Sunday, September 28, 2008

Another Day, Another Week

I was in Chandigarh for a presentation at the CNBC Investor Camp. I did have access to broadband as well as my laptop but could not get the time to write the blog.

Friday saw the Nifty move below 4070 thus cancelling any possible buy signal. The trend remains down. The Nifty has recorded its lowest weekly close since the bear market began. This is not a sign of bullishness. There were some signs of possible support, but finally this did not happen, so we wait for Another Day, Another Week.

The Trend is down in all time frames. The primary trend remains down - this is a bear market. The intermediate trend is also down, so is the minor trend.

When will this change ? A close above 4150 will be a sign that the minor trend is now up. This level will change over time.

If the Nifty continues its decline, there is support at 3800. This support has held twice earlier, but may not hold again - meaning, a sharp decline is possible if 3800 breaks. In fact there is a vacuum between 3800 and 2000 - the next significant support. This does not mean that the Nifty will go down to 2000. My point is: there is an absence of reliable technical support below 3800 therefore the Nifty will have to find its own support. This may be anywhere - 3600, 3300 or whatever else you like.

How do you trade ? All analysis must lead to actionable ideas. For swing traders, a close above 4150 is a buy signal. Buying is also possible if the Nfity were to close above the previous day's high. While the markets could continue going down, short selling is a bit of a risk as the Nifty has already seen four lower close in the last five days.

1 comment:

jskservices said...

Mr Sukhani I was at your NOIDA camp, thats how I got hooked to your blog. So whats the investor mood you saw at Chdgarh.
With the bailout package and the nuclear deal, I think the trend - very short term if say so, shud be bullish. Whats yr take. And after the bailout what triggers do you see for the mkt.