Nifty

#137 Nifty Update: Markets Flooded!

Markets were flooded with the news in last 10 days and guess what, this flood was happily accepted by the investors as it was all soooo goood!!! Draghi announcing unlimited bond buying —> German court ruling in favor of ESM—> QE3 by FED —-> FDI in retail. This was the sequence of news which gave confidence to the investors around the world. Technically as i had mentioned in my last post that breakout of the range 5211-5261 will decide the trend further and so was the case. Market made low exactly at 5216 (5211 was downside range brkout) and then broke 5261 on upper side we saw non stop rally to 5650. But as the rule says all the things whether it be news or events or product or technology all has two sides. So is with all of the gud news above. All are wit condition* applied. Taking it one by one 1) Unlimited bond buying is ofcourse a gud thng but it says crisis affect country shld apply for the bailout and such countries have ego problems and thy arent applying for bailout 2) QE3 looks positive but it means printing money whch in return increases inflation over the world and dollar will depreciate against another currencies 4) FDI in retail was cheered by indians bt thy dnt realise tht our brothers and sisters will lose many business in retail. above all the final decision is left to respective state government whether to allow FDI in retail or not. So we can realise tht none of the above gud news are confirmed yet bt chances are tht it wil turn out to be gud. EU nor world wants crisis to unfold so they will save countries by hook or crook. Sentiments amng investors have surely turned positive. Now technically as u can see in above graph market is trending in form of elliot wave principle. A “spin body” formation yesterday with a lower “Doji” today signals some profit booking in the market. As wave four suggest maximum it can come down is 5447 whch in turns fills up the gap too. So strategy on nifty is that we buy for long term whn markets starts sliding below 5500 while short term traders go short with tgt of 5450. NIFTY supports at 5587,5558,5534,5510,5495,5447 resistances at 5632,5658,5676,5701

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