Sunday, June 8, 2008
Nifty Analysis on June 8
First my apologies for posting so late (I had promised to post yesterday).
As you all know, markets have been showing weakness most of the time and even a small attempt of recovery is getting sold. The current trend is definitely down since Jan this year.
Following is my analysis for Nifty based on trading till 6th June:
We have seen Nifty breaking some imp levels last week. We see it going to sub 4600 level, which was an important level for many traders.
In the attached chart, I have drawn several trend lines, some of which you are already familiar, and two new lines. Line 1 is the major downtrend line starting from Jan top. Line 2 is another downtrend line which I drew from the Feb intermediate top (4th Feb) joining the top of 27th Feb. Line 3 is the well known last uptrend line, Line 4 is the current downtrend line and Line 5 is the support line joining the Jan low and Mar low.
Line 1 is holding there as the final frontier for bulls, which seems far far away now. Line 2 when extended has proved to be the resistance on 6th Jun, as we see Nifty touching it and falling from there.
Now, the case is there for bulls only when they can conquer the current downtrend line - Line4, which comes to around 4790-4800 mark for tomorrow. Also, it needs to go above the Line 2 which comes at around 4740-50. Interestingly, the two lines cross at around 4720, which should become a big resistance area for next 2-3 day
According to some good analysts, the final support line should be - Line 5, which is formed by joining the Jan low and Mar low. It comes at around 4500 for next few days. So looking at it, it looks like there is going to be fierce battle between bulls and bears near that level. Bulls will lose all hopes if that is broken. The fear factor for tomorrow is - Global Markets. The only thing that was not affecting Nifty too much for some time. In most probability, tomorrow can be a big day for bears.
I conclude my analysis here and hope you will reply with your valuable comments.
My analysis is just analysis in letter and spirit and not a trading recommendation. Trading in stock markets is full of risks and please consult professional advice before doing on a trade.
Thanks & Best Regards