Tuesday, May 15, 2012

Nifty remains in a down trend

I turned bearish when the Nifty broke below 5300. A pattern target for the decline was given at 5050. Since then, the Nifty has touched 5050, and fallen more, currently trading at 4900.

The trend is down. Traders MUST trade with the trend. The bigger picture for the Nifty remains difficult for the bulls. The up move from 4500 to 5630 had a 61.8% retracement at 4950. That support has broken down. Once we see a trend retracing by more than 61.8%, doubts arise if the retracement is a pullback or it is a new move.

So far, the downside momentum is strong. Except for one day, the day to day trading has been dominated by sellers. I will not call them bears because we do not know if the sellers were exiting or creating short positions. But, they have been selling.

How will the down trend end? The Nifty will find support, then chop around the support level, then test the support. After a successful test, the markets will begin to rally on some days. This will create bullish reversal patterns. All of this will take time. And, remember, it has not even started.

Can the Nifty fall to 4500 or even 4000?

Well, yes. This is a market. Anything can happen here. I am not looking at downside targets, as of now. Just following the momentum, which remains down.

Have Fun!



1 comment:

bkmmodi said...

Good Morning,
I have observed you write late at night and today so early in the morning.
This time & trend is simply yours, day I remember from 4700 upwards you were bullish and now 5300 downwards your bearish.
You have caught the trend like a bull's eye. Exceptional catching of trend of the market.
In december also you were saying nifty may goto 4400,4200 and even below 4000.
But you changed that if 4700 is broken upside the reversal takes place!!!!! Alas it happened , and no doubt Udayan has kept you on the TOP spot for your calibre, talent and as he is neutral in comments, as you are neutral about market going with the wind (TREND).
I have learnt a lot from your following and blog etc.
My aim is to meet you personally one day to salute.
Till 5-6 years back my knowledge in sharemarket was " if I want to sell or buy a stock and there are no buyer or seller????"
bharat modi