Monday, September 14, 2015

Nifty: Precariously close to breaking point

Thought for the day
"People who think they know everything are a great annoyance to those of us who do."
Isaac Asimov (American, 1920-1992)
Word for the day
Swimmingly (adv)
Without difficulty; with great success; effortlessly
(Source: Dictionary.com)
Malice towards none
Three cheers for Leander Paes!!!
Have you noticed, Indian players usually do much better when paired with foreigners.
Doesn't it apply to business also?
Indian managers have done exceedingly good with foreigners like Page, Gates, Buffet, etc.

Nifty: Precariously close to breaking point

Last Friday Nifty tested the breaking point of a major bearish head & shoulder pattern and staged a feeble bounce back.
As the Nifty daily chart below shows, a material close below 7560 level will confirm a yearlong H&S pattern, opening the doors for a much larger and sharper correction over next six months.
In view of the higher volatility expected post FOMC rate hike decision on Friday, it is more likely that the market may continue to oscillate in the 7560-7940 range this week, before breaking out (or down) next week.
However, if Nifty manages to close above 8000 this week, the pull back rally may extend to at least 8240 next week.
In any case, from six months perspective, the eventual lower target of Nifty remains 6860 and the upside at this point in time appears capped at 8600 level.
A bounce back above 8170 level on favorable Fed, will be an opportunity to aggressively sell.
This week however my strategy should be wait on the side lines. In case of a early fall below 7600 during the week, I may consider buying near month ATM straddles for holding till Monday morning.
 
 
 

No comments:

Post a Comment