Dated :- 11. 01. 2015

                                                                  NIFTY SPOT : 8284.5

Hi,

Readers,

Nifty moved exactly as was mentioned in my previous blog dated Jan 05, 2015. Wherein it was mentioned to book full profit from all the long positions in Nifty as momentum was fading and readers were alerted that Bank Nifty and Global markets are ready for correction.

Same happened Nifty and Bank Nifty and Global Markets collapsed on Jan 06, 2015 when Nifty was down more than 250 points and bank Nifty was down around 600 points in a single day. Nifty Registering biggest fall in 5 years in a single day.

Now What :-

Nifty is playing in gaps these days. Interesting thing is that on Jan 06, 2015 it gave a big gap down opening and kept falling throughout the day. That gap down was bearish and indicated that lower level are possible. And contrary to that gap down Nifty on Jan 08, 2015 gave a gap up opening and somehow maintained the gap indicating that bulls want to fight.

Now there is a tussle happening in market between bulls and bears.

And as I always say that :-

“ Jab 2 Hathi Lad Rahen Ho To Side Mein Baith Kar Dekna He Achha”.

i.e. when two elephants are fighting then it is always better to sit on the sidelines and wait.

Looking at overall picture :-

Looking at overall picture of charts one thing is certain that Nifty does not have too much up side left from here. It can only and only be big news event which can propel short covering and take Nifty to higher levels. If only the charts are allowed to have their say than it is just the matter of time and levels when Nifty will start correcting again. On monthly charts Nifty has made bearish engulfing pattern and on weekly charts also the up move is in danger. Looking at Bank Nifty Weekly, monthly and quarterly charts are saying that upside is capped and correction is imminent.

But, as a technical analyst one has to further fine tune the analysis and narrow it down to levels, that, when the move on one side shall happen.

For that see chart attached also.

 Nifty has major resistance at 8360 which is also the gap down level and support at 8150 which is also the gap made on up side.

i.e. Below 8150 it will be fresh breakdown which will ensure that lower levels are coming and money can be made by short selling below 8150.

On the other side 8360 is good resistance above which short covering will happen and in that case 8450 to 8500 levels cannot be ruled out for once.

Thus we can say that Nifty is in a range of 8150 to 8360. Further narrowing the range we have the levels of 8200 on the down side which is again major support level coming out from various indicators also and may even prove to be much important support level than 8150 even. This 8200 level has confluence of many indicators to support itself, that, even one can take a decision for once to avoid short selling till Nifty is closing above 8200.  And 8305 is the level close above it will be the first indication that Bulls want to survive and does not want to give cake walk to bears.    

   

Strategy is to wait and watch the levels mentioned above and have patience. Till then only play for small points.

Chart Showing Gap up & Gap Down