.: Technical view by Nooresh on Sensex/Stocks/Commodities

Friday, 8 August 2014

Technical view by Nooresh on Sensex/Stocks/Commodities

Nifty and Dow Jones – Hanging around supports

Posted: 08 Aug 2014 12:14 AM PDT

Nifty Technical View

-> Channel Support at 7500-7550

-> 50 dema at 7500-7550.

-> Previous bottom at 7420.

A short term bounce could be in the offing in near term from 7500-7550. But a support does not imply it always hold so looking at what if the support fails to hold up.

-> Breakdown confirmation below 7450-7500. Can go long with stoploss accordingly.

-> Downside risk in case of breakdown. Channel size= 350-400 points.

-> Possible targets on breakdown 7000-7200.

The upside momentum can come on crossing above 7750.

Strategy :

As mentioned before avoid leverage and trade less. This is a correction which is very much needed. It could get sideways to down for some time.

Investors should continue to relax and hunt for opportunities in midcaps/smallcaps. As i have been mentioning since March-April that one should increase capital into equities going ahead.

Go ahead do your research and start accumulating quality stocks as many have started dipping and can dip further going ahead.

Will try to post a few interesting picks over the next few days. ( Cannot share all as we do have our advisory services)

Large Cap stocks on Radar – Reliance Inds & Larsen and Toubro.

The reason am not really scared or worried like everyone on the street is when we try to put pessimistic expected prices in the Nifty Calculator the range comes to 6800-7200. This i believe is healthy and bearable for a trader and investor.

( Did not try an optimistic target though )

Some Thoughts

Nifty has corrected only 200-250 points from peak but stocks have fallen a good 15-25% from peak as well as there are a set of stocks which are crossing into fresh breakouts.

So both set of opportunities – buying on dips and fresh breakouts is available.

Expect more of a timewise correction with base at 7450-7500 and 7000-7200 in case of some selling pressure.

So would actually be looking at reversal signals from 7450-7550.

One of the reasons looking for a reversal – when everyone wants a correction will the market oblige ?

This is a warning chart which we sent to our subscribers 2 weeks back at 7800.

Dow Jones Technical View