Update for 30th May 2011

   Has Some More Strength left in the Latest Bounce  ?

• As indicated in the previous post, Nifty future has bounced from expected support of the 5350 - 5400 area, albeit after a mild crack. 
• This area had recent supports from both technical and fundamental points of view.
• Now the question is whether the bounce has the fire power to rally more ! In the last post, it was mentioned that since the bounce came from the supports, it may try to test the middle area of the old trading channel. 
• Now, let's continue the scenario analysis  with the help of various charts, data and the Momentum Signal.    

 Nifty Futures - Intra-day Chart     

     Nifty Futures  - Daily Chart  

S&P CNX Nifty Index - Weekly Chart

Update for 27th May 2011

   Nifty Futures In the Green !

Nifty future has bounced back from the previously indicated support zone of 5350 - 5400, though the lower end of the zone was  slightly broken on last Wednesday. Although it was indicated in the previous post that some of the stocks would be coming under negative pressure from the derivative expiry and therefore, the expiry would be near the strike of 5300, it was not be. This guess was made due to new selling seen in in the money (ITM) 5300 call options on last Wednesday. However, massive covering of ITM 5300 calls were seen during the trading of Thursday, right from the beginning, invalidating the previous guess.

Now the important question is whether the present bounce is a change of trend or not. At present it is difficult to predict, except for accepting the facts of the reasonable support of the 5350 - 5400 base and also the support of the lower boundary of the old trading channel. Moreover, trailing valuations are also at around the one and a half year lows. Therefore a rally to the middle of the  trading channel can not be ruled out at present. Anyway lets see what the Momentum Signal indicates in the next few days !

Nifty Futures - Intra-day Chart    

    Nifty Futures  - Daily Chart