Software & Finance

Nifty Weekly Forecast From Dec 19, 2011 - Play Safe - No more short positions on Nifty (Expected Trading Range: 4500 - 4873)

Dec 16, 2011 - Nifty closed today at 4651.60 which is about 215 points down from (4.42%) from the last week close of 4866.70 on Dec 09, 2011. Nifty was trading between 4628.20 and 4910.25 which is about the swing of 282 points.

As I mentioned in the last week forecast - trading range of 4600 - 5015 became very accurate as the last week low of 4628.20


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

NSE Index in Google Finance

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

NSE Index in Yahoo Finance

Last Week Analysis - Selling continued with Euro Zone volatility

Nifty was down by 4.42% in the last week. Selling pressure and volatilty is related with Euro zone news.

Go long on Indian T-Bills and INR. With respect to US long term treasury prices, TLT closed today at 122.34 which a gain of 4.81% for the week compared to last week close of 116.73. US treasury is getting very close to create short position. US treasuries (Ticker: TLT) would bottom near 100 - 103 and TLT is currently a good short position, upside very much limited but the downside is huge.


Note: US Interest Rate Bottom is currently happening, it may test the bottom in the coming week.


Last Week Low: 4628.20
Last Week High: 4910.25


Nifty technical levels clearly suggest that liquidate your short positions now. Because Nifty has got strong support level of 4600 and 4000. It is very much unlikely Nifty will go down below 4000 in the short run. There are so many investors waiting to take long poistions on Nifty.


Note: Nifty is risky to short now, even though the next downside target for Nifty below 4500 and 4000. If you have any short positions on Nifty, it is good time to liquidate and keep them as cash. If you want to take long positions on Nifty, You can wait for couple of weeks to see the market trend. If Nifty started moving below 4500, then gradually accumulate your long positions with a ladder of orders.

If you are conservative investors, hold currency or indian T-Bills. You can take long positions on Nifty between 4000 and 4500. Nifty 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

1. Buy 1X OTM put option and 1X OTM call option.

2. Long Stocks and stop loss orders.

3. Long Stocks with long put options


Note: OTM - means Outside the money.

Technical Indicators

10 days EMA: 4806.77
21 days EMA: 4873.41
50 days EMA: 4965.65
200 days EMA: 5298.01

Next Resistance Levels:

Strong Resistence level at: 5298.01 - 200 days EMA

Strong Resistence level at: 4965.65 - 50 days EMA

Strong Resistence level at: 4873.41 - 21 days EMA

Next Support Levels:

Strong support level at 4718.00 set on Feb 05, 2010

Strong support level at 4639.10 set on Nov 24, 2011

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 Dec 17, 2011