15 July 2014

NIFTY FUTURE TECHNICAL REPORT & CHART FOR JULY-AUGUST,2014

While analyzing the Daily Charts of “Nifty” We found that the Nifty looks oversold and based on few Technical observations, we believe it is apt for bounce back. We had said at 7620 levels, Nifty Spot could drift to 7400-7450 levels amidst budget volatility; however that volatility could be used to cherry pick stocks in the overall equity portfolio. Nifty Spot had
 made a low of 7422 on 14th July 2014. We continue to hold our view to create longs at 7400-7450 levels in spot with a Stop loss of 7290 in spot (Closing Basis) for targets of 7900-8000 by mid-August
  • The 50 Day “Simple moving average” is placed at 7400-7410 levels
  • The Lower Band of the “’Bollinger Band” is placed at 7400-7410 levels
  • The rising trend line connecting the lows of February 2014 and May 2014 is placed at 7320 levels; however the trend line support could rise to above 7400 levels by next week
  •  The RSI is at crucial 40-45 levels and 40-45 levels is usually considered to be the lower band of the RSI in the Bull Market.
  •  The RSI and Price Action is in Sync. Usually RSI and Nifty makes bottom within a week. We have seen in the past RSI and Price both bouncing back from the trend line together. The Technical Set-up is positive.
To Sum it up, the fall seen in the last week, throws open before us a golden opportunity to create fresh longs with above mentioned stop loss and Targets. While there may be a lot of Noise in the market about Nifty going to 6900-7100 levels because of Negative Feedback loop, Technical Analysis Suggests otherwise

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