Nifty and Bank Nifty Technical Analysis for 17 Oct’13

Nifty as on 15 Oct’13– 6089.05 (-23.65)    Bank Nifty as on 15 Oct’13– 10389.30 (-275.95)

We don’t know whether to prove us right or whether to prove us wrong, market is the best judge and price is supreme, and our readers and subscriber knows that we always try to remain genuine with our work.

When market is looking positive, you don’t bet on going short, if you are going then you must have big pocket, or else you are just speculating. We sincerely, believe that market has a potential to test 6229 levels. Now, see how market works, it opens gap up and remained positive for a while, and then start giving up the gains, in simple words we can call this move as pullback, and suddenly market starts plummeting sharply and still you don’t dare to go short (because, your underlying thought is- market has a potential to go high) and your prove wrong. Similar was the case with Bank Nifty.

Frankly, we are disappointed by price action in last few weeks, as you can’t dare to take any positional call on the market, if you are taking then you are betting or may be speculating (that is what our perception is, super genius and indigenous please excuse us)

What next, Nifty has given Bearish Engulfing Pattern; Bank Nifty has Bearish Engulfing Pattern with Long Body, while CNX IT Index has given Spinning Top at Fresh High Levels. What does this all indicate? Exhaustion of Trend, Potential Reversal Patterns, Supply Pressure from Higher Levels, Exit Longs, Don’t build Fresh Longs, if you have deep Pockets than start Building Short Position, so on so forth.

Now, we come to our understanding, why we were thinking that market has potential to go further high. Because, if we see price action of Bank Nifty, then it has already corrected more than 30% from the highs, now here pullback can’t be overruled, Secondly, if we see CNX IT Index recent price action than, even though it has shown many reversal candles and divergences, it has not fallen, remained range bound and subsequently moved higher. At the same time some defensive stocks continue to surge higher. Keeping this broader scenario in perspective we thought market has potential to move higher. Otherwise, we very well know that we are near top and there is limited upside, and for long term trader risk-reward will be in favor of going short.

Price levels will be updated in next post.

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