Earlier this week on Karnataka Elections result day markets showed a roller coaster ride, after initial exuberance markets rose by 300 points ,but could not sustain on the elevated levels and witnessed a profit booking led sell off, it possibly gave all the gains and ended in RED forming a crucial "Shooting Star" Pattern on Daily charts.Keeping in view the rising Dollar(Weakening Rupee), Boiling Oil prices, and soaring Core inflation and possibly the bounce back from 10000 levels ,participants doesn't seem to be in hurry to take out the all time high. Whereas we are likely to witness some selling pressure in coming days.
We have been in selling mode for this whole week.Nifty has now formed a "Bearish Engulfing" pattern on weekly charts further triggering negative sentiments amongst traders.On immediate basis we could possibly take support around 10550 violation of which might take us down to 10110 levels. Here 10000 levels has become a psychological buying zone ,where Nifty can form a double bottom and take the further course,after the bounce from the psychological level we have retraced to 78.6 Fib level, which in most cases have proven to be crucial reversal levels.Keeping in view earnings season traders are advised to stay away from Midcaps , PSU Banks Power Companies And Weak Sectors.
We are still in an expensive market, and liquidity is driving us there ,as liquidity shrinks, we shall witness sub 10000 levels.The resignation of Yeddyurappa is likely to cast a shadow on Monday on our markets.
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