NIFTY UPDATE – BULLS BE CAUTIOUS

Dear All,

Lot of Drama’s happening on Political front related to formation of Karnataka Govt. Whether BJP makes govt or not.. These short term events can not change the market sentiments.

If you see, Nifty rallied from 9960 levels to 10900 levels in no time but reality is that market breadth is negative and not many stocks participated in the rally.

On economic factors, Crude is moving higher and INR depreciation will be putting more pressure on Fiscal Deficit. 10 Year Bond Yield also nearing 8% where Rep Rate is at 6%, in the coming RBI Policy I’m expecting a Rise in “Interest Rates”. 

Even see how perfectly charts gives you an idea of where market is heading in short term.

Nifty Daily Chart
Nifty Line Chart

Nifty took perfect resistance at confluence zone of Fib retracement at 78.6% and also the trend line. There is a Bearish TRI STAR Candlestick Pattern made and yesterday’s sell off in heavy weights confirmed the Bearish Sentiment and confirmed the Negative Diversion. Nifty immediate support will be at 10600-10400-10200 levels and Resistance at 10800-10900-11000 levels.

I’m expecting more sell off in large caps now instead of mid and small cap stocks.

Nifty should make base at 9600 levels where you might get some good valuations in stocks to look for long term investments.

Cheers

Sid