Tuesday, August 6, 2013

NIFTY

Hi Friends,
NIFTY

In my last post I mentioned about possible decline once Nifty starts trading below 5930. Within 9 trading sessions Nifty Declined more than 400 points. This Fall was very Destructive without any sizable pullback. Many Stocks crashed heavily. Except I.T. almost all the other Sectors crashed badly. As expected even the Defensive Sectors like FMCG & Pharma started Declining. And Auto, Banking, Capital Goods, Infra, Metals, Small & Mid Caps witnessed massive decline.

With this Massive Decline Lots of Stocks are reaching Oversold zone and forming RSI Positive Divergence. Nifty too forming RSI Positive Divergence on hourly chart. So some Sort of Rebound or Relief Rally is due on Nifty and Stocks.

Nifty has Strong Support Near 5630-50, which is expected to be held. As per my preferred count I'm expecting a Pullback to 5810-5860 over a week.. And Nifty May continue to go lower after this pullback.. Only in case Nifty gives Fast Rally above 5930 I would like to consider alternate count. As per alternate count Nifty still might be in its 'D' leg starting from 6111.80 which might be developing as Running Triangle.

While Nifty is at 5700 most of the Stocks are at 4500 levels. With lots of Sectors being oversold I would not be surprised to see the alternate count working. Sector Rotation has been the key for Traders over last Few Months. So if someone expecting a Larger Rally in Nifty as suggested by alternate count - Oversold Sectors may contribute for the same. Still one should do Independent Study of Nifty and Sectors/Stocks as there is lot of Divergence within Sectors/Stocks and Index..


Thanks & Regards,

Harsh Dixit.