NIFTY

NIFTY

As said in the last post nifty ran into the resistance zone of 5320 and crept above it only to fall below 5300.

Now as the situation stands 5200 has become an important support zone for nifty below which the nifty can test the 5100 mark which incidentally is the area where 50 and 100 DMA lie and hence makes a good support area which the bears will want to test.

Points to be considered in the coming week.

1>     RBI action on interest rates now that fuel price have been more or less deregulated

2>     The important support at 1040 for SnP500 which can be tested and if it breaks then 5200 can break and more weakness can creep in.

3>     The fact nifty is below its 5 dma is itself a weak signs and it it is not conquered soon then weakness will prevail.

4>     There is a probable inverse head and shoulder with a target of 5478 and above, although it has almost achieved it target a sustained effort by nifty to stay above 5200 can lead to the levels of 5400 and above being retested.

 

For short term traders long are dangerous as long as nifty does not close above 5dma the same 5 dma will act as trailing stop loss for traders having short positions.