This blog spot contains discussion and analysis of stocks and securities trading in NSE and BSE. All stocks are analysed on Technical charts and an effort has been made to predict the future movement of these stocks.
The Nifty today opened weak, stayed weak, made a weak attempt to recover after noon but failed and became weaker after the European markets opened weak. So, there is weakness all around. The only thing that’s not weak is Gold, which went up sharply today rising $84, almost 11%.
After breaking down from the double top pattern formed on the 30 minutes charts a few days ago, the Nifty achieved its target at the opening bell of the third day. After achieving the target, the Nifty has now slipped into another range, this time on the 30 minutes charts, as seen above. This range is between 3950 and 4100. While the target on the daily charts remains 3800, it will be only after this range is broken through on the downside. In case the prices break out decisively above this range, that target of 3800 will be cancelled, at least for the time being.
If the prices do break out of this range on the downside, what will be the target on the 30 minutes charts? Well, this range is 150 points wide (4100-3950) and a breakdown will give us an additional 150 points which gives us a target of 3800 (3950-150). So, well, that conforms to our views/target on the daily charts.
That’s fine, but which side is the market likely to break out on? Well, we don’t know. That is what happens in a range. In a range, not only is the market confused/unsure, it confuses us too. Well, we may get some early indication from oscillator indicators when there is a divergence visible, but in this case the Relative Strength Index (RSI) is also not showing any visible divergences. This means, that we shall have to wait till a divergence is visible (which may or may not come) or for the market to come out of the range. So, for now, it is buy above 4100 and sell below 3950 (in the short term). Investors are advised to wait for now and not take any long positions, at least not till the market either achieves 3800 or breaks out on the upside above 4100.
But the international markets may provide some cues. There is some good news from the US. The Fed government has agreed to bail out AIG by giving them a $85 billion loan (that will be repaid by liquidating the company) in exchange for a 80% stake in the company. But there are fresh concerns about Morgan Stanley and Goldman Sachs (the two remaining independent securities firms), the result being that, at the moment, Dow Jones is trading 240 points in the red while the Nasdaq has lost 75 points. Crude remains flat near $97 a barrel. So, all in all, it looks like we are going to have a downside breakout from the range that we are in.
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The US markets (Dow Jones) was down over 200 points last night (Thursday) on concerns of crude oil reaching a record high of $123 a barrel. Even the Asian markets were weak this morning and we were bound to go down with weak global cues. It was because of this reason that the Sensex opened more than 200 points down while the Nifty opened about 50 points in the red and then stayed down all through within a range of only 30 points throughout the day.
We have the 30 minutes chart of the Nifty with us today and there are some observations that we can make from it. The support trendline on this chart is lower than it was on the 60 minutes chart. Here we have support from the trendline at around 5070, which has not been broken as yet. The highs made between 5065 and 5070 on 22nd, 24th and 25th of April also provide support at these levels, which has been signified by another trendline. And then we have another trendline, and this time a downtrending one, which signifies that prices should go up if they cross this trendline at 5100. This last trendline, if seen in conjunction with the RSI signifies a positive divergence, which means that while the prices have been coming down during this period, RSI has remained more or less stable. There is another trendline, which connects the high made on 7th April and the lows made on 15th and 16th April, which also provides support at 5070 but that has not been shown here to avoid two things – firstly, and more importantly, confusion, and secondly, excessive analysis, because excessive analysis leads to paralysis, also known as analysis paralysis, says Chris Garrett.
The price of crude oil has more than doubled in the last year and a half, has become six times in the last six years and has become eight times in the last nine years. Some of the causes of rising crude oil prices have been discussed in one of my previous posts titled “Renewable Energy”. Incidentally, this article has also been published on Reuters.
This article on Bloomberg writes that countries like China, India, Russia and the middle east may be responsible for the rising crude oil prices. A few days back President Bush too attributed the rising food cost to China and India. While that may have been a little far-fetched to swallow, Bloomberg (rather, the International Energy Agency in Paris) may well be right about its claim, though if we compare the per capita consumption, US is still consuming 10 times the energy than India does.
Dance with shadows says that The burden of the rising crude price has a huge bearing on the profitability of many industrial units in India. Commodities such as aviation turbine fuel (ATF), naphtha and bitumen have witnessed a huge price increase during 2007-2008. These products are selling at market-determined prices. Their prices are up by 27-39% year-on-year. It is expected that the rising price would have a huge impact on air travel, power and polymers sectors directly. We need to prepare to pay more for most manufactured products in the future.
This clearly shows that these increasing crude prices will have an effect on the inflation in our country and CRR hikes and interest rate hikes may not be the only solution. Maybe that is why the markets went down today, fearing the worst. It could very well be the same tomorrow, depends on global cues. Plus, the inflation data is also due out tomorrow. Let us cross our fingers and hope for the best. Technical Analysis does help buy but sentiment holds the key.
Update: This article was also published on the business and investing page of Reuters.
It was another day for the Nifty within the range. Volatility of the Nifty is now very low. Now the range is only 120 points wide between 4680 and 4800. We should see a breakout soon enough. A breakout out of this contracting rectangle should take the Nifty back within the broader range of 4620-4950. A move outside this broader range will give us a real movement. There is no use of making predictions about the direction of the breakout. The market will tell us which side it will break out towards. We shall position ourselves to buy in case of a breakout on the upper side.
Since the long term trend of the Nifty remains up, we should plan to buy on every dip. A dip is a rare occasion in a bull market. Luckily, we are getting these opportunities every third day now.
Yesterday, we had discussed that the fundamentals of the economy are still strong and that the markets have essentially crashed because of low liquidity, heavy speculation and problems in the USA and not because of any fundamental reasons of our country. And as the problems in the USA settle down, we should see some recovery in our markets too.
Today we shall discuss about the energy sector. Let’s start with oil. We know that oil is present only in limited quantity and there are only finite sources of oil available. There are sources which tell us that the production of oil has already peaked out or is likely to peak out in this decade. And also that for the last several years the world oil consumption has been more than the oil production and the demand is still growing. With growing demand (approximately at the rate of 1.4% per annum) and reduced production, we are eating into our reserves and according to the NATIONAL CENTER FOR POLICY ANALYSIS (NCPA)the oil available shall only last till the year 2056, but with better conservation and the use of substitutes we may actually scrape through to the year 2100.
To protect our future generations from going back into the stone age, we shall have to look for alternative sources of energy. A lot of countries are now taking steps to shift to alternative sources so that we could reduce the consumption of oil and make it last longer. Warren Buffett once said that If a business does well, the stock eventually follows. Alternative energy is one of those concepts which will continue to do well, at least in our lifetime. So, it may make sense to buy stocks which are into renewable energy like Suzlon (wind power), NTPC (thermal power), JP Hydro (Hydro and thermal power), Neyveli Lignites, Webel SL (Solar energy) etc. Buy them today and hold for long term. Your children could become crorepatis with these stocks some day.
As mentioned in earlier newsletters, we are inviting our esteemed readers to send in their contributions in the form of articles to be published on this page. Take this opportunity to voice your opinions to the world about the article today, the markets in general or anything remotely connected to the markets. Please e-mail your articles and don’t forget to mention your name and location so that you are given due credit for the article that is published.
Friday, again turned out to be a bad day for the markets. Just when the global cues were okay and the markets were showing some signs of recovery, we were hit by another bit of negative news. This time the culprit was the inflation data (wholesale price index), which showed that it is now rising with a growth rate of 7%. Gradually, it has started picking up speed too. The markets went down because it seemed imminent that the RBI would soon have to increase the interest rates to control inflation.
Seen above is the daily chart of Nifty. We can see from that chart that between the period Jan 21st to Mar 7th, the Nifty was in a range of between 4800 and 5550. Finally it broke out of that range on Mar 7th, against all expectations and when a target of 4100 was expected, it went into another small range between 4480 and 5000. In the intermediate term, nothing can be said until this range is broken out of. The short term trend has now again changed to down. Stay away from the markets until the trend emerges clearly. Long positions taken yesterday, if any, may still be held with a stop loss of 4480.
Lately, there has been so much talk about the economics of our country. Talk that our country’s economy is growing and that the GDP of the country which was exhibiting a growth rate of 8.5% to 9% has now reduced to about 7%. Also, the inflation index (wholesale price index) which was floating below 5% for quite sometime has now increased to more than 7%. And talk about whether the interest rates should be decreased to reduce the interest rate differential between America and India. Or whether they should actually be increased to control inflation? But, how many of us really understand what all this talk is about? What really is the GDP, what is inflation, how do interest rates affect inflation/GDP? Do we really understand those things or do we leave it all for ‘Dr. Reddy’ and ‘PC Uncle’ to handle? Well, while ‘PC Uncle’ (Mr. P Chidambaram) and Dr. YV Reddy are much more knowledgeable about these things than we are, we should really be knowledgeable enough to know whether they are managing our country properly or not. Knowledgeable enough to know that what they are doing is best for the country. And knowledgeable enough to know that we are not being taken for a ride.
This post is definitely not written to explain all fundamentals of economics and is most definitely not going to go too deep into everything. It is just a very simple mail to make the readers understand a little bit about these economic matters so that they know what all this talk about GDP, inflation and interest rates really is about. At the end of the post, I’m sure a lot of you would still have a lot of unanswered questions. You can please leave all your questions and comments about this post in the comments section below and I will try and address those queries (with whatever little knowledge that I have).
In layman’s language, GDP is the sum of the total consumption, investments, government spending and net exports. In simpler words, it measures the financial health of a country. When we say that GDP is showing a growth rate of 8% that means that if the GDP today is a trillion dollars, then next year it would probably be 80 billion dollars more than a trillion or $1.08 trillion. But how does the GDP grow?
When we begin to think of a starting point of an economy, we don’t know where to begin with. It’s all like the chicken and the egg story. But let’s begin anywhere. Let’s say that a country is in a deep recession, companies are not able to make profits, they have to cut down production, lay off people and everything looks bleak. Then the central bank reduces the interest rates. This makes it cheaper for the companies to borrow money. Some of the daring ones borrow more money to increase production. This needs additional workforce. The number of jobs increase, the employees start getting money and their spending (on various items like necessities, wants and luxuries – in that order) increases, which increases the sales of the companies. Additional sales means additional profits, which means more production, more jobs and more spending. And suddenly things are not looking all that bad. There are jobs available, the companies’ profits are rising and there is more consumer spending, all of which contribute towards the increase in GDP. Everything is rosy now.
Everything is rosy now? For how long? With so much money available in hand, the consumers are willing to spend on everything, even on luxuries. And they don’t mind paying a little bit additional for anything since they have additional money available. So, demand increases and supplies are not enough to meet all this demand. So, a simple law of economics comes into force and prices increase. This increase in prices leads to inflation. Inflation cannot be left untackled because soon the prices may start rising exponentially. And inflation is the worst enemy of growth.
The only way to tackle inflation is to reduce the demand, which can only be done by tightening the money supply. And to tighten the money supply, the central bank has to increase the interest rates. An increase in interest rates leads to decreased borrowing, which in turn leads to decreased production, lay offs and decreased consumer spending. That leads to lower sales, lower profits and soon the companies again start making losses.
It all starts off with the GDP growth rate coming down and down and soon there is no growth. The expenditures are more than the incomes and the country starts eating into its reserves. That period when the growth rate becomes negative is called a recession. That is what America is going towards, though unofficially people have started saying that it already is in a recession. All these things don’t happen quickly. A full cycle from a peak to a trough and back to the peak again (or vice versa) usually takes between 4-5 years.
US is moving towards a recession. India is not. India still has a growth rate above of 7%. So the rate of growth has definitely reduced from 9% and above to between 7 to 7.5%. That is not recession. Recession will come when this growth rate keeps decreasing to zero and then becomes less than zero. And that is still a long time away.
Presently, inflation is catching up with India and soon the central bank (RBI) may have to increase the interest rates. That will affect the growth rate but inflation is a bigger enemy of the country than a lower growth rate. Mr. SS Tarapore, a noted economist and a former RBI Deputy Governor, in a recent interview on CNBC
mentioned that the inflation index “greatly and grossly understates” the extent of inflation which means that if the inflation index is 7% then at the grassroots level (consumer price index) it is actually much more than that and that it is a ‘sin’ to let the inflation increase because it affects the poorer section of the society more badly. He is of the view that the RBI should increase repo rates by about half a percent in one or two steps and should introduce an incremental cash reserve ratio. He says that the younger economists who argue that the rupee should be allowed to appreciate and the interest rates should be lowered are wrong because doing that would be an “unmitigated disaster”, specially for a country like India which still has a fiscal deficit to deal with. He finally ended the interview by saying that there has to be a trade off of “lower interest rates and higher inflation” with “lower inflation and higher interest rates”. According to him that definitely would cause pain but one has to learn to live with the pain.
I hope, after reading this article, things like GDP, growth rate, inflation, interest rates seem to be a lot simpler. In case you still find any difficulty, please feel free to leave your queries by clicking on comments below.
Happy investing!!!
Update: This article was also published on the business and investing page of Reuters.
A new feature has been introduced with effect from 3 Mar 2008. Now you can listen to an audio of all the posts written here. The link to the audio is at the end of this post. Click on ‘hear this post’ and a new window will open which will create an mp3 file and then read the post for you. Just make sure that your speakers/headphones are on. Now you can listen to the posts even in your car while driving to work, provided you have opened the page on your laptop. The biggest advantage is to the people visiting the site from their mobile phones. They can just click the link to the audio and the post will be read out to you. Great, isn't it?
Below is the 60 minutes chart of the Nifty. As seen from the chart, the Nifty comfortably breached the downtrending line which was shown on the chart yesterday. In yesterday’s newsletter we had discussed a number of negatives visible on the chart. Excerpts from that newsletter have been pasted here:
The Nifty is finding resistance near the blue downward sloping trendline which is currently near 4675.
The last pivot high was the high of the day today which is at 4734.
There is a very strong trendline near 4750 on the daily charts and that is more likely to push the Nifty back than the short term uptrend pushing it up.
The Relative Strength Index (RSI) has made a bearish head and shoulders pattern, though it has not been confirmed as yet.
Now lets look at each of the negatives one by one.
The resistance line near 4675 was broken on opening itself.
The pivot high at 4734 was also broken on opening only.
The ‘so-called very strong trendline’ also was not hard to cross and was crossed in the first hour of the day.
The head and shoulders pattern forming in the RSI was cancelled today.
So, all the negatives ‘went for a six’ today and we are left with positives alone. Is that a good enough reason to buy? Well, maybe it is. But, first of all, a little bit of analysis is required as to why the markets recovered today. Our markets were going down because the US markets were going down. There were fears of recession, which, to some extent, are still there. Because of the sub-prime crisis, the financial stocks in US suffered a lot. So much so, that JP Morgan lost 31% of its value in a period of 10 months, Goldman Sachs lost 39% in only half the time, Lehmann Bros’ stock prices came down by 52% in a period of a month and a half and the worst affected was Bear Stearns which lost 96% of its stock price. It was so badly affected that JP Morgan agreed to purchase it at only $2 per share whereas the price in Oct 2007 was $128.
Now JP Morgan has agreed to pay $10 per share as against the $2 quoted last week. This suggests that the financial stocks may not have been as badly affected as it was expected. This news made the markets bounce back a little. But have the recession fears gone? No, not yet. They will come back to haunt us again in some time. Bad news will, probably, keep trickling in in the months to come. But, for now, there are expectations that the concerns over a possible recession have stabilized.
Another reason why the markets were going down was because of concerns of the Yen carry over trade. Till a few months back, Japan had a no interest rate regime while the interest rates in US were in the range of 4-5%. This gave a very good opportunity for people to borrow money in Japanese Yen, invest in the US markets, earn a return of about 5% per annum and then return the yens interest free. Now, the interest rates in Japan have increased to about 0.5% and interest rates in US have gone down to about 2-2.5%. And the same thing is not very profitable now and with the interest rate differential decreasing and the dollar depreciating against the yen, people were in a hurry to liquidate their positions in the US and return the yens. The situation was so bad last week that a US dollar could only fetch about 95 yens. Now with the Yen to dollar ratio going back over 100, that also seems to have stabilized. So, as far as the US markets are concerned, the worst seems to have been over.
Looking at the India story now, we have seen that the GDP growth of our country has been about 8.5% and above. Sure, there are signs of this growth rate slowing down to between 7 to 7.5%. But that is still a very good growth rate, specially for an economy of our size. No other country having an economy of such size can boast of a growth rate this high except China. That is definitely a big positive for India. And this is likely to continue for a long period of time due to the demographics of India as explained in an earlier newsletter. Talking of the interest rates, US is now down to an interest rate regime of between 2-2.5% whereas India is still in the region of 7-7.5% with no likelihood of a rate cut in the immediate future. This differential is now more than 5%, a large enough differential. Now the yen case may happen in India also that the investors may borrow money in US dollars, invest in India, earn a return of 7-8%, and return in dollars with 2% interest, thus pocketing the differential. This is another reason why the money should now start chasing India. But this is all a long term story. We are still quite confident about the long term story being good for India. But what about the short term?
Yes, the markets did rise quite a bit today and in the process kicked aside all negatives. It did confirm the start of a new short term uptrend but is this the end of the bear market? Was this the bottom? Well, that can never be said with conviction until the next bottom is made. The next bottom will tell us whether this was the bottom or there are more bottoms in store. And yes, 4750 is again the level to watch. It has now turned into a strong support. Resistance comes between 5080-5100.
Nifty calls suggested yesterday would have made very good money today. A big move above 4900 tomorrow MAY signal the end of the intermediate term downtrend too. But we need to wait and watch the movement tomorrow, and more importantly, the next dip. As of now, since the short term trend has changed to up and there are chances of a possible bottom having been made, we should be buyers on any dip with a stop loss of 4480 (the previous pivot low). But be strict about the stop loss. We would not like to get caught on the wrong side of the market.
A new feature has been introduced with effect from 3 Mar 2008. Now you can listen to an audio of all the posts written here. The link to the audio is at the end of this post. Click on ‘hear this post’ and a new window will open which will create an mp3 file and then read the post for you. Just make sure that your speakers/headphones are on. Now you can listen to the posts even in your car while driving to work, provided you have opened the page on your laptop. The biggest advantage is to the people visiting the site from their mobile phones. They can just click the link to the audio and the post will be read out to you. Great, isn't it? The Nifty opened a few points in the green today, came down in the next hour and a half to find support between our levels of 4480-4500 and then staged a dramatic recovery to go up more than 100 points above yesterday. But in the last one hour it came across heavy selling which pushed it down to 4526 to close only about 35 points in the positive.
Seen above is the 60 minutes chart of the Nifty along with its Relative Strength Index (RSI). The bearish head and shoulders pattern seen on the RSI yesterday did not get confirmed today also and it went on to make another small shoulder today. Sometimes multiple shoulders are also possible in such a pattern. This pattern would stand cancelled if the RSI were to go above 60. The Nifty continues to trade in a short term downtrend. This trend would change to up if it were to go above 4620 (a new pivot high made today). Support is likely between 4480 and 4500.
At the time of writing of this newsletter, Dow Jones was up 285 points, Nasdaq was up 50 points and FTSE 100 was 176 points in the green. All of them are positive on expectations of a 100 basis points rate cut to be announced by the Federal Reserve in the US later tonight. This rate cut is essential to bring in more liquidity into the system which should help the US economy, which is fast slipping into a recession. This expected rate cut has helped the US markets to go up today and our markets should follow suit when they open in the morning. As suggested in yesterday’s newsletter, the Nifty should find heavy resistance between 4700 and 4720 and any rally to these levels should be used to cut long positions or to create fresh short positions.
Markets are closed on Thursday on account of Eid, on Friday on account of Good Friday and on Saturday on account of Holi, though they are always closed on Saturday and Sunday. This four day long weekend may trigger selling in the markets because a long weekend means higher uncertainty than the usual weekend. And it is a well known fact that markets do not like uncertainty, hence we should expect the markets to come down in the afternoon session tomorrow. That is all the more reason why the morning rally should be used to exit longs. The sun outage period of the markets is now over and they will be open between the regular timings from 0955 hrs to 1530 hrs from tomorrow onwards.
As mentioned in earlier newsletters, we are inviting our esteemed readers to send in their contributions in the form of articles to be published on this page. Take this opportunity to voice your opinions to the world about the markets today, the markets in general or anything remotely connected to the markets. Please e-mail your articles and don’t forget to mention your name and location so that you are given due credit for the article that is published.
Happy investing!!! Wish all Muslims, Christians and Hindus a happy festival weekend.Read the Full Post Here
In Monday’s newsletter, we had attached a chart showing the performance of the Nifty with respect to other major world indices, which showed that the Nifty has outperformed all other major world markets in the past and is likely to do so in the future. That was the technical view-point of why the FIIs should invest in India.
Today, in this newseletter, we will discuss the fundamental factors of why it should come to India. With the events of the last few months, it has been more than evident that the largest, if not the strongest, economy in the world, i.e. that of the United States is heading towards a recession. But how does one say that? The answer is the GDP (Gross Domestic Product). A GDP, in simple terms, is used to gauge the health of an economy. Let us compare India’s GDP with the other world economies. According to 2007 data, measured at $796.1 billion, India’s economy is the tenth largest economy in the world. United States has the largest economy with a size of $13.22 trillion. The other countries between the US and the India in decreasing order of size are Japan, Germany, China, UK, France, Italy, Canada and Spain. Now let us look at the GDP growth rates. Again, according to 2007 data, India stands at number 17 with a growth rate of 8.5%, China stands at number 9 with a growth of 10.5%. Azerbaijan has shown the maximum growth of 32.5% in 2007 but has a size of only $14.05 billion. Out of the top ten countries by size the third country, after China and India, is Spain showing a growth of only 3.6%. United States stands at number 63 with a growth of only 3.4%.
You may ask – so what? Just because India is now showing 8.5% growth does not mean that it will be the same in the years to come. Well, you may be right. It may fall down. The signals are already there. But to what level and because of what reasons? Lets consider the various components of GDP. In layman’s language, GDP is the sum of the total consumption, investments, government spending and net exports. Let us look at each one of them in detail.
Consumption is the sum of expenditures by households on durable goods, non-durable goods, and services. Investment is the sum of expenditures on capital equipment, inventories, and structures. Government spending is the sum of expenditures by all government bodies on goods, services and infrastructure. And Net export is the difference between total exports and total imports.
Now that we know the components of a GDP, simple logic tells us that the GDP would go down only if either consumer spending, or companies’ investments, or government spending or exports, or all of them, go down or if the imports go up. Now let us look at the demographics of India. According to a survey done recently, about 65% of the population is between the age of 15-64. Another source also says that the working population of India is expected to remain between 60-65% till 2050 as compared to the ageing population of the western world. A higher percentage of working population means increased demands, which means increased production, which means increase in the number of jobs, which means increased salaries, which means increase in disposable income and which means increase in consumer spending. This explains that both the consumer spending and investments are set to increase in the years to come. With increase in salaries and increase in spending, it would mean increase in tax collections which would, in turn, be spent towards developing the country’s infrastructure. And with the Commonwealth Games approaching in 2010, infrastructure is now set to increase at a much faster pace than usual. The only concern is that with recession in the US, will it affect our exports? If the exports do go down, it will have a negative impact on the GDP. But how much would a recession in US affect us? Our main concern right now is that it will affect us because in this world of international trade, we are dependent on the US also for our exports and a recession there could lead them to cut their imports and hence our exports. But how much are we really dependent on them?
For that we have to see the export figures to US. In the year 2006-07, our exports of goods were roughly 14% of our GDP while total exports of goods and services stood at 27% of the GDP. Out of the 14% (of GDP) worth of goods exported by India, 14.9% (of total exports) was exports to US, which, in turn, means that as far as export of goods is concerned, only 2.09% of our GDP is dependent on them. If 27% is total exports out of which 14% is for goods that means 13% of services were exported. Unfortunately, countrywise export data of services is not available but we do know that out of a total export figure of $119 billion, $54.6 billion (45.88%) accounted for export of software and BPO services. Since the major exports of services to US is in the form of software and BPO only, it means that exports of services to US accounts for roughly 6% (45.88% of 13%) of our GDP. So, our total exports to US is only about 8% of our GDP. Now, how does a recession in US affect us? If they are in a recession, will they stop all their imports? Obviously not. They would, at the most, reduce it to save their spendings. To reduce their costs, they may cut down on imports of manufactured goods. Another way of reducing their spendings would be to outsource some of their jobs. Since both China and India specialize in providing skilled labour at cheaper rates than America, and since India is an English speaking country, most of those outsourcing jobs should come to India. So, while the US imports of goods may go down, the import of services may actually increase. Even if they reduce their imports of goods from India by a hefty 25%, it would still affect our GDP by only between 1 and 2%. This means that the growth rate of our GDP would still be much much higher than the top ten countries of the world (except China).
The above facts coupled with the interest rate differential between India and the US leave no choice with the FIIs than to invest in India.
After breaking down from the double top pattern formed on the 30 minutes charts a few days ago, the Nifty achieved its target at the opening bell of the third day. After achieving the target, the Nifty has now slipped into another range, this time on the 30 minutes charts, as seen above. This range is between 3950 and 4100. While the target on the daily charts remains 3800, it will be only after this range is broken through on the downside. In case the prices break out decisively above this range, that target of 3800 will be cancelled, at least for the time being.
