NIFTY WEEKLY :- 27TH JANUARY-31ST JANUARY,2014
The Friday trading was disappointing for the Bulls in the Indian Stock Markets, to say the least. The grind to perch S&P CNX NIFTY above 6350 for the week OR at least hold Nifty above 6300 on closing for the week has failed this week. Nifty has closed almost at similar levels of the last week. Additionally the story is; Nifty has failed once again in its climb to top and further. This is IMPORTANT now. Out of the last 15 weeks in Indian stock markets, Nifty in 12 weeks hovered in the range of 6120-6415. In the remaining three weeks the range shifted to lower side between 5973-6210. The simple inference is that the Nifty is in the range of 450 points( less if we consider the 12 weeks scenario only) in the last 15 weeks and it needs a trigger to break above the past highs. The resistance at levels of 6350-6425 is strong enough and Nifty struggles in this zone as we have seen in last so many weeks.
Bears on the other hand would cherish the closing on Friday. Nifty though have not given them anything to cherish, as it is still above its 20 DMA and significantly above 50 DMA. Till now the Nifty charts are indicating only ” Back to the old range of trading”. The world markets have real good news for the Bears. The red lines in the world market is the signal which makes Monday trading very important for the Bears. If Bears could take Nifty below 6125 in the next two trading session; they will score a moral victory and can plan further downside.
As Nifty is in a range for last so many weeks it has large number of supports and resistance in this range; therefore any move which takes Nifty out of this range needs to be SHARP now. On the downside a sharp move up to 5975 is on cards for the coming week if Nifty breaks 6125 in first two days of trading decisively. On the other hand, we could be struck in the ongoing range 6120- 6350 in the coming week. The coming week is also the expiry week and an important one. The scenario can paint itself in a color where now the FIIs decide to lessen their positions in the Indian stock market and wait till the election results in May, 2014.
In the coming week the first two trading days will decide the direction and momentum of the move for Nifty:- Sideways or Bearish. Remember, Nifty is in Bull zone and any positive trigger can give us a sharp up move for which Bulls have waited for the last 15 weeks or so. It’s not over for bulls and Bears have to act in the first two trading sessions of the important expiry week.