RIL and NTPC along with the defensive HUL, ITC and to some extent Bhel were holding the markets so far. For the last few days, I was repeating that RIL and NTPC were the weakest link. And see what these two stocks did in the last 30 mins today!!!!!.....
RIL failed to cross the negatively sloped resistance of y1=1450 and y2=1300 after several attempts with all positive triggers. The line curve is completely bearish and is very near to the final triangular support at 1164 in NSE spot market......10 mins below it will make it the most damaging stock in the 50-stock index and might take it all the way to 850-900 in a very short time.......The negative divergence is also observed in all major indicators.....
NTPC was the other strong stock in the index which held its head high and led the power rally from the front. It just ran from its Oct lows of 130 to 200 and is currently at 178 (today's NSE closing) and has just broken the positively sloped support line of its Oct lows at 180. But during its upward movement, the On-balance volume continuously drifted down; thus creating a huge price-volume divergence which can take NTPC to 167 in the near term. If that breaks, it will be a free fall and will stop wherever it wants.
Now, if these two major stocks break down, then Nifty, in all probablity, will see 2480 which is the parallel support after breaking the triangle at 2750......And if it breaks 2480, there might be a free fall for the index. The other 45 stocks of NSE 50, though, might lend support as they have already broken to new lows.....
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