Nifty Bruised And Oversold....Time To Pullback A Little???

Weekend Views On Nifty!!!

There are two kinds of news, the good and the bad, and then there is only one kind of market and this market has a mind of its own! Now whatever this market does, the news channels will need to justify it, and they do it so, by taking out the appropriate dress (good/bad news) and dress it up accordingly!

Right now is the right time to feel bearish; coz right now there is a bubble threat in China, coz right now Obama wants to reform the STREET, coz right now our own Inflation numbers aint looking good, right now the Dollar is looking strong and finally right now everyone wants to see the color RED!

And mind it, all of the above will hold water till the next close! Yes if we manage a V shaped recovery from here, then the news might be; China bubble dangers were unfounded and rumors of vested interests (maybe the Chinese will blame Google for spreading em), Obama will say he was misquoted, and Inflation is just another number and Dollar...well Dollar’s rise will be negated by fall in commodities and not the SnP!

I guess we as traders should stick to our charts and more importantly to our STOPS and trade! We might never know the exact reason or timing of the fall but we do know when the warning bells ring. Please see the two charts I posted on the 17^th and the 20^th of January, I guess they were screaming caution irrespective to the news that was yet to come!

Moving on to the chart below, we can see that we have just managed to penetrate the short term TL (three strikes done, now the fourth might be brutal!) and any fall from here is straight to 4800 and 4650..a good 10 % correction eh?

Meanwhile a pullback from here will depend on how we react at 5095/5115! Above that, its back to testing THE 5180! All in all for all long 4950 or near bouts is a good stop! Time to buy some value stuff, better do it in tranches and better do it after you have done your homework!

Gold Views!!!

SnP 500 Views!!!

It’s almost after two weeks I am doing the SnP 500 thing; see the chart I posted on the 3^rd of Jan, and read the complete post here! Well we did get our first target (and I guessed Obama chipped in to :-) )!

From the chart above you can see that the wedge has broken down and now we are staring down at the 200 periods MA and the significant low at 1040 and 1030 respectively. We have reached the OS levels in a jiffy and now it remains to be seen how we react to a pullback from here. Assuming that this fall is an another “buy the dip” and not THE DEEP, then also I would be personally satisfied once we are back to 1140 and above, till then it would pay to be a bear or sit aside!!!

Dollar Views!!!

I won’t add to analysis of the USD Index, as I still have the same views which were mentioned in the last post here and USD Index hasn’t done anything drastic yet that warrants any change of views!

By the way just for illustrative purpose I have drawn a fib projection on the chart which shows how the rough target of approx $82 was inferred! A typical AB=CD move in the making! It’s still at the volatile 200 periods MA and once again at the risk of being repetitive I would like to say that USD Index is likely to be strong as long as it trades above $77!