Sunday, April 3, 2011

India wins World Cup! History repeats..History can repeat itself again in stock market as well!

“Congratulations to Team India for winning the world cup. History repeats again after 28 years”

Nifty 30 mins chart comparison:

Nifty 60 mins Chart:

As seen on Nifty 30 mins chart comparison above, we can see a period from September to October 2010 in Nifty when it moved up from 5350 to 6250. We can see that the corrections have been very brief during that rally. The current rally also started from 5350 in March. We can see that current rally took less number of days to reach 5830 from 5350 level compared to previous such rally. If this impulsive pattern repeats than we should reach 6250 level before any meaningful correction.

As seen on 60 mins chart, Nifty consolidated in the sideways action. This is what we were expecting. We do not rule out the possibility of correction till 5700 but that will offer buying opportunity. A move above 5850 -5875 will confirm resumption of uptrend on minute degree.

Banking sector has corrected in last few trading but IT sector continued the rally. Metals should now start the rally and Banking looks to have completed the down move. IT might consolidate and other sectors might start rallying. This kind of sector rotational rally will produce very brief pullback on index. Metals started a good rally which were laggards before and we can see strong upside breakout in stocks like Hindalco, Tatasteel. We were concerned before since less number of stocks were participating in the rally but on Friday the advance decline ratio was amazing favoring the uptrend. Also Midcap and Smallcap index rallied when Nifty just moved sideways on Friday.

All this confirms that the rally should continue and 5680 – 5700 should act as short term support just in case prices correct downward!


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