Friday, August 3, 2012

Nifty to continue sideways action...

Bottom Line: Nifty continued to move in a narrow range. Prices shall continue to move this way atleast for 1 to 2 weeks before any directional move…

Nifty Daily chart:

Nifty 60 mins chart:

 Wave Analysis:

We mentioned in previous update, “In short, the bias is positive over short term as long as 5210 is intact on downside. The immediate resistance is now at 5250 – 5270 levels.”

Nifty made a low of 5209.95 and bounced back from there. The lower level of 5210 has been very accurate. Prices had a minor gap down opening and failed to enter into positive territory throughout the day. Also as shown on 60 mins chart prices have moved out of the channel. Given the weakness in global markets Nifty can have a gap down opening around 5200 levels. It will be important to observe if prices can defend the support of 5190 level. A move below that will indicate that the b of B has started which will last for around 5 days. And can take prices towards 5110 levels.

Indian markets can be challenging for trend followers over short term. It is important not to lose patience and the bigger picture which is still bullish as of now and once this corrective wave ii ends next leg on upside towards 5600 can start. However it is important that this wave does not take prices below 5000 level.

In short, a move below 5190 can take prices towards 5110 levels. Any move above 5230 will take it towards 5260 – 5270.

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