Nifty(5127): The negative price action of Monday did not get the follow through and markets continued to rally higher.
Vix and Nifty
As can be seen from the chart of India VIX above, the bullish sentiment is swinging towards the highest level since October 2011 and if we include the spike, it has already hit highest level since the Nifty peak of July 2011. So if and when you go long stay in the cash market, do not leverage.
This need not mean that participants will realise their excess and start paring down the longs right from today. From Nifty's price action market seems to be taking aim at the 200 DMA and the trendline from the Nov 2010 top.
So the next zone resistance for Nifty is at 5225-5275. Support 4995 and 4940. The first sign of weakness would be when Nifty drops below 4940.
17 Responses to “Technicals 25th Jan 2012”
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Dear Jai,
Do you still think that we can go to 4400 levels, is your indicator still is sell mode?
Ajay
Dear Ajay,
It is in sell the rallies mode. Market should go to atleast go to 4400. BUT unless we see a dip to 4800 there is no way of knowing CONCLUSIVELY knowing that a new low is coming.
The thing about my indicator is that – it is lagging the market – this has never been the case since NSE inception. If it 4800 holds – this will be a first.
Hi Jai
In the wake of FOMC decision, do you advise to enter gold/silver? Thanks
Gold/Silver late to enter. It still looks like a counter-trend move to me. 1765 exhaustion point for gold and 34.2 or slightly lower for silver.
A rule of thumb – I do not make any trading decision based on news.
Cheers,
Jai
Hi Jai,
For people like me, if they’re stuck on the wrong side short at 5000 levels in Nifty (with stop loss around 5210) – is it wise to get out or hold on for a possible correction?
Thanks & Regards,
Parag
Parag,
I do not have an answer. But the next resistance is at 5225. But a correction is defintely coming but may be delayed – which will bring it below 5000.
Jai – Any new thoughts on Dollar Index. It appears to have broken its short term upward channel.
Thanks, Vivek
Looks like a false break. Euro also at ideal reversal level.
Another question Jai – ONMOBILE – appears to be completing 5 waves up (5th appears to have extended as well – can almost count 5 sub waves within 5th). Any thoughts on shorting in the future?
Thx.
hi jai,
a few days back u had commented on bank nifty turning back from around 9832, today it is turning back from around those levels, can u kindly comment on the same about its impact on overall nifty levels
regards
shabbir
Bank nifty has been very powerful. Lets wait for additional clues. Alternately, use yesterday’s high as stop if you have to trade something.
Dear Jai,
Hero motors near 1800, do u suggest selling at this rate as told earlier by you.
Ajay
I said 1898, the stop is 2010, if this is not too wide, go ahead.
Jai,
I think you missed my question on Infy and SBI. Pls let know your views.
Regards
Infy weak. A pullback to 2780 will be a chance to sell. Not likely to cross 2925
SBI – looks strong but short term running out of steam. Let’s see.
Dear Jai,
Will you please give your views on idea cellular.
Ajay
Idea short term not clear but in the long term it looks like will get back to the 2009 lows.