NIFTY SHORT TERM AND LONG TERM VIEW

NIFTY WEEKLY CHART

As shown in above chart last Friday i.e. on 19/8/11 nifty has intraday  broken below 200 week sma (to be precise 4836), but finally closed above it.

One more interesting thing, if u can see as shown in above chart, on friday it managed to close above 38.2% retracement from low made in oct 2008. S o it looks like very short term bottom is in place and nifty may bounce back from here for few points (mostly up to 5000-5050), but remember this is only technical bounce and can be played by experts and which should be managed intraday according to technical set ups.

Also in above chart u can see that there are multiple supports around 4650-4700 level, so in next week you have to see for bullish reversal candle on daily time frame to play short term bounce if it comes. REMEMBER RIGHT NOW INTERMEDIATE AND LONG TERM TREND IS DOWN ONLY.

If it closes below 4650-4700 then the next level will be 50% retracement from oct 2008 low which is approx. at 4300.



In above chart u can see that whenever nifty has closed below 200 week sma it almost corrected 25-30%, so if it closes below 200 week sma it may correct up to 3700-4000 level which again comes near the target of  triangle break down as posted previously. Why 3700-4000, because this is the gap created after election result on 18/5/2009 and it has been said that eventually over time every gap gets filled. 25% correction from current level means 3600-3700 in store.

 The weekly trend line shown as above may also give support, which again comes around 4600-4700 level.

REMEMBER ALL THE LOWER TARGETS ARE VALID, UNLESS NIFTY STARTS TRADING ABOVE 5250, ONCE IT STARTS TRADING ABOVE 5200 WE HAVE TO LOOK FOR ALTERNATE SCENARIO.

ONE MORE INTERESTING VIEW IS THAT AS SHOWN IN THE MONTHLY CHART BELOW, IT WILL TRADE BETWEEN THE RESISTANCE LINE ABOVE AND SUPPORT LINE BELOW FOR NEXT FEW QUARTERS TO YEARS TO FORM ASCENDING TRIANGLE PATTERN WHICH LATER ON BREAKOUT ABOVE RESISTANCE LINE AND THE LONG TERM BULL MARKET WILL START AGAIN. THAT MEANS NEXT FEW QUARTERS TO YEARS WILL BE CONSOLIDATION PERIOD. IF THAT HAPPENS IT WILL BE BETTER FOR LONG TERM INVESTORS WHO ARE INVESTING VIA SIP ROUTE.

ASCENDING TRIANGLE FORMATION