The HungAry Bear

The levels mentioned in the chart last week need to be referred again and that tells the whole story.

Nifty went to the first level on Monday and was banged down on Tuesday, 1st June, then recovered and rallied for the rest of the week to touch the second level right near the close on Friday, surely tempting many to carry longs over the weekend!

A friend @girish_k tweeted on Friday evening -

girish_k @ap_pune PIIGS are Hung(a)ry for more :D. So apt.

However, the charts had said it earlier - the trigger keeps changing.

Those who followed my old posts when I used to mention - bulls are constantly raising the bar - now, exactly the reverse is happening. 'Bears are lowering the bar'.

2 weeks back, the bar by the bears was at 5278, then at 5200. Now this bar is at 5150-70.

A gap down opening on Monday is almost sure, and if Nifty opens below 5060, it will create a dangerous formation on charts, and moreover, if the close is also below 5050, the bar will get lowered to 5060 straightaway.

The laggards of the recent past - telecom and sugars led the rally in the past 10 days, and the index heavyweights - Reliance, Tata Steel, ICICI Bank, did not do much - could it have been called a rally at all?

Tata Steel below 473 is heading for a quick drop to 466 and then 433!!

Agreed - Harbhajan Singh scores a quick 30-40 in 15 balls once in a while - but can one bank on him?

A close below 4940 opens a target of 4535! All depends on the extent of the bounce after the deep cut expected in the next couple of days.

Trading guidelines - if Nifty opens gap down below 5060, hold shorts as long as close is below 5060. If after the fall, Nifty rises sharply, and crosses 5060, one can go long and see if 5150 is getting crossed, failing which 4535 is a logical target in the days / weeks to come. All this is for the next few days and not for tomorrow. For tomorrow, I am afraid, we might close at the lows.

Disclaimer - These views can change intra-day depending on the market movement.

PS - For those who asked about HungAry, google 'Hungary crisis' and you will get the answer.