Market Updates For 04/06/2012

Nifty Hourly Chart

First half of the Friday's trading session was flat. However market gained momentum in the later half and Nifty closed at 4841 down by 82 points. Global market looks weak and we all have noticed blood bath in wall street.

The breakout above 4955 was short lived and closing below 4955 was the first sign of weakness and closing at 4841 gives an indication that Nifty is likely to test at least its previous low 4788. RSI in hourly chart is in oversold region but let us not try to catch a falling knife let us wait for the reversal indications to appear on charts. Always remember that it is not necessary to identify the exact bottom and many traders fail in doing so. The objective should not be 'buy low and sell high but it should be buy high and sell higher or sell low  and buy lower'.

Nifty Daily Chart

Nifty was range bound from past few trading session. Even now Nifty is in a narrow range of 4800-5000. Nifty is likely to touch 4788 and 4760 which is 78.6% of the rally from 4525 to 5623.  Below 4760 Nifty can go back to 4600 levels.

Short strangle strategy was suggested based on the anticipation that market may remain sideways. But Nifty is looking weak and if Nifty closed below 4760 then we have to exit short strangle.

Nifty Weekly Chart

We have been discussing about the  descending trend line which is supporting Nifty.  Nifty has tested this trend line nearly thrice but managed to stay above it. If Nifty closes below 4800 in coming weeks then we can notice further fall in the market.

Nifty Short Term Targets

One of the readers of this blog has asked me to provide information about short term direction of the Nifty (I am referring short term as 1 to 2 weeks) as it can help many of us in our trading and investment decisions.Here is the expected target :

Nifty Short Term Trend      :   Down  

Nifty Short Term Targets    :   4780-4680 and below

Reversal if closes above*    :   5090

* Please note that reversal levels will be changed periodically.

Open Position

Scrip	Type	Qty	Price	CMP	P/L
SBI June Fut	Short	125	2037	2017	2500

Intraday Trades

Scrip	Type	Qty	Buy Price	Sell Price	P/L
BPCL Fut	Buy	500	690.5		2500
BPCL 700 CE	Sell	500	19		-1000

Thought for the day

Losses are inevitable, losses will occur, losses are necessary. BUT losses must be kept small and we must not allow them to become unmanageably large.