The First Move: Avoid Nifty Call on Jan 14 2016:
This is the observation I made in that blogpost
Nifty is still trading around 7550 and one can still hope but if Nifty continues to weaken, then HOPE might turn out to bad strategy and market can witness significant time and price and time correction.
We have seen in the past: Market can inflict huge pain just when you least expected it. The Charts are telling only one thing right now: Be careful and don't HOPE too much. Let the market make the first move. This is not the time to hunt for bottom. This is the time to take shelter and wait. Let the big and brave money fight it out
What happened? - Nifty broke down below 7550 on Jan 15 2016 and tumbled to 6900
The SECOND Move: Nifty is standing at ULTIMATE SUPPORT LEVEL on Feb 14 2016: Nifty was at 6980
Nifty is once again at 200 week moving average and on Friday - it did bounce from that level. The low of 6869 assumes a lot of importance. If history is any guide - then ideally Nifty will try to bottom around current levels for weeks, build a base here and launch the next bull run from current levels
What happened? - Nifty did bottom around 200 week moving average for next 4 weeks before resuming a bull run in March 2016
The THIRD Move: April 07 2016: Why it’s time to focus on Nifty again?
The current pullback to 7540 looks like an excellent buying opportunity if we believe the current pattern. Having said that - one should always keep a stop-loss if Nifty slips 1% below 7540
Nifty was at 7543 on April 07 2016 and today it closed at 7850
What does this all mean?
There is Science of Stock price action and yes one can read market if one does it without bias and follow the basic principles of Technicals.
Disclaimer – The state of the market notes is Deepak’s perspective on the market. The column is purely for educational purpose. Nothing contained herein is a solicitation to trade or a recommendation of a specific trade. By reading this publication you agree to make no trade relying in whole or in part on the comments of the writers