NIFTY - HAMMER AT BOTTOM

 

As can be seen from the attached chart, the Nifty has given a hammer at bottom signal on the daily candlestick chart. Confirmation in the form of a strong light candlestick is awaited on Monday. aggressive traders can trade long on the basis of the hammer on Monday keeping strict and tight stop losses, whereas conservative traders may wait for the confirmation to come in before initiating long positions. Remember, Candlestick patterns are short term patterns and the new patterns which develop after must be closely analysed, and investors must lock in profits/book losses at the sign of trouble ahead

The 4720 - 4750 support zone has held up admirably, preventing the Nifty from falling below it, even in the face of adverse news from RBI on the interest rate front. Let us hope that a strong bounce from this support results and the bullish trend is resumed.

For those investors who would like to go long, they would be well advised to do so only in Large Cap Nifty components. This is so because any bounceback is more likely in the Nifty rather than in mid and small caps and also the windscreen ahead is murky and a clear buy signal has not yet been generated.