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Sunday, May 9, 2010

The Nifty Heavy Weights

 Nifty's Biggest Constituents Revisited....!

Readers might remember that this blog had pointed out the doji candle in the monthly chart of the Nifty futures and the not so good performance of the biggies in the last Nifty Heavy Weights post.  We  also opined that a significant correction may be around the corner. As the market in the process of a  significant correction as expected, a revisit to the Nifty heavy weights has become mandatory. 

 Nifty Futures- Monthly Chart


As you can see from the chart, The Nifty futures has broken the April month low of 5162 during the last week. All major international markets are also in the downtrend at present. The 20, 50, 100, and 200 DMAs of the Nifty futures are at 5239, 5198, 5120, 4954 respectively. The Nifty Futures is trading between it's 200 DMA at 4954 and the 100 DMA at 5120.  These two DMAs may give support and resistance to futures in the immediate future. ( Please see the Moving Averages chart in the next post. )

 Nifty Heavy Weights - Weightage, Close & DMAs
Reliance stock is still trading below it's major moving averages even after the favorable judgment in the Reliance - RNRL gas row. LT is also trading below it's major DMAs. The banking and IT bellwethers are comparatively strong as seen from their prices in comparison with their DMAs.

Since the present downtrend has multiple reasons and is spread all around the world, traders and investors may wait for some time to get some clear signals to go long on the market. In the meanwhile, the market may make small rallies as it has fallen too much in too short a time. For example, it has fallen continuously for the past five trading sessions. Therefore it may make some positive closes also shortly.

Cheers and Prosperous Investing !!!   


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