Friday, July 1, 2011

Nifty Outlook For 4th July to 8th July 2011

Nifty opened with a significant gap-up towards 5690 levels and then came down; the volumes were relatively low and hence after an initial sell-off, the session was pretty flat

2 interesting points observed in today's trade

1 - The 5690 level posed a significant resistance for Nifty to go above it and close; this means that there will have to be volumes, momentum to make a positive crossover after which the next critical resistance comes at 5740 levels
Only 2 consecutive closes above 5740 can further bolster the bull story and even 2 flat sessions with EOD above 5740 will give a further 144-216 points increase on the upside from 5740

2 - While we now have 6 consecutive closes above 5408, we also have had 2 consecutive closes above 5608 which is also a very important point

Today's open was clearly designed to trap shorts that were rolled over yesterday by retail traders and HNIs
As I mentioned yesterday as well, 5408 seems to be the bottom right now until 23rd July 2011; however, greater the number of closes above 5408-5532-5608, the higher the probability of Nifty marching higher in the next 144 days; [Nifty has a pending target of 6800 for 2011] and this will come within 162 days from the day we closed at 5196**

**If Nifty does not close below 5408 until 10th August 2011, then we can conclude that the retest of 5177 was completed in June series with the brief visit to 5196. [if the retest of 5177 indeed comes in, then Nifty will hit 6800 162 days from retest of 5177]

A visit to 5532 is certainly due next week and one can safely short Nifty at any value above 5608 and hold the position until 8th July. I would be very surprised to see if 5408 is not tested again. Enjoy a profitable week ahead and use Sell on Rise strategy for next week as there is a bumpy ride down waiting for Nifty

1 comment:

JEEVAN said...

Thank you Nagaraj ji

You are 100% correct that todays gap up opening is a trap to shorts..

Good luck..