Update for 2nd February 2011

    Nifty Futures Approaching the Interim Support of 5350 !

• Following the intra-day bounce on Monday, Nifty futures opened slightly higher at 5542 on Tuesday.
• However, sellers emerged right from the opening bell and the selling  lead to the Nifty futures falling to the previous day's lows in the morning session.
• The losses were widespread and some of the better stocks too joined the bear bandwagon on Tuesday possibly indicating institutional selling.
• Nifty Futures kept on trading around the 5450 reference area for some time in the middle session, but another bout of selling in the afternoon session lead to a new daily low and a close near the low.

Nifty Futures - Intra-day Chart  

• Nifty and the major indices have lost continuously for the past five trading sessions by now.
• Even if the market is poised to go down further, markets do not fall continuously for more than five to six days in normal cases.
• As such, it seems that the market is poised for a bounce and a positive close, at least for a single trading day.

Update for 1st February 2011

    Nifty Futures Bounces from Lows, But What Now ?

• The sell signal indicated by the Momentum Signal at 5630 in the current month Nifty futures on last Thursday has lead to a favourable excursion of 190 points or profits.
• As indicated in the previous post, Nifty futures bounced from the 5450 minor support area.
• In tandem with the SGX Nifty contracts, Nifty futures opened lower on Monday with a gap.
• A large gap like 60 points from the last traded price may force the market to recover and fill the gap.
• Therefore, some bouts of short covering occurred during the day. 
• The last two day's intra-day recoveries have almost the same highs at 5545.
• The level of 5550 was the starting point for the upward breakout towards the all time highs in September.

Nifty Futures - Intra-day Chart 

• Therefore, the level of 5550 may become a reference level for the purpose of intra-day analysis and trading.
• The higher resistance above 5550 is at 5630 coinciding with the 200 DMA.