Dear Investors
Markets closed with a marginal gains after testing higher levels ,which were used by traders to book profit and bears to create new ‘shorts’ Nifty is not sustaining even small up moves, indicating that the market sentiment is very weak., Yesterday it was ‘Egypt’ today it was ‘Raja’s’ arrest which caused up move to get aborted. Market sentiment is so bad that even a small news is enough to cause deep falls.
What Next
Market has closed below 5DMA, 50DMA and 200 DMA, indicating a near term down turn is confirmed. Unless 200DMA is taken out on closing basis market will not recover. All the bounces will be used by ‘Bears’ to create new shorts .Watch the level of 5520/5576 for some indication of ‘halting’ of the down move, if not break below 5401,will be a start of the new down wave, which will take markets to 5200.
Technical view
PIVOT FOR NIFTY: 5445
R1 (First resistance) IS @ 5476
R2 (Second resistance) is @5520
R3 (Third resistance) is @5551
Significance
Nifty may test R3 on a good news or fresh short covering but for a confirmation of ‘The end of on going correction’ can be given by a close above 200DMA 5626, till that time the bounce backs should be utilized to book profits or create shorts
S1 (First support) is @ 5401
S2 (Second support) is @ 5370
S3 (Third support) is @5326
Significance
Supports are getting lower and lower indicating markets are not sustaining even minor ‘Bounces’. All the up moves are getting sold or used to create ‘short’ positions
S3 will be the last support for market to bounce back to test higher levels , Breaking of 5326 will not be
good for short term trend.
NIFTY MOVES IN LAST WEEK
DATE | HIGH | LOW | CLOSE | |
24thJAN. | 5756 | 5697 | 5743 | 5732 |
25 th JAN. | 5801 | 5680 | 5687 | 5722 |
27th JAN. | 5726 | 5594 | 5604 | 5641 |
28 th JAN. | 5614 | 5459 | 5512 | 5528 |
31stJAN. | 5526 | 5416 | 5505 | 5482 |
1st FEB | 5539 | 5402 | 5415 | 5452 |
2nd FEB | 5490 | 5415 | 5432 | 5445 |
The observation suggests that Nifty is going through 'Lower Tops
And Lower Bottoms' with Pivotal levels coming down, indicating a ‘Bearish Trend’
COMMENTS
Investors are advised not to take short or long term ‘Long ’Positions.
Day traders should book profits with small gains while ‘Short Sellars’ have enough margin to wait to cover their shorts’ Every rise up to 5624 should be used to ‘Exit longs’ or Create Shorts’
Impression
Market is not able to sustain higher levels ,
We are heading towards new lows in near term, 5200 Stock specific
No calls
Thanks
Dr. Vasant Bele
These are personal views, please consult experts before investing
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