This past week ended with that last hour short covering on Friday. I am told the shorts covered due to the vote of account on Monday and maybe that a positive surprised awaited them from the FM. As far as I a concerned the VoA is just a discourse on the achievements of the Govt with an eye on the 2014 General Elections.
As a disclaimer, I am holding shorts in Nifty Futures and have added to them in the dying moments of trade on Friday. Again I am happy to cover my position and go long if the market proves me wrong. Another thing which worries me about this pullback is that the Volumes have only gone lower since the pull back started. As a trader you want to see pull backs or trend changes supported by heavy volumes which then gives you conviction to cover your shorts. Unfortunately the past shows that any pullbacks devoid of volumes only take the market lower.
For this week, 6100 is a crucial level where traders will look to short the Nifty. What is required is a flurry of good news which can take this market back to the Top. Sadly even the US markets have pulled back on decreasing volumes which sort of gives me conviction on my shorts. That is a different matter though.
If 6100 is crossed, 6150 would be the next point of resistance which would be certainly see some selling pressure come in. Also if the US markets were to start falling we could see huge downturn here as well. As I have mentioned in last weeks analysis as well, a strong close above 6200 – 6250 levels and we can start looking beyond 6300 levels.
As seen on the Daily chart, Nifty had taken support at the trendline and has formed a Bullish Harami Pattern on Friday’s close. Some upmove cannot be ruled out on Monday but I fear it will get sold into, particularly if the FM makes any statement which the market does not want to hear.
On the downside the 200 DMA is providing support to Nifty around the 5970-5980 levels since the last 8 trading sessions. Any break and close below that and we would be staring at 5850 and then at 5750 levels.
Nifty is bearish on the Weekly and Monthly charts.
As usual, the market will decide it’s course of action. All we need to do is follow what it does.
Nifty trading levels for the next week are as follows
Buy Above 6047 Tgt 1 – 6110, Tgt 2 – 6170, Tgt 3 – 6230
Sell Below 6047 Tgt 1 – 5986, Tgt 2 – 5925, Tgt 3 – 5864
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!!!