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S&P CNX Nifty -Take your 50-50 chance

, February 4, 2014, 0 Comments

No matter what one would say, either the PM, RBI Governor or our Finance Minister stock market has its own frequency of operation. As a curve it may rise and fall in sync with the underlying fundamentals of our economy as well as indicative of future business & enterprise needs. Market can take cues from the guidance offered by the finance Minister P. Chidambaram –“ India will take whatever steps necessary to ensure stability in financial markets” but overall it has its own logic of decoding the economic situations prevailing in the country.

Invest Or Not To Invest: A trader may buy adequate with adequate stop loss and trailing stop loss for a small bounce. Stop loss may be 35-40 point below the buy price. A prudent trader may short below 5775 with stop loss of 5800. On stabilizing of zero line may long only after Nifty hits below 5775 on ascending support line with stop loss of 5750.

Chart Structure: Nifty is in ascending channel which is technically a bullish structure, most of the peaks and troughs within the channel fall in category of the higher highs and higher lows. In chart various nifty price points are labeled. One big fall in Nifty at 5118 did not alter the bullish trend; as Nifty moved back into the uptrend channel & went on make a new high of 6425 in early December 2013.

Price Pattern: Within the ascending channel any particular pattern is not observed as the ascending channel itself gives broad range for Nifty to play around. Current daily down trend might take Nifty to 5700 -5775 which is support line within the ascending channel. No significant change in volume can be observed.

Moving Average:  Nifty is still above the 200dma which is the broader trend. But Nifty has fallen from the 50dma, which is short-term trend decider in daily time frame. On observation Nifty on crossing 50dma on upside makes a higher peak, as it falls below 50 dma it makes new higher trough often on ascending channels supporting line.

Nifty take your 50-50 chance- MarketExpress

Technical Momentum Indicator: KST Indicator currently is in over bought zone &KST indicator is losing momentum along with lower Nifty prices.  As Nifty falling halts along with KST indicator, then on stabilizing of Nifty on support line & KST indicator on Zero line, will be kind of pause button between bulls & the bears.

Technical Conclusion: No clear Bullish OR Bearish structure is being observed in the daily time frame chart. But at 5775 a bounce back may happen. Though technically Nifty may give few points up before crashing on the support line.



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