Will the Market Hold on to the Support of 100 DMA ?
The Indian stock market is in an intermediate term downtrend. This is a fact because many popular stocks were already declining even before the start of the present downtrend. The pace and magnitude of the selling and the bunched explosion of negative news were beyond the expectations of most investors. We had indicated in the post dated 13th November that the market may get support at the 100 DMA at around the 5750 levels, even though we were unaware of any reasons for the continuation of the down trend at that time. However, it was stated that the downtrend may continue for some unknown reasons. Last Friday's sell off in the first half even seemed to indicate that there are no reason for the stocks to trend upwards. However, any uptrend can be confirmed only when the market starts to form higher lows and higher highs in the first step and then, the low stays.
Nifty Futures - Intra-day Chart
Friday's intra-day chart of Nifty futures is marked with the important reference levels indicated in the post dated 26th November, 2010. Nifty futures opened between the 5820 and 5860 reference points. The initial test upwards ended just above the 5860 level and the sell off from there, traded through the 5820 level to
