Consolidation to Continue

For over a month now, the Nifty has been consolidating within this range of 4800-5500. Till the Nifty moves out of this range, a clear trend will be difficult to predict. But it has already been predicted that after such a heavy downfall, a long consolidation was to be expected. After today’s downward move, it can be observed that the Nifty has made a lower high as against the previous high that it made in the beginning of the month. The Nifty has three supports visible on its daily charts. The first one is the support around 5100 levels, where it has found support on 5 occasions within this range itself. The next is the support provided by the 200 day moving average at 5015, which happens to be quite a strong support. And last, but not the least, is the support at the lower end of the range between 4800-4900. On the upperside, resistance lies between 5400 and 5500. It is noticeable that the Nifty has again turned down after a doji day.

Shown above is the relative performance of the top 9 indices of the world starting from August last year. The topmost line in green is that of Nifty and the bottommost line is that of Nikkei. Dow Jones is the black line, which is somewhere in the middle position. It is clear from the chart that despite the heavy correction, it is clear that only the Nifty and the Hang Seng have been clear outperformers as compared to the rest of the world. I have seen the chart on various time frames and have seen that in any chart longer than a 3 month period, the Nifty has been an outperformer. This chart is also available to FIIs all over the world. Not only this, they have better research available which shows that the Nifty has been, and will be, an outperformer as compared to the rest of the world. Imagine, when the sentiment improves, and if you were supposed to invest your money, where would you invest it? Thank you, your answer says it all.

Happy investing!!!

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