Dear all, in my last 3 articles, I had spoken about the following :
1. Strong support of 3350-3370
2. Nifty target of 3650 and
3. Structural shift from bear to bull market.
The first point was proved 2 days back and the second point was fullfilled today. Time will prove the third hypothesis.......
Now lets analyse what happened in the last few days and why it happened like that. The FII's/promoters/operators spent thousands of crores of rupees in the entire month of April to initially touch 3510. Hence they could not sacrifice the pain to give money to everyone. But they needed to trap the bulls as well. So came the 100 point crash on 28th but Nifty held on to the 3350 support. So, buying started on expiry day and the series expired on the high. Now, since there were 4 days of leave after that, very few people dared to take home deliveries. This resulted in the 150 point gap up today backed by decent global cues. Since there were no deliveries, Nifty didnot even go down by 10 points after the initial gap. Neither they had the courage to create shorts or enter into fresh longs. And this was the opportunity for smart money to move in.
Remember one thing : A market is a place where transactions take place between two or several parties but not that everyone will make profits.
Now where do we go from here?
The basic problem is maximum traders/investors are trying to find resistance levels after each upmove. They are sitting in cash or waiting to see their previous portfolios turn into green. The DII's cannot take risk at this levels because its all people's money. Everyone wants the market to come down. Surely it will but maybe after every Tom, Dick and Harry is dragged into fresh longs positions.
Technically, the following things happened:
1. Today Nifty hit 61.8% Fib retracement of the Oct falls. And with that it broke out of the 13 day congestion zone.
2. Please note that volume was reducing while Nifty continued with the upmove.
3. A strong support now lies at 3500 (1-month futures levels)
4. Nifty PCR is at 0.95 which shows neutral zone.
5. Please note there is no GAP in Nifty cash charts. Though there are several of those in futures as well as sensex charts.
My sense says that Nifty with the help of some large caps (like power/metals/HC/FMCG) will try to move towards its immediate target of 3880. Though a fall till 3500 is also possible prior to the next level. PCR suggests that nifty cannot fall heavily from these levels.
As stated earlier, I would still like to remind you that the bear phase is over. Elections are round the corner. Knee jerk reactions can take place on 14th after the exit polls results are flashed. BUT, any dip, if at all, should only create room for the next upmove, ie. 4750-5000 on Nifty (sounds absurd??? Well, it really does.....but a wave suggests that only......)......
Take care and Happy trading !!!
1. Strong support of 3350-3370
2. Nifty target of 3650 and
3. Structural shift from bear to bull market.
The first point was proved 2 days back and the second point was fullfilled today. Time will prove the third hypothesis.......
Now lets analyse what happened in the last few days and why it happened like that. The FII's/promoters/operators spent thousands of crores of rupees in the entire month of April to initially touch 3510. Hence they could not sacrifice the pain to give money to everyone. But they needed to trap the bulls as well. So came the 100 point crash on 28th but Nifty held on to the 3350 support. So, buying started on expiry day and the series expired on the high. Now, since there were 4 days of leave after that, very few people dared to take home deliveries. This resulted in the 150 point gap up today backed by decent global cues. Since there were no deliveries, Nifty didnot even go down by 10 points after the initial gap. Neither they had the courage to create shorts or enter into fresh longs. And this was the opportunity for smart money to move in.
Remember one thing : A market is a place where transactions take place between two or several parties but not that everyone will make profits.
Now where do we go from here?
The basic problem is maximum traders/investors are trying to find resistance levels after each upmove. They are sitting in cash or waiting to see their previous portfolios turn into green. The DII's cannot take risk at this levels because its all people's money. Everyone wants the market to come down. Surely it will but maybe after every Tom, Dick and Harry is dragged into fresh longs positions.
Technically, the following things happened:
1. Today Nifty hit 61.8% Fib retracement of the Oct falls. And with that it broke out of the 13 day congestion zone.
2. Please note that volume was reducing while Nifty continued with the upmove.
3. A strong support now lies at 3500 (1-month futures levels)
4. Nifty PCR is at 0.95 which shows neutral zone.
5. Please note there is no GAP in Nifty cash charts. Though there are several of those in futures as well as sensex charts.
My sense says that Nifty with the help of some large caps (like power/metals/HC/FMCG) will try to move towards its immediate target of 3880. Though a fall till 3500 is also possible prior to the next level. PCR suggests that nifty cannot fall heavily from these levels.
As stated earlier, I would still like to remind you that the bear phase is over. Elections are round the corner. Knee jerk reactions can take place on 14th after the exit polls results are flashed. BUT, any dip, if at all, should only create room for the next upmove, ie. 4750-5000 on Nifty (sounds absurd??? Well, it really does.....but a wave suggests that only......)......
Take care and Happy trading !!!
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