As I was suggesting for the last few days that S&P500 is the index to watch; exactly it happened that once 740 was gone on closing basis, global markets tumbled to their feet. 740 was the point of double bottom of Oct levels and the bounce that came hit 770 for 2 consecutive days. But the decisive day is the third day, whence it could not sustain above that and fell down. This was enough of a trigger for Nifty to break the triangle at 2750 on spot levels. Now that it has broken it, there is a high probabililty for Nifty to touch its parallel around 2480. This is the general law of triangles and parallels.
Now, 2 set of theories might prevail.....
1. Since Nifty didnot fall much (only 9%) even though S&P500 fell 20%, any bounce in S&P might lead a rally in Nifty.
2. S&P and Dow will consolidate around 700 and 6800 respectively while Nifty will grind to lower levels.
My guess is the 2nd theory. Simple reason is the heavyweights have failed to cross resistances and returned back heavily. If RIL, NTPC, ONGC, Infy fall down, then there is slim chances of Nifty showing strength.
Also, by this time, all retailers have been drawn to this mindset that Nifty cannot fall. There were many stock pickers at these levels. Even the long traders stop should get triggered. Panic may not be seen this time around though. The reason is volume will remain low due to lack of participation by weaker hands. But this can be the frustrating time correction which the last leg of a bear market witnesses........A slow and grinding lower lows by Nifty over a period of time........Maybe some retracement would be seen in next 2-3 months by the so called pre-government rally.
Enjoy Trading!!!!!
Now, 2 set of theories might prevail.....
1. Since Nifty didnot fall much (only 9%) even though S&P500 fell 20%, any bounce in S&P might lead a rally in Nifty.
2. S&P and Dow will consolidate around 700 and 6800 respectively while Nifty will grind to lower levels.
My guess is the 2nd theory. Simple reason is the heavyweights have failed to cross resistances and returned back heavily. If RIL, NTPC, ONGC, Infy fall down, then there is slim chances of Nifty showing strength.
Also, by this time, all retailers have been drawn to this mindset that Nifty cannot fall. There were many stock pickers at these levels. Even the long traders stop should get triggered. Panic may not be seen this time around though. The reason is volume will remain low due to lack of participation by weaker hands. But this can be the frustrating time correction which the last leg of a bear market witnesses........A slow and grinding lower lows by Nifty over a period of time........Maybe some retracement would be seen in next 2-3 months by the so called pre-government rally.
Enjoy Trading!!!!!
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