Dear All,
This week the S&P CNX Nifty closed at 5482 which according to the charts is a very crucial level for it. A close below 5480 will definitely see us testing the 5200ish zone on the Nifty which takes it lower by at least another 3%.
What we have done is to go back to the basics of technical analysis which talks about supports and resistances. We have highlighted the resistances in red color from where the Nifty has fallen every time and the supports in black which are the zones where Nifty witnesses buying and bounces back.
So according to our reading of the charts we are very crucially poised and if you play by the book then it’s prudent to buy the Nifty at 5480+ levels and keep a stop loss of 5446 both being spot figures. However for traders who love going short we would advocate a weekly close below 5450 to go ahead and short the Nifty.
We began July with the Nifty at 5700+ when we had emailed and blogged about being cautiously bearish and we still continue to hold a bearish view on the market. However we are not ruling out a ultra quick up move to 5650 if buying does come in.
Our previous posts on the Nifty:
- April 2011 - http://denipconsultants.blogspot.com/2011/04/nifty-view-denip-consultants-dewang-k.html
- June 2011 - http://denipconsultants.blogspot.com/2011/06/nifty-view-denip-consultants-dewang-k.html
- July 2011 - http://denipconsultants.blogspot.com/2011/07/s-cnx-nifty-cautiously-bearish-dewang-k.html
Clearly the above posts show how we have been bearish on the Nifty since 5900 and continue to maintain our view.
Thanks,
Dewang K Mehta
DENIP Consultants
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