During the week NIFTY acted placing a low of 4906 and closed the week at 4930. The other interest news for
the week was GAAR. Government decided to put off GAAR by a year on Monday
morning and market showed some recovery. However the recovery was just near to
the technical resistance level of 5140.
The
technical indicators of Sensex are looking bearish and a deeper fall is likely.
The MACD has crossed below its signal line and entered into the negative zone.
The ROC is negative and below its 10 week EMA. The RSI has dropped to the border
of its oversold zone. The slow stochastic has entered into negative territory.
A pullback towards the trend line can be used as an opportunity to sell.
The
20 day EMA has crossed below the 200 day EMA and the 50 day EMA is on the verge
of acting likewise which will confirm a return to the bear market. The
technical indicators are looking bearish and in the oversold region. The MACD
is falling below its signal line in negative territory. The ROC is negative,
and below its 10 day MA. The RSI is inside its oversold zone trying to turn
around. The slow stochastic is in its oversold zone.
Conclusion: The overall view is still negative so it is
important to understand how far NIFTY can go down from the current levels. Index
is in corrective mode and historical data suggests that NIFTY can take reversal
at the level of 4760-4800. The highest Open Interest build-up for PUT is at 4800 suggesting strong support. Most of the
Technical Indicators & Oscillators are entering into oversold zone. Nevertheless
I strongly feel that NIFTY can definitely find support in the range of 4760-4800
for coming weeks. It would make sense to start building small long positions as
NIFTY approaches this support level with a bounce back target of around 5100. A pullback towards
the down trend line is possible but it would be a selling opportunity. Sit on cash
should be the priority.
No comments:
Post a Comment