Presentation on theme: "Detailed Nifty Analysis 9 Sep 09. In the last presentation… 4700 is THE LEVEL. Nifty shouldnt just cross, but it must sustain as well to move ahead. Given."— Presentation transcript:
Detailed Nifty Analysis 9 Sep 09
In the last presentation… 4700 is THE LEVEL. Nifty shouldnt just cross, but it must sustain as well to move ahead. Given the worries of monsoon, it is very important to safeguard oneself. 4270-4300 a critical support now. We expect a bounce in this zone, which can be traded long. Nifty moved exactly as advised. You can download the pps at www.activetrades.in/downloads/Nifty1089.ppswww.activetrades.in/downloads/Nifty1089.pps
Nifty Long Term Chart Nifty Long Term Chart: As it looks clear from the chart, the long term bullishness of Indian markets is still very much intact. The earlier supports are now resistances. Stiff resistances. See the effect of it As and when R1 broke Nifty went to R2. Meaning 6000 again?? Conclusion from the long term chart basic analysis: 1) The long term bullishness is still intact. 2) The R2 4400 is now broken, though insignificantly, leading way towards R3. 3) The R3 stands at 6000+
Nifty Med Term Chart Nifty corrected from 6358 to 2202, 4154 points. Note the critical level. Observe… 2202 to 4703 = 2501 = 61.8% of 4154. FIB4 Summarizing the view, there is a critical level at 4700. 2 factors make it critical: a medium term multiple wave reactions, and the critical Fibonacci retracement. Though these levels are static, and that means that they will never break, makes them seem little unrealistic because someday they will break. But looking at the past, these kind of patterns do affect the movement once or twice or even more than twice. Note that in the previous edition, we advised quite boldly that 4700 is a critical level. That level has never been seen again.
Nifty Med Term Chart The resistance, slightly inclining, didnt break The support line. Also note the triangle formation The support at 4550 Observations: The resistance is slightly inclining, and did NOT break. The support is now at 4550. Also, there is a triangle formation clearly visible.
Nifty Med Term Chart For Nifty to move up, it might move in the parallel channel. For that 4550 needs to sustain, else this will not remain valid. Observation: For tgt 5100, 5500, 4550 is a must.
Fibonacci Levels 4200, 3900, 3400. (support)
The key observations in Nifty: 1) The previous high of 4720 has been broken though not marginally. 2) The resistance formed by the twice upmoves to 4700 has NOT broken yet. 3) There has been a broad view in the general public that "above 4700 market is bullish". Behaviourially this had to be broken if the market has to go down. Nobody will buy and then how will the biggies exit? 4) All the stories like: "Market is going up because Chinese money is coming to India", Indian ministers warn "Drought", Food inflation uncomfortably high, No further chances of interest rate cuts... And still no effect. Why? Because markets are slowly getting into the euphoric stage where people don't look at the news. They are so confident about the upmove that the news is ignored. Our view is that news might be ignored but not for a long time. 5) Technically, when markets consolidate for a long time after a big move, they usually reverse their direction. For example: At 2200- 2500, markets bored everybody. It was a long consolidation and everybody was "sure" about 1800 Nifty. Rest is history. 6) The trading range is broad: 4400 to 4750. As we have been saying from a long time, trading zigzag in this range is ok. One must wait for a direction. 7) Technially, there is an energy buildup by converging triangulation. So chances are that 4700 finally breaks and we see an upside.
Summarizing Nifty has broken recent prvs high but did not break the resistance formed by the recent highs, result of which, it fell. One can SELL at 4750-4780, and wait for that to break, OR one can trade long with a stoploss of 4550, which might hit. Nifty is making triangle pattern which indicates that there is a planning of upside, but this is not a confirmatory trigger. But this implies that if final resistances break, we can have a comfortable rally. 4550 is the critical support now. If breaks, it might not fall immediately, but the chances of upside will become less. Its like a puncture in tire. Eventually, it should correct. The fibonacci supports are at 4200, 3900, 3400. So if 4550 breaks, we might see a pullback then a fall or a direct fall. The fundamental bad news are being ignored which makes it even more difficult. All the news channels will start talking about these factors if Nifty corrects.
Summarizing So as and when 4780-4800 sustains, tgt 5100, 5500. Resistances: 4780-4800 Supports: 4550, 4200, 3900, 3400. Strategies: Either exit around resistance and wait for it to break, OR, Hold with stoploss of support.
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See how precisely we advised, and we even sketched the forward chart… And see the future movements indicated by grey and red. You can read the complete report at the Nifty View page.
The actual chart… It is an old chart. Now Nifty is around 4600+