What is nifty pointing in this, it pointing towards the probable extension of the fall. till now what we have seen seems to be just beginning of the trend. As can be seen from the chart nifty has just taken bounce from the 200 day EMA which happens to 5975 and we should respect the same, but it appears that the bounce might not sustain as the broader market is not supporting the same especially banking stocks and now IT stocks are also slowely moving down. As can be seen from the above chart the Directional Momentum Index(DMI) has started to move up and has moved above 20 after nearly one year now its at 25 levels and moving up. the move above 20 indicates that the market has started to trend and we can expect the trend to strengthen in coming days or weeks. so prepare for the worst. in the chart the red line at the bottom is the trend line from the lows of 2003 is at around 5400 which has been offering support for the last one decade including 2008 so in the current fall 5400 is going to offer a formidable support any breach of the same is going to result in a catastrophy in the make. So currently the 200 day EMA is going to be the thing which to be closely watched. Any breach of the same would provide an opportunity to short with stop loss just above the 200 day EMA. So in the coming week the 5975 should be closely watched.

 

M.Sri Mahidar

Trend is Friend.