LONG TERM VIEW

Even though fundamentals of Indian and world economy are not supporting  technicals   are suggesting possibility of long term up move ( at least for next 2-3 years ). In Nov 2010 NIFTY / SENSEX after testing the previous high made in 2008 started there downward journey. And as of now made bottom in DEC 2011.

NIFTY - WEEKLY

The chart given above is weekly chart. During down move from Nov 10, it formed downward moving trend line which acted as resistance for 4 times. Finally in Feb 12 NIFTY able to breakout above the resistance line. After breakout NIFTY tested the trend line in May n June when previous resistance line acted as support.

 As shown in the weekly chart above, NIFTY after breakout above resistance line consolidated ( i.e. traded in a narrow range) and in the process formed a triangle pattern. Yesterday it gave breakout from this triangle pattern on daily closing basis. So now it may target 5550-5600 with intermittent correction, meanwhile it may correct and may test upper boundary of the triangle.
CAUTION:- in market breakouts may fail, and you have to change your views according to future price action with proper stop losses.

  As shown in the chart above there is one more resistance line on weekly chart, near which NIFTY is trading right now. So actually if NIFTY gives weekly close above this trend line, and also weekly close above previous swing pivot i.e. above 5350 ( to be precise above 5348.55), very much  strength will be added to this up move

SO IN SHORT, IF NIFTY GIVES WEEKLY CLOSE ABOVE 5350 ONE CAN SAFELY BUY QUALITY STOCKS OR MUTUAL FUNDS FOR INITIAL TARGET OF 5600. AND IF THINGS GO WELL IT MAY TARGET 6300 IN APR-JUNE  QUARTER OF 2013.  

THE STOP LOSS FOR THIS VIEW AS OF NOW IS WEEKLY CLOSE BELOW 5030 ( TO BE PRECISE BELOW 5032.40 ). i.e. IF NIFTY GIVES WEEKLY CLOSE BELOW 5032.40 YOU SHOULD EXIT ALL YOUR BUY POSITIONS. 

IF NIFTY GIVES WEEKLY CLOSE ABOVE THE RESISTANCE LINE AND 5350 THERE WILL BE HIGH PROBABILITY THAT IN NEXT 2-3 YEARS IT MAY REACH 10,000. SO IF IT GIVES WEEKLY CLOSE ABOVE THE LEVELS MENTIONED ABOVE AND ONE IS READY TO ACCEPT LOSS OF 6-10% FOR A POSSIBILITY OF DOUBLING CAPITAL WITHIN NEXT 2-3 YEARS ONE CAN BUY QUALITY STOCK / MUTUAL FUND WITH STOP LOSS OF WEEKLY CLOSE BELOW 5030.

CAUTION:- The blog writers are also learners of technical analysis and the view mentioned here are on blog writers knowledge and inference of technical analysis, so readers are advised to take advice from expert financial advisers or do there own research before taking any decisions.

One more thing we like to mention:- in technical analysis you have to change your views according to future price action or pattern development and writers of this blog may or may not be able to update changed views.

DISCLAIMER: This Blog is meant for sharing our trading and investment ideas only and no calls to be taken as trading / investment recommendation. Visitors please do your own research or consult your advisers for safe trading, investing.