Nifty May 2011 Technical Forecast - From May 18
May 17, 2011 - Nifty Closed today at 5438.95 which is down by 5.40% for month to date (compared to Apr 29th 2011 Close of 5749.50).
With reference to my earlier update buckle up for wild swing and steep pullback, I have mentioned that do not trust this rally and in the same way Nifty had steep pullback to 5438.95.
To watch Nifty Index in google finance, visit the following link:
NSE Index in Google Finance
May 18 - 31 Analysis
Look at the following chart: Nifty clearly broke 10 days, 21 days, 50 days and 200 days EMA and closed today at 5438.95. Nifty is having strong support level at 5402.40 set on Aug 31, 2010. If we break it, then we have a minor support level at 5225.80 set on Feb 10, 2011.
I think Nifty will hold 5402.50 level in the short term and based on that we will see one or two big up days in Nifty to confuse the investors. Only if Nifty is touching support level of 4806.75 set on May 25, 2011, then it is safe to buy. Before we reach this level, there will be a wild swing between two directions. But eventually we will end up in testing 4800 level on Nifty down the road.
Only if you are day trader, you have to follow swing strategies. It is ok to 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.
Technical Indicators
10 days EMA: 5539.37
21 days EMA: 5606.37
50 days EMA: 5640.90
200 days EMA: 5645.79
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 5402.40 set on Aug 31 2010
minor support level at 5225.80 set on Feb 10, 2011
strong support level at 4806.75 set on May 25, 2010
strong support level at 4718.00 set on Feb 05, 2010
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