(Please read the analysis based on the same chart on 19-23 December. As it is a continuation based on the same chart it is better to have an idea about what i said in the previous chart)
Nifty had a smart pull back rally from 4530 levels and we are at some major resistance points.Lets have a look into the weekly chart.As of now the chart is saying that it is a usual bear market rally and we have a reversal above 5130-50 levels where we can say it is a temporary stop to this bear market.As i said in the previous chart about the long term pattern i mentioned a reversal point above 4840 levels.Thus if we could be a buyer in the current rally it would have been above 4840 levels as it was a key reversal point in the short term.(Please read the chart of December 19-23 , 2011 for better understanding).If we look at the short term charts we have some important fibonacci numbers at 5050 and 5150 levels thus it calls for a retracement towards 4800-4850 levels.As an investor it would be a normal profit booking session and even if it retraces it would still qualify for a higher top higher bottom scenario. Thus investors are advised to buy the dips and should not leave any opportunity if you are considering an investment horizon of 3-5 years.As history tells one should buy the blue chips on those bottoms where we can see panic selling or selling climax points.People searching for market bottoms are just like answering a question in a quiz competition. Nobody gets any reward for picking the bottom and it is time to use investors wisdom where value buying is possible.As i mentioned in the previous post in December 4300-4500 could be bottom level for me it reached almost 4530 and many of the stocks were at attractive levels. During my previous posts i was mentioning about only 2-3 stocks for investment, they are Coal india ( around 300-310), ICICI bank (650-700) and YES bank around 250-260.Another sector i'm quite bullish is the infra space where it has spent enough time at the bottom. There are some smaller stocks which are attractive at these levels , they are HDIL,IDBI bank , Escorts and LITL. These smaller one's are for a larger horizon of 3-5 years.Another interesting stock that has not rallied till now would be Bhushan steel.It is consolidating at lower levels for quite a long time and will give a break out above 355.It is always good to notice that if the stock has a larger consolidation period the upmove would be very good.As an investor i would like to exit FMCG, Pharma and Cement sector stocks and banking would be the sector to concentrate in the coming years.
As per time cycle it would be a range bound market till the first week of February and Feb 8-10 are some important dates to watch out for a major move
