Software & Finance

Nifty Feb 2011 Technical Forecast - Update 2

Feb 14, 2011 - Nifty Closed today at 5456.00 which is down by 0.91% for month to date (compared to Jan 31st 2011 Close of 5505.90). Feb month low was set on Feb 11th intra day at 5177.70 and closed on the same day at 5310.00.

Until Market open of Feb 08, 2011, Nifty was holding its strong support level of 5402.00 that I discussed on my earlier update .

To watch Nifty Index in google finance, visit the following link:

NSE Index in Google Finance

The next strong support level for Nifty would be 4806.75 that would be scary for many investors. As more psychological fear of holding Nifty Support Level of 5402.00, there was panic selling for around 2 days (51 hours - between 9:45 AM on Feb 08, 2011 - 12:06 PM on Feb 10, 2011) in which Nifty set its low point of 5177.70 at 12:06 PM IST which is down by 4.15 % from its support level. Then nifty started rebounding since Friday afternoon and regained its strong support level today once again.

When bottom is being formed always there would be such swing to confuse investors and knock out the novoice investers from the market. Another main reason would be, there are so many day traders would put a stop loss order (around 0.5 - 2 % below the support level of Nifty). Once the stop loss orders getting triggered, then it would create a panic situation in the market. Once the panic which would exist for few hours to couple of days, again the index would regain its support level.

Nifty is closed today well above its strong support level. Now the next test for Nifty would be to touch 200 days EMA of 5632.528.

For long term investors, once Nifty gains 200 days EMA, then it would be ideal for people start liquidating their position gradually.

I have already mentioned that I am bearish on Nifty on the long term view, even my short term looks bull sign.

Technical Indicators

10 days EMA: 5392.737
21 days EMA: 5505.227
50 days EMA: 5684.858
200 days EMA: 5632.528

Next Resistance Levels:

200 days EMA: 5632.528
50 days EMA: 5684.858

Next Support Levels:

strong support level at 5402.40 set on Aug 31 2010
strong support level at 4806.75 set on May 25, 2010
strong support level at 4718.00 set on Feb 05, 2010

Posted on Jan 31, 2011