Sunday, July 17, 2011

#50 Nifty Update

Nifty has been very volatile since last few weeks and it has been difficult for traders to decide the trend of the market. Market is purely news based primarily on the global issues in Europe and US. European countries such as Italy and Portugal are in debt restructuring which could weaken their economy affecting the world market. European Index has been more volatile than our market and it’s in danger position. On Friday bank stress test results were out and 9 banks from Europe failed to pass and its effect will be seen on Monday. On the other side in US Bernanke said that don’t expect any further aid for US debt market in recent future. So globally market is looking very dangerous. Domestically Indian companies are announcing their quarter results. Quarterly results are expected to be weak. IT firms are posting flat results with almost marginal change, while in Auto sector 2 wheeler companies are posting high growth and 4 wheelers are posting down grade in demand. Cement sector and steel sector are expected to post negative results due to pressure of high raw material cost on its production. On other side FMCG and PHARMA is expected to post sustainable growth. Telecom sector is a cautious because I feel impact of interest on loans for 3G auction will be reflected in this quarter and 2G scam still on the mouth of each investor its difficult for them to outperform. Now technically speaking market is at very dangerous level. As I had said about the “symmetric triangle” formation, it got validated as market couldn’t close over the resistance line for 3 consecutive days. On other side it is taking strong support of 200 DEMA at 5580 levels. All the indicators are bias as they are contradicting each other. But a gap is still unfilled at 5320 levels and I strongly feel that gap will be filled up any time in future and its better if its early before new highs. So now this expiry will decide whether we could see 5200-5300 levels first or 6000 or new high.
NIFTY levels :-

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