Nifty Update - as on 12th January 2009.
My worst fear has come true. Nifty has Moved below the 2800 level without any difficulty in the early part of the trade. nifty moved towards 2750 and there after bulls have tried to move it over 2800 again in the afternoon but failed to do so and from afternoon onwards nifty has drifted lower and made a low of the day and finally closed near the low of the day at 2773. one point to be noted is that this is the third consecutive lower close and nifty has closed at lowest point in the last four weeks and any move below 2700 will result in nifty moving towards five weeks low. As nifty did not find any resistance at 2800 level we have chances of nifty moving towards 2570 and 2503 in the comming weeks. Now also 2800 becomes a very good resistance level for nifty to conquer. The 20 day moving average is at 2950. Any movement of nifty above it should be taken as an opportunity to close your shorts and go long. As per my weekly update it appears that the triangle option is negated and at 3147 we might have completed flat there by completing the wave-4 and we might have started the wave-5 which has all the chances of moving at-least towards 2503 and if broken then towards 2223 its oct 08 low.
Another point to be noted is that the Directional Momentum Index has started to move up after bearish crossover and from lower levels indicating that bears are just gaining upper hand. In comming one to two days we might see bulls trying to make a come back after which the market might again drift down wards. So for the time being it appears the bears are gaining upper hand.
M.Sri Mahidar
January 12, 2009 8:35:10 PM IST