Thursday, May 24, 2012

Nifty: Depriciating Rupee a concern!

Bottom Line: Nifty can continue to move sideways between the range of 4810 – 4950 before giving any direction!

Nifty Daily chart:

Nifty 60 mins chart:

Wave Analysis:

Nifty managed to hold 4830 level during first hour of trading but failed to sustain there and made an intraday low near 4806. Failure of prices to rally sharply from the wedge breakout suggests inherent weakness. Also the weakness across global markets and sharp depreciation in Rupee against US Dollar continues to be a concern for near term positivity.

Indian markets are now in very fragile state as bullish patterns are failing and positive divergences are not producing expected outcomes. This usually happens when there is very less participants in the market who are interested in buying and please understand markets can fall even on low volumes.

From wave perspective, there is couple of probable scenarios now possible. We can move in sideways consolidation between 4950 – 4800 over next few days or move up in corrective fashion.

From trading perspective it is going to be a challenging environment and buying on supports and selling on resistance can be favorable strategy as of now. Also the near term trend remains down as prices failed to form any higher highs & higher lows formation.

In short, a break below 4800 can take prices towards 4600 – 4650 levels and positivity towards 5100 will open only above 4950 levels.

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