Friday, May 27, 2011

Some relief as a rally

Throughout this week, my own analysis has been to expect a short term low in the Nifty. This is what I have said in the morning analysis on TV - ET Now. It appears that my perception was more or less correct. I expected support between 5400 and 5350. The Nifty did slide down a bit below 5350 to 5328, but this slide was momentary. The 5350 - 5400 zone did provide support.

The importance of context (as discussed in the previous post) is visible. Nifty has fallen, almost as a striaght line from 5950 to 5350. All markets correct. In Feb-March of this year, the 5350 - 5500 zone provided a lot of support for the decline from 6350. It seems reasonable that the same levels will provide at least short term support. Because the Nifty was oversold, it also seems fair to expect not just support but also a rally to correct the decline.

This analysis provides a view on the market. Actual trading is done with the charts. Buying is done when my setups trigger a buy.

1 comment:

Sandeep Nakum said...

Sir, can you explain your chart setup?

Thank You.