Nifty futures held the previous low zone and we could see the selling momentum weakening in many stocks. We have a short term support lies at the trend line close to 5200-5220 and that zone is expected to hold in the near term. If we come to the modern technical analysis many indicators and oscillators are hiding the basic price and volume action and they are not clearly showing whether we are in the correct position or in a trap. The classic Dow theory says the major index and the corresponding indices should complement each other with a positive correlation and if it is not doing so the move is doubtful. If we follow the same principle we could not see a positive correlation between Bank nifty and nifty at this point of time nifty's recent high was not followed nor lead by bank nifty. Any up move should get arrested on the upside as still some downside targets are left. On the upside nifty started falling from 5360-80 zone and that could be acting as a stiff resistance zone. If we have a look into the US market charts we could see S&P holding the mentioned support zone of 1395-1400 and should be closely watched for any reversal for the downside. The trading range can be 5250-5360.
Stock to watch.
Siemens - The stock is forming a consolidation pattern with a rounding bottom and seems to be a triangle break out on the upside in the weekly chart. A price break out should be confirmed above 685-690 zone with decent volume and we have to wait for that thing to happen. The volume is expected to increase once the price break out happens as it happened in Biocon. The stock is expected to see levels of 720 once it breaks above the previous high with a reversal below 665-670.
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