3 July 2014

NIFTY TECHNICAL REPORT FOR BUDGET 2014

The Indian markets have picked up momentum in the run-up to the Budget 2014, which will provide the much-needed direction to the markets. Most of the expectations are running a little ahead of what the government can actually do midyear, because one has to remember that they have taken up the government by the half of this financial year. Market once again hit all time high till the budget 2014.
New hopes from the market
In such bullish market where Nifty has become overbought and has rallied ahead of its time, investor expectations also get higher they are expecting nifty to touch the levels 7900 or 8000.The Basic tenets of “technical Analysis” will help you to trade in this highly volatile market. There are two possibilities either market will repeat the history and made a new all time highs or prices moves around the same levels.
History repeats itself
We believe this time too, nifty should correct at least Price-wise or time-wise. The probability of either one of the two events happening is very high :-
  • In case of a Price wise correction we believe Nifty could fall at least up to 7300-7200 levels where we believe investors should start pumping fresh money into the equities.
  • In case of Time Wise Correction we believe Nifty could consolidate around the level of 7800-7900 or will attempt the level 8000 till the upcoming budget, 2014 and will managed to stay on this level.
Price moves in Trends
If markets moves in trend and the “Primary Trend” of the market is Positive for sure based on different tools and parameters of Technical Analysis Based on the Charts of Nifty itself, its heavyweight components and Intra market Analysis, we believe the “Secondary trend” could have become negative. A Secondary trend is a situation in which the broader market, temporary moves in the opposition direction of the Primary trend.
Have a look of this whole week
On Monday nifty was traded around the level of 7600,then on Tuesday it crossed the 7650 level and on Wednesday nifty was crossed the level of 7700 but traded very mutely, and Thursday also nifty moving around the level of 7750.I.e. nifty daily climbed up by 50-55 points. Nifty has however become highly overbought and has rallied ahead of its time by showing such a tremendous performance. Strong rally was followed by a positive start of the Session but index remained muted and traded with very lethargic movement.  This all up moves on the charts are showing that market having so many expectation from this upcoming budget, 2014. We recommend you to invest on every opportunity as this is the beginning of a bull rally.After having a long time consolidation the Index gives 55.3% return in just few days which showing that it is the sign of a Bullish Market which was started from this week and is here to stay for a longer period of time.
 Market scenario for upcoming budget
We were monitoring a Downward Sloping Channel since last few days which has now been broken on the upside as the index closed above 7620. But, we are a bit skeptical on this development as the index closed marginally higher with very small body candle. In general scenario, the momentum after breaking this resistance should have been much stronger, which we feel was missing during yesterday’s session. Hence, we would avoid going aggressively long on the market and in fact, would advise traders to adopt a stock centric approach. In case, if the momentum picks up in the coming session then the index may re-test 7800 –8000 levels. On the flipside, 7600 – 7520 are seen as immediate support level for the index. Hence, any weakness around 7600 – 7580 would again dragged the index lower to test 7480 level.
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