Update for 30th November 2010

  Nifty Futures Face Resistance at 5865 !

In the update for 29th November, we had stated that in the absence of any fresh negative news and the if the Ireland bailout announcement is made as expected, these factors may pave the way for another retest of the 5860 level by the Nifty futures. It was also stated that in case of any fresh break out of adverse news, especially about any market manipulation with the bank borrowings, the downtrend continue for the time being. By Monday morning, there were not much new negative news and the Asian markets were trading mostly flat to positive. The SGX Nifty contracts were indicating a positive open too. As such, the Nifty futures opened some 28 points higher from the last traded price at 5800. This open was at the midpoint of the previously indicated reference levels of 5820 and 5775. The futures immediately traded to the 5820 area and from there, it tried to test the previous day's last traded price as well as the lower reference level of 5775. 

Nifty Futures - Intra-day Chart   

Update for 29th November 2010

  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