'CLIFF HANG' (a suspenseful situation)

Dear Investors

On 27^th Nifty opened on a flat note without much gains even though it was an expiry. As trading advanced, Nifty could not maintain the morning levels and drifted down to the important support level at 5600, there was heavy selling and rollovers were not much.After trading at lower levels for entire day, Nifty closed just above crucial support of 5600 (5604) which was S2 (5601) for the day, indicating a ‘CLIF HANG’ situation for the markets.

What Next?

Nothing but ‘CLIFFHANG’ situation at the crucial level of 5600, Nifty has broken 200DMA after 4 months , which is not a good sign for bulls. Any close below 5580 will definitely be a bearish sign and Bulls should start preparing to withdraw the remaining positions.  Markets are in an undecided territory, and can move in any direction at any given time … But the  ‘Ground Reality’, at Domestic Macro and Micro levels, F&O carry forwards, indicate a ‘DOWN TREND’ to the level

Of, 5580/5515/5424 levels, in coming days. . On upper levels Nifty may bounce to the levels of 5700/5777 with some bottom fishing and short covering , but beyond that the SITUATION  IS NOT CONDUCIVE FOR ‘BULLS’

Technical View

Nifty Pivot:  5641

R1 (First Resistance level) is @ 5688

R2 (Second resistance level) is @5773

R3 (Third resistance level) is @ 5820

Significance

Bulls should watch for Nifty levels of 5640/5688(R1) any move towards it should be treated as a ‘Dead Cat Bounce’ and not as a reversal of short term trend. One can create shorts at these levels to be covered if Nifty close above 5770/5773 levels. Trend still will be down in short term, till Nifty gets pass 5820/5880

S1 (First support level) is @ 5556

S2 (Second support level) is @ 5509

S3 (Third support level) is 2 5424

Significance

Persistent testing of anything below 5580 will be the first indication of the ‘Bears’ getting on top, and short term trending getting changed to ‘Down’ Next levels which ‘Bulls’ should watch are 5556/5509 any thing below that on closing basis  will test 5420/5380/5330 ON DOWNSIDE.

DMAs(Moving Averages)

5DMA@5689
20DMA@5844
50DMA@5899
200DMA@5620

Significance

For bulls to be encouraged Nifty has to close above 5844 otherwise the support for ‘Bull Trend’ is at 5620 (200DMA) below which there are hardly any hopes to expect up ward move

CONCLUSION

Breaking of 200DMA and 5600 support on which market was in ‘Suspended Situation’

Has given a clear indication that we are in a ‘SHORT TERM’ ‘Down trend’ Traders are advised not to take any positions for short term , while Investors should start doing ‘Homework ‘ for their long term strategies to be executed in next ‘Panic’ Bears can go short at any bounces to be covered at 5880 .

 WAIT DO NOT JUMP, WATERS ARE SHALLOW   

Stock Specific

No calls today

Thanks

Dr. Vasant Bele

All are my personal views, invest after consulting the experts