Dated :- 05.01.2014 (SUNDAY)

                                                       NIFTY  Spot :   6211.15

Hi,

Readers,

Nifty did exactly the same as was mentioned in my last blog.

It was clearly mentioned in last paragraph of my previous blog that if:-

Nifty goes down from 6221 run through, without pausing at 6221, than Nifty will be deeply oversold and would rebound.

You must have observed, Nifty went down run through below 6221 & touched a low of 6171 and rebounded back to close at 6211.

The condition for this rebound was that, if Nifty goes down run through without pausing at 6221.

Because once the indicators become deeply oversold they do not allow Nifty to go down further without pause or rebound.

Again let me reiterate that the structure of Nifty has started becoming weak (subject to final confirmation).

At present Nifty is still holding support levels.

But it seems that Nifty is only showing that it is trying to hold support levels.

My repeated warning was do not be extra bullish and 6420 will be very difficult to take out.

And now looking at the technical indicators it looks that it is just a matter of time that Nifty breaks these support levels.

Now What :-

Nifty is still holding support levels.

Nifty structure has started becoming weak (subject to final confirmation).

Looking at the charts it looks that Nifty will not be able to cross 6420 without going down.

Rebound to 6250-6280 levels can be possible and if at all that happens, it will be shorting opportunity.

But remember shorting shall be done in controlled quantity as the Nifty is still holding support level of 6200 and 6150.

Another thing is that Nifty will be volatile while coming down and sharp swings can come.

Because if Nifty will come down in first half of next week than it will again be oversold.

Thus it is also advised to keep booking profits also.

As in technical analysis, it is “PAAP” to make loss in a trade which comes in grip.

Trades once identified and comes in grip should always be closed in profit only. Howsoever small it may be.

Because it is the conditions which decide the quantum of profit.

Trade accordingly.