In my last article, I said 4780 should act as an intermediate support. But it didnot. Remember the trend is still down and my lower level targets for 4500 is very well intact. What I would do now is try to find a possible trajectory within the range.
Currently, we find the following:
1. NF did 38.2% Fib retracement of the prices from 3905 (13th July 2009) and 5168 (20th Oct 2009) at 4689. We touched a low of 4692 on 30th Oct 2009. (Refer to NF daily and weekly chart)
2. Refer to the weekly chart, NF is holding out at the neckline joining 4654 (14th Aug, 2009) and 4703 (12th June 2009) at 4707 (current closing value).
3. Daily Stoch is at 5 (extremely oversold), RSI 14 at 32 and MACD at -21 (suggesting bearishness)
My observations and hypothesis....
NF can not make a new high without completing a bearish wave. This bearish wave need to in the form of a falling wedge which has not been found in the last 3 months.
How this can be formed?
Considering the fact that NF took some critical support as mentioned above (say another 50 points +/- around this zone), we should see NF bounce back to either 4870-4900 (resisting at 34ema and 38.2% retracement of the fall) or move a bit more to 4990 zone (61.8% retracement). Either of the two points can create the 4th point of the bearish wave and cause NF to fall further downwards to 4450-4520 zone (as said earlier) to complete the wave. That zone also coincides with my "Mirror Pattern" view as well. Also the weekly 34ema stands at 4430 currently.
Now whether we stop there or not is something which can not exactly deduces right now. Mind that some waves are still there which predicts levels as low as 4200 and 3900 (probable ranges which can happen as the worst possible scenario). I still do not feel the "election GAP" will get bridged for reasons as mentioned earlier. Please note that I will keep updating on these levels in subsequent posts.
One thing to be noted, the India VIX. Its trading at multiyear lows of 25 (since its calculation started in Nov 2007). 25 has been seen as a major support and we bounced to 50+ odd levels from here in the previous 2 occasions. What I personally feel that the coming 3-5 months wont be easy for people who want to make easy money in the market. The intraday and intraweek volatility will tend to increase from hereon and witnessing a 5-7% correction in either direction may not be difficult.
My personal advice (to be verified with your professional advisor/consultant)
Create portfolio at this time. Go for value hunting. Do not buy in one shot. Rather accumulate in the dips as mentioned. Do not try to leverage yourself (FORGET overleveraging which would be suicidal). Markets will, in all probability, make 2008 highs amidst extreme volatility. Hold the shares in cash. You may be a King in 6 months (probable hypothesis). Do not be greedy and do not be fearful. Do not try to fing support and resistance putting yourself in stretched condition. Respect the market and go for value buying.
[We do have our professional service as well. Contact 9433071980 or 033-30274437]
Currently, we find the following:
1. NF did 38.2% Fib retracement of the prices from 3905 (13th July 2009) and 5168 (20th Oct 2009) at 4689. We touched a low of 4692 on 30th Oct 2009. (Refer to NF daily and weekly chart)
2. Refer to the weekly chart, NF is holding out at the neckline joining 4654 (14th Aug, 2009) and 4703 (12th June 2009) at 4707 (current closing value).
3. Daily Stoch is at 5 (extremely oversold), RSI 14 at 32 and MACD at -21 (suggesting bearishness)
My observations and hypothesis....
NF can not make a new high without completing a bearish wave. This bearish wave need to in the form of a falling wedge which has not been found in the last 3 months.
How this can be formed?
Considering the fact that NF took some critical support as mentioned above (say another 50 points +/- around this zone), we should see NF bounce back to either 4870-4900 (resisting at 34ema and 38.2% retracement of the fall) or move a bit more to 4990 zone (61.8% retracement). Either of the two points can create the 4th point of the bearish wave and cause NF to fall further downwards to 4450-4520 zone (as said earlier) to complete the wave. That zone also coincides with my "Mirror Pattern" view as well. Also the weekly 34ema stands at 4430 currently.
Now whether we stop there or not is something which can not exactly deduces right now. Mind that some waves are still there which predicts levels as low as 4200 and 3900 (probable ranges which can happen as the worst possible scenario). I still do not feel the "election GAP" will get bridged for reasons as mentioned earlier. Please note that I will keep updating on these levels in subsequent posts.
One thing to be noted, the India VIX. Its trading at multiyear lows of 25 (since its calculation started in Nov 2007). 25 has been seen as a major support and we bounced to 50+ odd levels from here in the previous 2 occasions. What I personally feel that the coming 3-5 months wont be easy for people who want to make easy money in the market. The intraday and intraweek volatility will tend to increase from hereon and witnessing a 5-7% correction in either direction may not be difficult.
My personal advice (to be verified with your professional advisor/consultant)
Create portfolio at this time. Go for value hunting. Do not buy in one shot. Rather accumulate in the dips as mentioned. Do not try to leverage yourself (FORGET overleveraging which would be suicidal). Markets will, in all probability, make 2008 highs amidst extreme volatility. Hold the shares in cash. You may be a King in 6 months (probable hypothesis). Do not be greedy and do not be fearful. Do not try to fing support and resistance putting yourself in stretched condition. Respect the market and go for value buying.
[We do have our professional service as well. Contact 9433071980 or 033-30274437]
No comments:
Post a Comment