Software & Finance

Nifty Weekly Forecast From Jun 18, 2012 - Not safe to hold long positions! (Expected Trading Range: 4970 - 5150)

Jun 15, 2012 - Nifty closed today at 5139.05 which is about 71 points up from the last week close of 5068.35 on Jun 08, 2012. Nifty was trading between 5015.15 and 5146.20 that is the swing of 131 points.


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 - Nifty Regained its 200 Days EMA

Every day news coming out from Euro Zone created a huge panic in the market. Due to the technicals, S&P 500 regained its 50 days EMA. Besides everyone wants to front run the Fed by taking long positions on US treasuries. Fed is not going to buy at high price on its long dated securities. FOMC meeting is scheduled on Jun 19 and Jun 20, 2012. You can expect the Fed Statement by Wednesday Jun 20, 2012 at 2:15 PM EDT.


As predicted in the last week, Nifty regained its its 200 days EMA of 5117.39 and closed well above that point. Now it is not safe to hold long positions on Nifty.

US will hold presidential elections on Nov 06, 2012

With respect to US long term treasury prices, TLT closed today at 126.40 with a little gain for this week compared to the last week close of 125.21. It is the perfect time to initate short position US treasuries. The upside is very much limited on US treasuries and downside is huge.

Last Week Low: 5015.15
Last Week High: 5146.20



Not Safe to hold your long positions on Nifty


Last week I have mentioned, once Nifty reached 5117, it is an exit point for your long position on equities. It may continue its bull run but it does not promise anything. 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 one and half 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

CBOE Volatility Index (VIX) closed today around 21 today. VIX has to consolidate from these levels before it makes up a powerful upmove. Still fundamentally the US market is very week due to unemployment and slumping house prices along with US debt downgrade. Always fundamental wins in the long run.


Only if you are day trader, you can have the following options:


1. Buy 1X OTM call option and 1X OTM put option - Long Strangle.

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: 5051.09
21 days EMA: 5018.95
50 days EMA: 5057.81
200 days EMA: 5110.03

Next Resistance Levels:

Strong Resistence level at: 5110.03 Set by 200 days EMA

Strong Resistence level at: 5360.70 - Set on Oct 28, 2011

Strong Resistence level at: 5633.95 - Set on Jul 22, 2011

Strong Resistence level at: 5884.70 - Set on Apr 28, 2011

Strong Resistence level at: 6134.50 - Set on Dec 31, 2010

Strong Resistence level at: 6274.30 - Set on Jan 04, 2008

Strong Resistence level at: 6312.45 - Set on Nov 05, 2010 (Double Top of Jan 04, 2008)

Next Support Levels:

Minor Support level at: 5057.81 Set by 50 days EMA

Psychological Support Level at: 5000.00

Strong support level at 4835.65 set on May 23, 2012

Strong support level at 4718.00 set on Feb 05, 2010

Strong support level at 4639.10 set on Nov 24, 2011

Minor Support level at 4531.15 set on Dec 20, 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 June 17, 2012