Tuesday, September 16, 2014

Nifty Cracks 8000 - What Next?

Well the fall from 8180 has been sudden and there is a lot of blood bath on the tickers.

This is my take away on the basis of charts for the next 10 weeks. On a daily level, how the trade will pan out is almost difficult to chalk out but the overall path IMHO goes this way

For safe traders who missed the boat last month. 7950 levels is a low risk entry point and the next one will be around 7825 levels.

Regardless of what the media says, this is a technical correction and a very healthy one. Unless Nifty closes below 7800 [especially on a weekly basis] current levels seem extremely tempting to go long.

Options won't be a good bet due to the uncertain paths on daily basis. Cash or futures will be a good bet. At current levels, 1 lot on Nifty futures will lose at the most 150 points [7500] per lot and when averaged at 7825 [if it comes] another 25 points taking the overall risk in 2 lots Nifty futures to 8500

Initial upside is 8180 followed by 8400 levels i.e. 300-350 points per lot on upside. Very few times, such low risk high reward plays come into the picture.

Corresponding support on BankNifty would be around 15700-15800 levels from where another attempt at 16500 can be expected.

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