Weekend Views On Nifty!!!

What a week that went by, full of misery and sorrow for some and full of hope and opportunities for others…it’s just the way we look at things, nevertheless a very challenging week from the point of view of the Technical Analyst. A week where the market humbled all and sundry, a week where all the attempts to alter its direction (news on Interest Rates, Short Sales Ban etc!), were thwarted by a more vicious slide. This was the message that Markets are supreme and any attempts to interfere with the free functioning of it are not welcome. Price action as they say is the universal TRUTH and shall remain so till Kingdome come.

The Weekly Picture;

The chart above of Nifty shows that we have now retraced more than 61.8% of our primary Bull Run starting from early 2003 to our peak on January 2008. I am nowadays even scared to guess the supports (every time I tried it in last week it was a humbling experience), but what the heck I need to do what I am learning2do (yeah still tryin2b a trader), so coming back to supports, the only hope in this abyss is at 2300/2250 and then 2000. Where as any up move now will be severely tested at 2650/2850 and 3000.

The Daily Drama;

The daily chart above isn’t much different from the weekly, we are below our channel, and the MACD is at abysmally levels. The closest moving average; the 20 periods is far far away. We need to stall here for the MA to catch up with the price. The only solace (Hope! Remember the buzzword!) , that the ADX is again above 50. The last time it was at those levels (see the shaded areas on the chart) we paused and broke the fall and even had ourselves a pretty good pullback rally! History repeats itself…well I didn’t write this…wishful thinking…why not!

The Hourly Break;

The hourly chart above is waiting for the confirmation of the lower low. No signal from the MACD, this is the only timeframe where we seem to be at least reaching out to the 20 periods MA only to be spurned by it. If the lows hold then the hourly chart is giving a HOPE of 2650 and 2700 for starters. Again no supports visible here too!

Incidentally we have the festival Diwali on Tuesday and the events in the markets in the last few days have left a bad taste for most of the people. The mood is a bit somber but the SPIRIT to celebrate prevails. Let’s look at the positive side of all this capitulation (as some prefer to call it), the price at what some of the real good scrips are available is nothing short of what we otherwise would have called as THE GREAT DIWALI SALE!!! Yes if you have funds to invest with good holding period this is the time to buy in tranches. Remember the legendary Warren Buffet also suggest buy when you see good companies at .50 of their book value, well many are quoting at those values now.

Wishing You All A very Happy And Prosperous Diwali And May God Bless Us All!!!

Nothing in the world can take the place of persistence. Talent will not: nothing is more common than un-rewarded talent. Education will not: the world is full of educated failures. Persistence is omnipotent...Calvin Coolidge