Wednesday, May 16, 2012

Can the Nifty decline to 4500?

In December 11, the Nifty fell to 4531. A remarkable rally started which took the Index to 5630 before a decline has taken the Index down to 4858. This is the story, so far.

The Nifty has been exhibiting strong momentum on the downside. Given this momentum, and, the complete absence of buyers, it is possible that the Nifty may slide down to the earlier low of 4531?

Readers should know that such questions do not have any 'yes' or 'no' answers. There remains a strong probability that the Nifty may go down to test the earlier lows. Thus, traders should be mentally prepared to see the Nifty go down towards 4530. Maybe this will not happen, but, then again, it may. So, be prepared, strengthen yourself psychologically for this event.

4 comments:

Balu said...

Sir

It's simple sir. Jan, feb rally might have been a false one. If that is so the only option left is breach of 4530 and older targets flash in traders' minds.

Balu

Naran said...

Nifty rallied 1100 points without any technical or fundamental reasons. Only the reason is that liquidity. Now Nifty resuming previous down trend. I think previous low (4530)is only a support and it can brake. I think major support for nifty is around 4200 level.

Rushabh Shastri said...

I personally feel ...at Rs. 300 tata motor people fear to short and now...they want to short it...the same may happen to ASIAN PAINT now...be cautious on long side...

Khush said...

I agree with Naran. The earlier downtrend of the nifty gave a target of 4200. But the question is does the same target hold true even after the pattern is broken? This we can know only after a few weeks and the markets will tell us. And as Sudkhani Sir always emphasises, its better to stay with the momentum. S/R levels are meant to be broken.