Detailed Nifty Analysis 7 Feb 11

At higher levels, only few people remember that gravity still exists. At 6000 zone, we were the only one to openly make this view that long term target is HIT. When targets hit, book profit, and not wait for miracles.

Remember “Do not sow when it’s the time to reap”?This was posted on Nifty View page on Facebook at 6300.

Though we were skeptical since 6300, this nifty view said it all. See yourself!

So in short:

Bearish at 6354 in 2007 for 4400 tgt.Bullish at 3000 Nifty for 6000+Bearish/Skeptical at 6300 this time.5800, 5500 and counting.

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Nifty Medium Term

Technical Observations

Nifty looks probable for a pullback, primarily because of 2 factors:1.Index is trading near to its longer term channel, the support of which exists at 5500 zone.2.Index has made a big straight fall in last few sessions and it is therefore probable that it does a pullback to atleast complete the short term channel.3.Overall on the longer term channel, it is the completion of 2 consecutive waves (wave count 4) and a 3rd set of waves is very much possible.

There are few hindrances in the upward movement:1.The support 5500 is punctured. Now even if index makes a patchwork by a U V or W, the pullback will loose steam through the puncture.2.5500 which acted as a support, might now become a resistance. (5555)

Other Observations

1.FII looks desperate to trim down substantially, but the public is wise this time.2.There is a typical confusion seen between the “major players” to buy or to sell.3.The major players are not working in unison towards a goal.4.Inflation is like a time bomb. When “they” will want to crash the market, they will cry onions.5.World economy is going through the hangover of steroids aka “packages”. The infused capital by US, UK et al will at a point finish off and economy has to start producing on its own to sustain.

What to do?

Prepare to trade long. Since Nifty is below support, it MAY take a support at any levels like 4800 4400 3000, who knows? Who knows who will come up with a new scandal. The resistance in Nifty (FUT) is around 5555, which if and when breaks, should amount to a pullback of 5900 zone and if the buying gets good, it may even see 6700. On the other side, it would be a wise idea to exit deliveries that you created since an year or 2 on rises.

Still experimenting on your money?

Are you still experimenting with your money? After sad demise of Realty, Infra, Telecom, Metals, now even banks have drowned.

What to do?Seek a professional’s advice.