You must read previous articles and
watch the given chart carefully to understand this article completely.
Today’s outlook: -
Nifty has a typical bounce on last Friday
in last one hour of trades. It has tried to push the market to close on
optimistic note but things are still not changing. I am giving all importance
to 5838 as crucial support now. If it manages to sustain below 5838 then
definitely we will see levels of 5770-5754 marks.
We need to note two things. First is
that this market is strongly hoping for ‘rate cut’ after IIP and WPI data. This
market has already shown enough patience. If things remains he way like this
then we can see this market loosing patience.
There is another important
development on political front. Tussle begins over ‘promotion in reservation’
bill. Market would like to see the result of voting in Rajya Sabh. I am tired
of seeing those all odd comments coming front politician. You all know what I am
talking about.
On Friday, FII bought INR 574.38 crs
and DII sold INR 512.43 crs in cash market. I have already said in past also
that you need to study derivative also to conclude something. This kind of fund
is just information and should not be used for conclusion. FII are trying to be
bullish but they are not very confident.
Technical charts can be divided in
to three parts to understand it.
First is Nifty daily chart. It is
still showing that any rise will have tougher resistance above 5900 marks. It is
trying save but there is enough doubt for revival at current levels. As long as
we are staying below 5900-5912, we cannot see anything remarkable on positive
side. Technical indicators like Parabolic SAR, Band Bollinger is still hinting
for some weakness.
I have already said that MACD is
very close to give a sell signal. If this happens then it will be negative
divergence and this cannot be good sign to buy or any extension in gain. It can
be ‘rate cut’ hope which is reflecting on RSI but it still not good enough to conclude.
Market is expecting at least 25 basis point CRR cut.
Few days also, I have quoted that
VIX is not at a comfortable whenever we hit newer high. Value of VIX should be
down at each top formation compare to the previous one. It is happening in
reverse manner. Lows are trying to higher with every top.
Conclusion Nifty: On Friday I said that I like to
see trades below 5838 but it never goes below that mark. Low was just 5839. I
am again advising to focus on 5838. Trades below 5838 will give a better
confirmation for fall. As long as it is staying above 5838 it will test best of
your patience. On higher side 5900-5912 will act as stiff resistance. Be ready
for surprises this week. There is a high chance that market will loose patience
this week. Nifty December Future is (based on 15 minutes intraday chart)
suggesting that we cannot opt to trade long unless it stand above 5934 levels.
you can look at the chart to understand reason.
S&P 500 – Dip came even on Friday. We are
on decisive mode now. As of now also, I am expecting levels of 1400 to 1385 to
come before a Santa Rally. For today’s session, 1408 will be critical support
but fall need to come.
Regards,
Praveen Kumar
