11 April 2010

Nifty : Breakout ?

This is the best Nifty wave count that I can come across. I have mentioned it in one of my earlier blogs, (http://technically--speaking.blogspot.com/2010/01/nifty-competing-wave-counts.html)sorry for losing the plot lately!

The new structure which is getting created has the potential to reach 6500 as far as Nifty levels are concerned. But the real money in this wave would be made in mid and small cap stocks, as they are still relatively undervalued as compared to large caps. And if the Nifty keep on rallying, these stocks will have even more reasons to fly.

What we are not seeing in the rally is participation and euphoria. Which could be explained by the fact that it was only 15 months ago when we were witnessing bone crushing selling pressure. In general people are still fearful and in a mode of denial about this rally which was nothing but furious. With stock markets shrugging off every worry and returns far outperforming other traditional asset classes, we are bound to see retailers jumping in and pushing the indices to higher highs.

The fact the rally has been pretty swift, my belief that this rally is a correction in a downtrend and of retesting the earlier bottom sometime next year is still intact.


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