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Small increments but a fairly steady one at
that: this is how we can describe the movements
in the Nifty in the last three sessions. It is
now quite close to its 2010 high of 5310; in all
likelihood, the high is likely to be tested and
humbled in this upswing.
For the index, the most crucial level now would
be 5247/48—this is the level where the 5-day
moving averages are located. Unless the skeptics
read bears are able to push the Nifty below this
level, the bulls would continue to hold their
guns and push it further up.
On the way up, the first test of its being able
to absorb supplies would come in around 5310;
however, once that level is conquered by the
bulls the next battle of supply pressure would
be fought between 5345 and 5360. There would,
most likely, be a pause in its upward march.
The real test of the Nifty would, however, come
at 5408. This level is going to be tested before
long but how soon that is the question. In any
case, around this level there would be a lot of
supply pressure because the urge to take money
off the table would be irresistible for some and
more market players joining the ranks of
naysayers would also happen. So much the better
for the bulls, since unless the Wall of Worry is
there the bull market can’t really progress; at
the same breath, beware when this famed Wall of
Worry morphs into an euphoria where you get to
hear the all too common refrain, “this time is
different.”
But for now, we are headed north!
Rajat K. Bose |
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All prices relate to the NSE, unless otherwise mentioned. |
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Stop-loss levels are given so that there is a level below/above, which the market will tell us that the call has gone wrong. Stop-loss is an essential risk control mechanism; it should always be there. |
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Book, at least, part profits when the prices reach their targets; if you continue to hold on to positions then use trailing stops to lock in your profits. |
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Don't chase a stock, if you are unable to buy a stock because it hits circuit levels on successive days, don't buy that. |
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The analyst and his clients may or may not have positions in the securities mentioned above. |
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Trading involves considerable risk. Trade at your own risk to the extent you are comfortable. The analyst shall not be responsible for any losses incurred for acting on these
recommendations. |
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