Nifty update

In the last post, we published monthly, weekly & daily outlook on nifty. In the daily outlook, we had mentioned 7200 level could act as a strong support & one could go long around 7240 with a stop of 7190. Nifty  made a low of 7239 & raced to 7592 finally to close at 7583 giving a profit of almost 350 points.

Although nifty is touch short of 7600, it still looks to be strong. Look at the  increased volume activity in the recent trading sessions. It is indicating definite strength in the index. So we recommend to hold on to the long positions with a stop of 7440.

Possible flag breakout in Bhartiartel

The chart above shows daily movement of Bhartiartel. The stock made a significant low of 281.9 Feb 24 & Mar 5 respectively. The stock risen 25% since then. For the month of May the range for the stock has been 305 to 350. But in last 8 days the stock has been in range of 20 points making a flag pattern on daily charts. However the stock looks to be breaking out the the flag in the upward direction. So I recommend to buy the stock above 350 for tragets of 370 & 385 with a stop 335.

Nifty update

In this post, I am trying to give long term , medium term & short term outlook based on my technical study of Nifty.
  

The above chart shows monthly movement of the index for last 10 years. We can clearly see & know as well that nifty had  a terrific bull run from 2003 to 2007. During this period investors wealth was raised  at least 6 times.

Then followed a year of sharp correction in 2008 & recover to earlier highs in the year 2009 & 2010. Since the the index was in big sideways trend going down to 4500 in Dec 2011 & rising up to 6400 in Dec 2013. But the index could not break the previous high or lows significantly.   So the entire movement from 2008 to 2013 can be considered as a sideways trend.

However Since Feb 14, nifty has risen sharply to make new significant all time high of 7563 which is almost 20% above the previous all time high of 6415. So I want want to state here that nifty has broken out of sideways trend upwards & started the bull run again. Besides price, there are other evidences to support this study. Break out should be supported with higher volumes near resistance zone. We saw strong price movement with volume support from Feb to early April & low volume activity during consolidation in next 15 days. In short Strong up day have been big volume days & consolidation or strong down days have been low or average volume days in last 6 months. signalling buying interest of investors. However good break out should also be followed up by significant pull back to the support zone. In the case of nifty 6350 to 6500 is a good support zone. So recommend parking your money for valuable gains around 6500.

 

Weekly chart above signals some correction due after a strong up move. 7200 could act as a short or medium term support. But break below 7200 on closing basis can lead nifty to short term support of 7050 or medium term support of 6850.    

 

The daily chart above also shows nifty in a overbought zone & due for correction. Break of 7200 on closing basis should take nifty to 7050 in the next week itself. However as the trend is still up, buyers can initiate long positions around 7240 keeping stop of 7190.