Software & Finance

Nifty May 2011 Technical Forecast - Buckle up for wild swing and steep pull back

Apr 29, 2011 - Nifty Closed today at 5749.50 which is down by 1.44% for month to date (compared to Mar 31st 2011 Close of 5833.75).

With reference to my earlier update , I have mentioned that do not trust this rally because we might have seen the top or in the topping process and it is scary to go long on Nifty.

As expteced Nifty was trading in a range bound between 5710 and 5940 and closed 1.44% down for the month. As of now based on trading in April, makes me to think that Nifty has already formed the top and it is ready for free fall any time. However always there would be a retesting point and consistently market will make a wild swing to confuse the novice investers. Currently I am very bearish on Nifty in the long term point of view. We may occasional upward correction happening down the road.

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

NSE Index in Google Finance

May 2011 Analysis

Now Nifty technical indicators are suggesting tha t market will retest its 200 days EMA of 5635.43. Once we reached 200 days EMA, there would be some technical buying which would be there for a day or two. Then again Nifty is vulnerable for sudden debacle in the coming weeks. if you are a conservative investor, then it would be excellent time to liquidtate your position.

Only if you are day trader, you have to follow swing strategies. Otherwise bet on the volatility by betting either side (long and short) on the market.

If you are a long term risky player in the market, then you can initiate short position and accumulate short position gradually in the coming weeks. You can not expect return in the short term.

If you are a long term conservative investors, then you have to switch your investment strategy and move on the Fixed Income Securities - Govt. Bonds, Fixed Deposit, etc.

Nifty is good to STRONG BUY for conservative investors only it encounters a deep correction which I expect it to go all the way down to 4800 which was set on Feb and May 2010.

Now buckle up and watch for a wild swing in the market.

Technical Indicators

10 days EMA: 5826.80
21 days EMA: 5784.99
50 days EMA: 5708.98
200 days EMA: 5635.43

Next Resistance Levels:

strong resistance level at: 6,181.00 - Double Top (Around 350 points up from today's close) set on Jan 4, 2011 strong resistance level at: 6,338.50 - Double Top (Around 500 points up from today's close) set on Nov 5, 2010.

Next Support Levels:

strong support level at 5708.98 (50 days EMA)
strong support level at 5635.43 (200 days EMA
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 May 01, 2011