Dated :- 01.06.2013  (Saturday)           NIFTY  :   5985.95

Hi,

Readers,

Nifty has done exactly what was mentioned in my last blog. It was clearly mentioned in last blog that below 6128  –ve  bias shall continue, but shorting was advised only on breakdown of 6050. It moved completely in the shorter range of 6050-6130 described in last blog and even touched the higher range on expiry day (when it closed at 6124 but could not break the range on upside).

It was also advised that between 6050 - 6130 is no trade zone. On Friday it broke 6050 (lower part of range) and could not rebound, weakness took its toll on the market and it closed at 5985.95 (down 138 points).

Now as Nifty has broken 6050, short positions should have been taken with the stop loss of 6090 on half of the position and 6130 for rest half with the aim that Nifty may go to 5920 levels and try to break it to go down further. Important point to note here is that 5915-5920 is very crucial point. Below this point Nifty will give multiple breakdowns such as :

1)     Bollinger Band Breakdown on daily charts

2)     End of Higher tops and higher lows cycle on daily charts

3)     Bearish Head & Shoulder breakdown on daily charts

4)     Breakdown of bearish engulfing pattern on weekly chart

5)     Other structural breakdowns

This 5915-5920 becomes very crucial level and Nifty sometimes show volatility around important levels before giving breakdown. Thus, around these levels sit and decide your risk and reward appetite to swallow that volatility. For traders, pyramid shape profit booking is also advised as it is always prudent.

After such a fall of 138 points in one day, volatile swings may come but these are part of market.

I have repeatedly being cautioning not to take long position and the result is in front of you.