Book Reviews
Life Exclusive
Grandeur of the Lion: Lankan glory

Grandeur of the Lion is Muller’s third book in his series on Sri Lanka’s history. Borrowing...

Premium Content
Monthly Digital Access

Subscribe

Already A Subscriber?
Login
Yearly Digital+Print Access

Subscribe

Moneylife Magazine Subscriber or MSSN member?
Login

Yearly Subscriber Login

Enter the mail id that you want to use & click on Go. We will send you a link to your email for verficiation
Life Exclusive
Inside Apple: How is it the best?

Inside Apple is brief and gripping. It is a must read, especially for students of management,...

Premium Content
Monthly Digital Access

Subscribe

Already A Subscriber?
Login
Yearly Digital+Print Access

Subscribe

Moneylife Magazine Subscriber or MSSN member?
Login

Yearly Subscriber Login

Enter the mail id that you want to use & click on Go. We will send you a link to your email for verficiation
Bulls on the brink of surrender as bears mount pressure

The trend is down and rallies should be used as selling opportunities. The next significant turns (most likely tops) in the markets are likely at the beginning of the 3rd and 4th week of this month

S&P Nifty close: 5,086




Market Trend
Short Term: Down            Medium Term: Sideways        Long Term: Down


The Nifty opened flat and after a meagre rise sold off during the last couple of days of the week (we had envisaged that the markets are likely to turn volatile around 2nd-3rd May). A breach of the crucial support area between 5,135 and 5,154 saw some panic selling during the weekend resulting in the Nifty almost hitting the projected S2 level of the week of 5,068 points. Thus the Nifty ended 123 points lower (-2.34%) as the bears mounted relentless pressure.
The sectoral indices which outperformed were CNX IT (+2.65%) and CNX Pharma (+0.76%) while the gross underperformers were CNX PSU (-5.26%), CNX Infrastructure (-3.69%), CNX PSE (-3.52%), CNX Reality (-3.34%) and CNX Energy (-2.22%). The weekly histogram MACD fell further below the median line which is making things more difficult for the bulls day by day. The volumes were however lower during the fall.

Here are some key levels to watch out for this week

  • As long as the S&P Nifty stays below 5,145 points (pivot) the bears hold the edge even though the intermediate trend is sideways.
  •  Support levels in declines are pegged at 5,012 and 4,936 points.
  •  Resistance levels on the upside are pegged at 5,221 and 5,354 points.

Some Observations
1.    The Nifty is facing stiff resistance in the 5,300-5,340 area which has to be taken out in close for the bears to be shaken.
2.    Weekly averages remained positively phased though marginally implying that the time is very short for the bulls and some desperate action is required on their part to salvage the already desperate situation.
3.    For a very short-term reversal the previous week's high (5,279 points) has to be crossed in close.

Strategy
The bulls have been pushed to the wall as the key support area of 5,135-5,154 points area has been broken. This has to be regained at the earliest if the bulls have to avert a whitewash. Last week the Nifty had completed the 50% retracement level (5,080 points) of the recent rise from 4,531-5,629 points and the 61.8% retracement level is pegged at 4,950 points. These are expected supports and the bulls better ensure that they are not broken otherwise the recent low of 4,531 points will be tested in the weeks/months ahead. The trend is down and rallies should be used as selling opportunities. The next significant turns (most likely tops) in the markets are likely at the beginning of the 3rd and 4th week of this month.

(Vidur Pendharkar works as a consultant technical analyst & chief strategist at www.trend4casting.com)
 

User

We are listening!

Solve the equation and enter in the Captcha field.
  Loading...
Close

To continue


Please
Sign Up or Sign In
with

Email
Close

To continue


Please
Sign Up or Sign In
with

Email

BUY NOW

The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)