Software & Finance

Nifty Mar 2011 Technical Forecast

Feb 28, 2011 - Nifty Closed today at 5333.25 which is down by 3.135% 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.

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 closed today 5333.25 which is unforunately below its 10 and 21 days EMA. However Nifty was trading between its 21 days and 50 days EMA until wednesday Feb 23, 2011. The last 3 trading session of Feb 2011, it did break its technical support level. But still I do not think Nifty will have free fall to its strong support level of 4806.75 set on May 25, 2010.

In March 2011 also, Nifty will have a range bound trading and looking for direction. I think it will try to retest its 200 day EMA of 5568.10 at least once before it makes a stronger move on either direction. I expect Nifty will have a room to rally upto 5583.00 which would be 250 points more from the close of Feb 28, 2011.

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: 5382.62
21 days EMA: 5450.18
50 days EMA: 5612.62
200 days EMA: 5568.10

Next Resistance Levels:

200 days EMA: 5568.10
50 days EMA: 5612.62

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 onĀ Feb 28, 2011