February turned out to be a month of consolidation. The month began on a weak note with Nifty slipping to 4675 levels where it took support of the 200 DMA (Days Moving Average) at 4657. A rebound from these levels was witnessed as Nifty formed a pivot formation as well as candle stick chart showed a doji formation. The high for the month was 4992 whereas the low for the month was 4675.40.
We witnessed a short term triangle formation from which Nifty gave a breakout after the budget. Volumes have increased and we are seeing increased participation from various market participants.
A new up-trend has started as Nifty has breached 100, 50 and 20 DMA. Volumes are also supporting the gains in the markets. Weekly chart is also showing some strength and is suggesting that Nifty may touch its previous high of 5310 in the near future.
On monthly charts Pivot kind of formation can be seen which is suggesting a stop loss at 4675. If Nifty moves higher and breaches its previous high of 5310.85 we may not see 4675 levels in the near future and Nifty may head up much higher.
Going forward we expect Nifty to continue moving higher. Any decline can be used as a buying opportunity. Shorting market doesn’t look like a good strategy. RSI (Relative Strength Index) is moving towards the over bought zone so correction may come in after Nifty moves another 3-5%. Leading indicator on volumes is bullish for the time being.
The first resistance can be seen at 5220 levels after which we may find Nifty moving up to the previous high of 5310. Once 5310 is breached we expect next resistance to come in at 5500-5600 levels. On the down side Support comes in at 5000 levels which is the 50 and 100 DMA after which we may find support at 4900 from where Nifty gave a breakout. If Nifty slips from these levels we may find Nifty going down to 4800 levels.
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