NIFTY FIFTY

[AMITBE]

It was just as the doctor ordered, and an orderly, satisfactory day at the markets indeed.
To the up if 2625 was not sustained, to the down 2592-2594 gave good support with 2584 not threatened at any time.
The Monday after the all time weekly high Friday did not prove to be a strong turning day to either direction.
'The Morning After' effect, in a manner of speaking, was rather graceful!

 

[AMITBE]

So the day one of the correction, if that is the right term, came and went with no severe reaction in either direction. Consolidation is the name of the game at this point when the Nifty is so close, a move or two away from all time highs.

However yesterday's close at 2602 places the Nifty at a bit of the crossroads. It has now various directions, or rather marks and levels which are within reach depending on how it moves today:
To the down there is the Fibanocci 2584 first. Then 2578, a major landmark. Then a few important levels lower down to 2545 where the good times would be under serious threat.
To the up is 2609-2618 above which we are back within striking distance of the all time highs with a few important marks along the way at 2325-2635-2642.

With the expiry of the current contracts so close, there is volatility to contend with today.
The other factor is the Bihar election results which has strong ramifications on the govt. at the centre which carries on into the market.
For these factors, the Nifty is likely to be under pressure today.

The levels, it's important to climb above and sustain 2607-2609 to begin with. Further up is 2620-2625.
Down below, 2592-2587 hold immediate supports. 2572 is deep, but a strong support.

 

[AMITBE]

2572 is protection for 2569 and 2561 which are important marks.
It would be good to keep above this level at close.

 

[AMITBE]

There is some concern now at the way selling pressure has emerged at every rise yesterday. While there is no stark sign of panic selling leading to sharp sliding moves yet, the price action in the Nifty yesterday showed a marked weakness at every rise, with some buying support also seen. Perhaps one should attribute this volatility to the contracts expiry tomorrow and the Bihar election results as written here yesterday.
The fact is that the recovery in this round was as swift and furious as was the slide a few weeks ago. So nerves are quite understandably stretched.

The correction and consolidation wished for here a couple of days ago should really have been in a tighter range than what has been witnessed yet, atleast to the lower reaches. The comfort zone is very close to the edge as a result of this deeper correction.
However today holds the power to put things right again. Should the bulls make a sustained charge today and tomorrow, there should be a lot of short covering to help the return of the Nifty into the 2600s.

At this point 2569-2561-2554 are the crucial levels to hold, as below this lies the 2540-2545 strong bearish trigger zone.
For today it's vital to climb above 2584, our magic number and how it keeps surfacing, salutations to the great Fibanocci! 2601-2609-2617-2625 are the marks to the up.
Down below there is immediate support at 2569, and below 2561 is 2554-2545-2540-2533.

 

[AMITBE]

Going into the session today, also the last day of the contracts expiry, the outlook appears pretty decent.
As mentioned here earlier, 2609 is an important mark and the close yesterday fell a tad short at 2608. No fear, though numbers matter as ours is a numbers game.

A sustained bull pressure would certainly help the cause today as bears duck for cover. If the Nifty is to revisit the higher levels from here without hesitation, 2625 has to be taken first and then 2634. 2634 area has seen some strong tussles on a few occasions in the past. This is not neccessarily for today though within range, but from here on also.
Above this the Nifty would be strongly placed.

For today, 2592-2595 are vital to protect, else 2584 again gets into play. 2577-2572-2569 are further below should the need arise.
2617 unless taken firmly right away, may niggle mildly. Then on to 2625-2634 with a couple of soft hurdles along the way. If 2634 is taken, 2641-2645 would be the immediate target.

 

[coljaspal]

Dear Amitbe,
I may be wrong, but both, the fall last month and the subsequent retracement this month, apeared to be too steep. Wouldn't it have been a more stable uptrend if the nifty and the market in general had consolidated at lower levels for a month or two?
Jaspal

 

[AMITBE]

Dear Amitbe,
I may be wrong, but both, the fall last month and the subsequent retracement this month, apeared to be too steep. Wouldn't it have been a more stable uptrend if the nifty and the market in general had consolidated at lower levels for a month or two?
Jaspal

Hello Colonel, and right you are.
The Nifty has hardly adheared to the profound doctrine of the Middle Path and has taken to living dangerously.
One cannot be sure how long this kind of volatility may last. Bull markets do have a tendency to be volatile where bear markets are more decisive.

For now the pressure is on with buying support at dips.
The proceedings are likely to get choppy at some point if 2634 fails again.

 

[AMITBE]

For today, 2592-2595 are vital to protect, else 2584 again gets into play. 2577-2572-2569 are further below should the need arise.
2617 unless taken firmly right away, may niggle mildly. Then on to 2625-2634 with a couple of soft hurdles along the way. If 2634 is taken, 2641-2645 would be the immediate target.

On breaking 2634 the high so far was 2643 off.
The volatility going on now is the routine for the last day of contracts expiry, however the close hopefully should be above 2635.
There's time still for that.

 

[AMITBE]

The pay-off against the corrective moves that tested lower levels for a couple of sessions, has been excellent.
Strength has been tested in both directions now, where 2563 held firm to the low, and 2625 got taken on the strong bounce back.
With a close at 2635 the Nifty is well set to take higher levels, though this mark has been subject to a lot of pressure buildup in the preceding up move a few weks ago, and the subsequent sharp correction as well. Interestingly, 2635 was also the exact mark from where the charge to 2667 (intraday high) was mounted early October, which was also the beginning of the end of that arm of the rally. History is all important in our theatre, so it's a good idea to take that perspective into account here.
2635 is also placed just beneath the 2641-2645 zone which was the suggested target here yesterday and which was tested too. It's an important area and has to be taken and sustained before the all time high levels are atempted again. The sensible scenario would be a quiet sideways move with 2609-2625 as immediate supports below and a mildly probing higher move to create comfort at 2645, as 2655-2661 is likely to test when things get that far.
2628 is vital to hold today. 2625-2617-2609 are immediate supports.
Above 2645, 2655-2661 mentioned above is the range.

 

[coljaspal]

The sensible scenario would be a quiet sideways move with 2609-2625 as immediate supports below and a mildly probing higher move to create comfort at 2645, as 2655-2661 is likely to test when things get that far.
QUOTE]
Great strength in the Nifty, Amit. And it's not going to follow any sensible path......
Wonder where now from here?
Jaspal