Nifty Weekly Forecast Starting Sep 05, 2011 - Amazing last week 6% rally will continue?
Sep 02, 2011 - Nifty Closed today at 5040.0 which is about 292 points up from the last week close of 4747.80 on August 26, 2011. With holiday shortened 3 trading days, the rally is amazing. With reference to last week forecast, I have mentioned that "Market is consolidating at the current levels to make a big rally" which became true this week.
Last Week Analysis - Amazing rally will continue?
Market rallied strongly last week due to the oversold conditions and the strong support level has been tested consistantly.
Last Week Low: 4806.05 (Refer to the strong support level 4800)
Last Week High: 5113.70
Nifty technical levels suggest to "hold/Liquidate" your existing long posistions.
Long term investors need to take break from taking long positions. If you are conservative and if you are on the profit side on your long position, you can liquidate a portion of your long positions and hold cuurency or indian T-Bills. Market will swing in either direction and look for direction this week. The key resistance level for Nifty is 5250 and the key support level for Nifty is 4960 and 4800.
Night might experience a double dip in Indian Market along with world market correction in the long term (about 2 years). With double dip, Nifty is expected to touch 2600 levels set on Oct 2008 and Mar 2009. Wait for some more time to get more clues on "double dip on Nifty"
For Speculators and Intraday Players - Bet on volatility (Option Strangle)
Market is ready for wild swing in either direction. Hedge your positions or use stop loss order.
1. Buy 1X times of (OTM) put options and 1X time of (OTM) call option - known as option strangle.
Note: OTM - means Outside the money.
10 days EMA: 4960.00
21 days EMA: 5061.73
50 days EMA: 5250.72
200 days EMA: 5589.35
Next Resistance Levels:
Resistence level at: 5225.80 set on Feb 10, 2011 and Jun 20, 2011
Resistence level at: 5224.76 - 21 days EMA
Resistence level at: 5378.82 - 50 days EMA
Resistence level at: 5619.16 - 200 days EMA
Next Support Levels:
Minor support level at 4960.00 set by 10 days EMA
Strong support level at 4806.75 set on May 25, 2010
Strong support level at 4718.00 set on Feb 05, 2010
Strong support level at 4003.90 set on Jul 10, 2009
Strong support level at 2620.10 set on Mar 06, 2009 Will reach here with double dip
Strong support level at 2584.00 set on Oct 24, 2008 Will reach here with double dip
Posted on Sep 03, 2011