12 December 2009

Nifty : Crude way?

Lets look at crude first which has dropped a lot after forming a ranged top in the $77-$82 region and since has been declining consistently to almost $70 level. What we see in the chart is the formation of a Top after hitting $80 level regularly which it found pretty difficult to cross. Failing to cross a resistance is a very strong sign, that prices will go down (maybe significantly at times) and then reattempt to break it.

We see a rounded reversal pattern here which looks to end only around 65-67 levels. Prices currently are in a very bearish orientation and hence can go lower from here.

Now lets look at Nifty chart above. Here as well we see multiple attempts to break the 5180 resistance. And if sentiments remain positive but conviction to buy at higher levels do not come, we can expect to see Nifty decline in the same way as we see Crude Oil decline above. Which would be slow initially and picking up pace in latter phase. Though predicting the time frame in which this flattish range breaks is almost impossible.

I have been reading, hearing and even writing about the more probable outcome of a ranged trade which is a fast and fierce in either direction. Markets love to surprise, who knows we will never get the sharp movement which we are expecting on the breach of 4950 or 5200, but get this slow movements and pick pace when we least expect! The idea is not to stand for a view but to be open to all and position yourself aptly!


Tarique Anwar said...

Scenario Invalid as Nifty crossed 5183!

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