As has been mentioned on several occasions, Nifty could not close above the crucial 5350 - 5400 band and the month of April gave too many whipsaws - the market refusing to go down. This led many to believe that this will continue forever. However, one needs to be aware that a major contributor towards the rise in the Indian markets have been the FIIs.
Whenever the FIIs decide to sell, they are not bothered about the support levels and invariably, this leads to gap down openings in the Indian market. The major reason for this is the fact that DOW retraced exactly 61% of the crash of 2008 and could not close above 11300.
Although everyone is saying that the 200 DMA which is currently at 4961 will hold, I have my doubts. The 200 DMA being tested twice within 3 months (8th February and now) is not a good sign.
The market is in an oversold state right now, and there might be a rally to 5148 - 60 level next week. The best possible scenario is a rise to 5225.
As long as Nifty stays below these levels, it can start its downward journey and the next fall, can take it to 4766, perhaps in May itself. Nifty can be out of the woods only on a close above 5280 in May - which seems extremely unlikely for now.
The logical question in everyone's mind will be - where will this correction end?
I would not be surprised to see Nifty at 4200 or even 3790 some time this year - yes, in 2010.
1 comment:
Very nice and useful post: Though on first day of the week, 5200 was achived, on tuesday 5130 closed, today on 12th May, closing was below 5170 as told by you: I think Nifty listens what you say: Today you said that it wont close above 5170; It did exactly: Tisco call gave good profits and Bharti Put we couldnt trade:
Post a Comment