Apologies for the long absence, will be updating regularly now.
It has always been observed that once the 200 dma is crossed upwards comfortably (in April 2009 this time), the market invariably comes down sooner or later to test the 200 dma.
As is said, bulls live above the 200 dma and bears live below it - however, these are testing times for bulls, and they need to utlilise all ammunition at their disposal - for survival above their lifeline.
The job is that much harder when some key stocks have settled below the 200 dma.
A quick check shows that Bharti, Rcom, Hindustan Unilever have settled well below the 200 dma, Reliance, ONGC, SBI and NTPC are just below the 200 dma, but for more than a week now. Bulls have very little ammunition left!!
Out of the index heavyweights, only ICICIBank and Tata Steel have managed to survive above the 200 dma.
This doesn't augur well for the near future, unless the key stocks go well above the respective 200 dma very soon.
Looking at Nifty - after making the low of 4675 very close to the 200 dma, Nifty managed to claw back upwards, however, bears became active again near 4830 and 4930.
A glass can be seen as half full or half empty.
Looking at the optimistic side - after managing to hold the 200 dma, Nifty took a pit stop at 4830, and another at 4930.
Now, without going below the low on Friday. Nifty needs to cross 4950 fast and close above it. Bulls seems to have some backing from the international cues, with the DOW closing well on Friday and Nikkei futures were trading at + 190 around 11pm on Friday IST.Hang Seng has been battered and bruised and one can expect the bulls in Hong Kong to retaliate on Monday morning.
The indication is that we should have positive cues from Asia on Monday morning, and it needs to be seen, if these positive cues are enough for Nifty to cross 4950, which is just 2.2% away from current levels.
If 4950 is crossed successfully, I would not be surprised to see 5150 - 5170 in February, maybe on the day of the budget.
If 5200 is not crossed, by Friday, it opens a big window of opportunity for bears - and we shall see what they intend to do next weekend....
However, MISSION 4950+ first.
