Last
week it was mentioned that ' Sensex and Nifty have dropped near the gap area
between 5526 and 5447 where one can accumulate longs with respective stop at 5400.
What happened next - Nifty dropped till 5477 and bounced back sharply till
5611. The pull back lost charm after the Q4 announcement of Infy.
Hope of Bulls is sinking as Index once again closed below the 50
week EMA for the second week. The down trend in the Nifty continues.
Support from the ‘gap’ area between 5526 and 5447 is protected so far.
The gap area is
still open between 5447-5477. The 50% retracement level of 5440 is important as
a convincing break can drag the Index further to 5321/5270.
Nifty 5500 Call
added 7.5 lac fresh contracts in OI and 5500 Put decreased 6.4 lac contracts
indicating fear around 5500. On Friday, Option writers were writing call
options and winding up their positions from put options suggesting that Index
may breach 5440 and may retrace to 5321 and 5270 in coming days.
Daily technical
indicators are looking bearish, after correcting from oversold conditions.
Nifty has spent a week below its 200 day EMA. The 20 day EMA has crossed below
the 200 day EMA. The 50 day EMA is falling towards the 200 day EMA which are
bearish signs.
Conclusion: Sensex
and Nifty continue their down trends trading within a diagonal triangle
pattern; break on either side will decide the further move. Volatility can be seen, till either side of triangle is not broken . However, till the
upside triangle is not taken Bears are on the upper hand and Nifty will
continue its down trend. Breach below 5440 can further extend the weakness to
5321/5270.
No comments:
Post a Comment