NIFTY VIEW

 

Readers would be tired with the directionless movement of the Nifty. It has been see-sawing all over the place, closing at 4750 on the lower side and testing 4900 on the upper side. To add to the confusion, various commentators have been calling for an end to the bull markets. There has however been no clear indication that the bull market is over. We could merely anticipate a fall, there was no confirmation. We know how dangerous it can be to jump to conclusions on the basis of insufficient data thrown at you by the markets. In such times it is better to stay away from the markets, take a breather, go on a vacation till a clearer picture is revealed.

The picture now is still uncertain, whether this is a trading bounce due to short covering or whether the intermediate trend has changed to bullish. A look at the attached chart shows that the 200 DMA (Red line) has held out strongly at
around 4750. The markets have bounced back strongly from this level. However we are not yet out of the woods. This is because 4950 has acted as a strong support at least 4 times in the past. It has also given a resistance in the recent fall when the markets tried to claw back but failed. This has been indicated by blue coloured bars in the chart. Once 4950 is decisively crossed on a closing basis we can take a more confident views.

Readers have been writing to me enquiring about the lack of posts/calls in the past few days. I have deliberately avoided putting out calls because as we know we we trade with the trend. When the trend is not clear we adopt a wait and watch approach. Even though the scanner has been throwing up some buy calls, I have refrained from posting them. We will take a call once 4950 is broken on the upside.