Sunday, July 31, 2011

#61 Nifty Update

NIFTY was taken over by bears since Tuesday of the week. On Monday, NIFTY confirmed the morning start which I mentioned in NIFTY view of my last Sunday. But we could notice that for the second time in last 1 month NIFTY could not confirm its breach over the strong resistance line. That resistance in the graph has been validated 6 times in last one year which means that market yet not in full control of bulls. Last week RBI announced 50 bps hikes instead of expected 25 bps hike which failed to confirm bulls. Second biggest domestic news was that of illegal mining state of Karnataka. Many well known companies have been stated in this 2cd biggest scam after 2G scam. Companies such Adani Enterprise, Sesa Goa and JSW steel to name few are mentioned in scam till now. This has focused import of iron ore from outside India to continue production. Now next week 2cd August is the Deciding day for US debt market which will have effect on world economy. China and Japan are the major chuck holder of US treasury bills so they are praying that US doesn’t default the deadline. So wait for some more time to make fresh long positions. Technically speaking chart has witnessed two consecutive Doji’s of which latter being a “gravestone doji” supporting bears. 14 Day RSI has breached 50 level mark to 43 signaling a sell for NIFTY whereas MACD is just to cross central line for the bears. As I have been talking whole month about the “unfilled gap” at 5350 now its time for it get filled. With the current situation of market it seems market will for sure come down to fill it up. Strategy on NIFTY would be to sell with the SL of 5565. But be long on market only if NIFTY Closes above 5644 level thrice this week that too consecutive close.
NIFTY levels :-

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