In my earlier post I had mentioned to keep a close watch on 5305 and below could witness selling towards 5244-5206. Nifty precisely tested and placed a low of 5205.65 and from there we witnessed a sharp U turn the next day. Nevertheless the Coal scam triggered a sell-off in the strong consolidation phase.
The weekly chart pattern of the Sensex shows five straight weeks of losses which is the negative factor and the positive side is that the index has still managed to close above its 50 week EMA. The upper edge of the Falling channel is also providing good support to the index. However Sensex is consolidating within a falling wedge pattern suggests bullishness.
The Nifty chart technical indicators are looking bearish. The MACD is falling below its signal line, and about to enter negative territory. The ROC has dropped below its 10 day MA into the negative zone. Both the RSI and the Slow Stochastic are below their 50% levels.
Conclusion: We can expect the index to consolidate for some more time before a break out. Coming week is an expiry week and derivatives build-up suggests that NIFTY index will hold 5170-5178 level before expiry. I expect that if Index holds this level then it would definitely try to test 5400 which is the upper edge of the Symmetrical Triangle which was mentioned in my last post. Traders are advised to take full advantage of this breakout in the coming days. Good time to enter fundamentally strong large cap stocks.
No comments:
Post a Comment