Weekly Analysis- 14-03-2011 to 18-03-2011
2011 begun with strong note but indian markets started crashing after non stop non ending flood negative news flow. Last week was its extreme.
"Nifty plummeted by 94 points in last week,firstly on account of the political drama between the DMK and Congress,then escalation of violence in Libya and in the last earthquake in Japan."
DMK and Congress issue has been resolved but no solution of Libyan internal disturbance and radiation risk after blast in Japanese Nuclear Reactor. Libya problem may boil crude rates and Japanese problems will hamper global economy as well as quantum of nuclear radiation risk is not known yet.
Uncertainity will prevail long, Indian stock markets will open and trade in most bearish and confused sentiment in the coming sessions. First of all it has to be understood how Indian markets wil be finally reacting on all these calamities:-
Long term trend is confirm down and Nifty retraced from 200 Day EMA(5600) 2 times in last 2 months after forming rounding top. Nifty also recovered 2 times from 5200 which had been strong support. Nifty recovered 2 times from 5400 in last week therefore 5400 is also a support. Internediate term and Short term trends were side ways and turned confirm down last Friday.
1- 2 Rounding Top Resistances at 5600 Chart:-
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Indian markets were already weak and facing resistance at 200 Day EMA but Libya revolt and Japan earthquake may trigger fresh down move in the begining of week therefore sentiment is depressed and survival near following 2 supports will be watched first:-
1- 5400- Nifty slipped after earthquake news and recovered from here on 11-03-2011.
2- 5200- Rally started from here in July 2010 after good consolidation and also gave support near 5200 in last 2 months.
2-Immediate Supports & Resistances Chart:-
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| Just click on chart for its enlarged view |
Conclusions:-
Immediate possibility of crossing 5600 is negligible. Nifty survived above 5400 after DMK support withdrawing news on Monday,Gaddafi attack on oil infrastructure news on Thursday and Japan earthquake news on Friday therefore 5400 will be watched first and if Nifty sustains below 5400 then fast 5200 will be seen. More or less market will first understand all negative factors and its implications within 5200-5600. If Libya situations does not improve and Japanese nuclear radiation don't more deteriorate then Nifty may remain range bound within 5200-5600 and prepare for next moves. Although most depressing sentiment but following 3 declarationS will also decide Indian markets mood in the coming week:-
1- Monthly inflation data
2- RBI's mid-quarter policy
3- Advance tax numbers
As Indian markets are range bound for the last 2 months and 5200 had been strong support therefore its breaking down will be loosing of all hopes and Bear markets confirmation. If it happens then targets below 5200 will be given. Japanese calamity is worse than 2nd world war and any up move will be decided after fresh supports confirmation only.
weak Weekly opening and next markets will be decided firstly according to survival of 5400 and then 5200. View is cautious,slipping below 5400 will be strong indication of fresh down move begining and sustaining below 5200 will be confirmation long term Bearish Indian markets.
Japanese earthquake vast looses has been seen and big uncertainity about nuclear radiation and until that will not be clear till then remain cautious,its worsening and looming large will mean Nifty below 5200 therefore all its developments should be watched first.
Dipping is confirm and long positions should be created after indian markets bottoming out confirmations. As sentiment is most depressed therefore fresh shorting should be done after fresh intraday selling formations. Cautious trading because high intraday voltality may be seen also.
