The Nifty opened very weak because of weak American and weak Asian markets. Except for the first hour, within which it remained rangebound, never during the day did it show any signs of recovery. During the day there was news that Fitch Ratings has revised India’s local currency outlook to negative. Along with that it has also revised FY09 GDP growth to 7.7% and are looking at a fiscal deficit of around 6.5% of GDP. While this news was displayed and flashed on websites after the markets, the market must have known about it much before it was made public.
Looking at the 30 minutes chart of the Nifty, we see that a large range between 3850 and 4200 was broken today with the Nifty closing below 3850 in the last 30 minutes. With the Nifty breaking below this 350 points range, we have a downside target of another 350 points, which from 3850 translates into 3500 levels.There are various targets for the Nifty now. A lot of people are talking about support at 3600. We ourselves have got a target of 3500, as mentioned above. One of my previous posts mentioned of a target of 3671.70 or even 3048.75 and yet another post talks about a possible target of 2600. Now, what levels the Nifty attains is for it to decide. We know that all these are just theoretical targets and the markets may or may not achieve them. We also know that when it reverses into an uptrend, it will warn us by making higher bottoms and higher tops and we should then take long positions. As of now, we are out of the markets and sitting on cash waiting for the most opportune time to invest.
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