LEVEL TARGET IS 5240-5220.

                  

Resistance 1	Resistance 2	Resistance 3	Resistance 4	Resistance 5
5310.76	5329	5347.26	5365.56	5383.89
Support 1	Support 2	Support 3	Support 4	Support 5
5256.25	5238.14	5220.06	5202.01	5184

Strategies for 17th June

Nifty shall on friday operate in a downward trend.

Sell at 5420 levels SL at 5440 Target 5380-60

Once it hits 5360 levels long positions can be taken for 5440-5460 levels 

NIFTY UPDATE June 16th

On the 31st of May we had discussed the pattern formation of the second wave - the wave so far does look like it was broken into 3 sub waves. On 16th  of June we hit an  intraday low of 5389.8 Combining the symmetrical triangle and trendlines a low of 5365 could be very much possible. We are now looking at the formation of the 6th wave to form the symmetrical triangle pattern.
IMPORTANT 
One should observe very carefully how the market behaves at the 5330-50 levels. Short or Long positions should be taken with strict stop loss. If the market closes under the trendline a move upto 5700 levels may come into question. 


The coming wave or the 3rd wave (3) of the B wave shall be composed of a 5 wave structure. 3 upwaves and 2 down/corrective waves. Overall in our view the 3rd wave shall hit a high of 5690 -5710. and start at the low of 5360-65

While analyzing the Fibonacci retracement levels taking the high of 5944.45 on the 6th of April and low of 5328.7 on the 25th of May we see that the NIFTY retraced back to 5563 or 38.2%  and retraced back down to 5473 or the 23.6% levels. The retracement can be seen upto a level of 5709 or 61.8%

We would advise investors to clear all long positions and watch carefully how the market acts at this level.
RBI today hiked the bank rates by 25bps and analysts assume another rate hike of upto 75 bps within the coming year. We are amidst the Greek and Euro debt crisis, Inflation and America adapting quantitative policies to reduce its 14 trillion dollar debt which makes the global markets less attractive and investors more wary.