Nifty Weekly Analysis for WS 3rd Feb

My apologies for not posting last week’s Nifty Analysis.

Last week started on a bad note as Nifty had a gap down opening and was not able to fill the gap throughout the week. Nifty had formed a shooting star pattern close to the highs in the preceding week so this fall does not surprise me. Also there are a lot of other factors at play for this decline. As much as India purists would say India is fairly insulated from the QE taper, I beg to differ. My contention is that if the US economy has started to show signs of improvement much of the money invested in Emerging markets like India would find it’s way back to the US. Not that I am bullish on the US markets in any way.

I had tweeted few days back that we could see a decline in major US and European markets and I maintain my stand. There could definitely be a pull back rally but that should be used as an opportunity to short the market at best. The US market is akin to a “Druggie” who has been systematically drugged for the last 6 odd years. And what happens when the Druggie doesn’t get his quota of drugs??? That’s what will happen to the US markets.

Anyways back to the Nifty now. Nifty has formed a Bearish Engulfing pattern close to the Resistance on the Monthly charts. Ominous signs these for shorters. I would be particularly interested in 5972 as it is the Nov low. Nifty took out the Dec low of 6130 easily and closed the month at 6089. A weekly close below 5972 would certainly be bearish in the medium term for Nifty and we can look at levels of 5700 also. At this point this thought is slightly far fetched though, but if World markets go down spirally, 5700 could arrive sooner than later.

On the brighter side a close above 6250 and we could be eying the 6350 – 6400 levels again.

I think we should see some sort of buying support in the 5945 – 6000 zone if the Nifty happens to go down. Folks who have shorted Nifty at higher levels can look at 5950 as a profit booking area.

As usual, the market will decide it’s course of action. All we need to do is follow what it does.

Nifty Monthly Feb 13

Nifty trading levels for the next week are as follows

Buy Above 6102 Tgt 1 – 6176, Tgt 2 – 6263, Tgt 3 – 6338

Sell Below 6102 Tgt 1 – 6015, Tgt 2 – 5940, Tgt 3 – 5854

Note: All levels are for Nifty Spot. Kindly adjust the same for Futures.

Very Important – DO NOT TRADE WITHOUT STOP LOSS. Use sound Money Management with your Trading Plan and do not over leverage vis-a-vis your trading equity.

Have a Profitable Trading week ahead!

To your Boring Success!!!

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