Feb 072012
 

Nifty(5361): Price is ignoring the stretch and the warning signs from momentum indicators and we are seeing Nifty movin up relentlessly. More than anything we need to look at the longer term now. Let me outline 3 possible scenario

Case1: A new bull market is underway:

In that case Nifty is headed north of 7000

The problem with this technical structure is this - the bottom at 4530 has been an atypical one. The speed of the move though is in favour. This is our Outlier case.

Case 2: An uptrend for the next 6 weeks and then a drop equal in amplitude to the drop from Nov 10 to Dec 11 resumes.

Nifty is headed for 5650 or 5950 with some pull back if this scenario is going to unfold.

Case 3: The bear case

Nifty ends its rise today or max tomorrow and targets a break of 4530.

I will expand on this with charts and labeling when I get more inputs from Commodities, Currencies and other inter-related markets.

My base case is SCENARIO 2.

 Posted by at 8:43 am

  3 Responses to “Technicals 7th Feb 2012”

  1. Do you still expect Nifty to drop to 4950 in the near term?

  2. Jai,

    Any specific stocks that you would want to throw as ideas. I respect that these can be just ideas (not calls), but want to play some risk now…

    Regards

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