Nifty Weekly Forecast From April 30, 2012 - Market continues its down move! (Expected Trading Range: 4995 - 5229)

Apr 27, 2012 - Nifty closed today at 5190.60 which is about 100 points down (1.89%) from the last week close of 5290.85 on Apr 20, 2012. Nifty was trading between 5150.30 add 5310.55 that is the swing of 156.25 points.

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Last Week Analysis - S&P downgrades India - Stable to Negative

S&P downgraded indian market outlook from stable to negative that pushed the market down and closed in red.

Oil prices have been gone up so fast in the last 6 months. During election year, oil prices will be trading at low levels historically due to polictial interest. Besides rising dollar is the key factor now. Market bottom will be seen around election that is where when everything goes down except US$.

FYI - France will hold presidential elections on April 22 and May 6, followed by general elections in June.
US will hold presidential elections on Nov 06, 2012.

With respect to US long term treasury prices, TLT closed today at 117.29 which is 22 cents up for the week compared to last week close of 117.07. US treasury is bit late to good buy now since it bounced a lot this week. But if you are short on US treasuries, you have to liquidate your short position. US treasuries (Ticker: TLT) TLT upside is huge now that is towards 125-130.

Even though market moved up, treasuries prices stayed flat signalling that downside is imminent.

Last Week Low: 5150.30
Last Week High: 5310.55

It is time to liquidate all of your long positions on Nifty and create new short position. We do not have any history of running into bull market crossing over 200 days EMA in one shot. It has to go through a couple of retesting. Still market has to go through lots of bad news from Euro Zone, downgrades, unemployment, etc.

If you are conservative investors, hold currency or indian T-Bills rather than creating short position on Nifty. You can take long positions on Nifty between 4000 and 4500. Nifty might experience a double dip in Indian Market along with world market correction in the long term (about one and half years). With double dip, Nifty is expected to touch 2600 levels set on Oct 2008 and Mar 2009. Wait for some more time to get more clues on "double dip on Nifty"

For Speculators and Intraday Players - Options Strip

1. Buy 2X OTM put option and 1X OTM call option - Options Strip.

2. Short Stocks and stop loss orders.

3. Short Stocks with long call options

Note: OTM - means Outside the money.

Technical Indicators

10 days EMA: 5228.63
21 days EMA: 5250.15
50 days EMA: 5249.55
200 days EMA: 5219.84

Next Resistance Levels:

Strong Resistence level at: 5360.70 - Set on Oct 28, 2011

Strong Resistence level at: 5633.95 - Set on Jul 22, 2011

Strong Resistence level at: 5884.70 - Set on Apr 28, 2011

Strong Resistence level at: 6134.50 - Set on Dec 31, 2010

Strong Resistence level at: 6274.30 - Set on Jan 04, 2008

Strong Resistence level at: 6312.45 - Set on Nov 05, 2010 (Double Top of Jan 04, 2008)

Next Support Levels:

Minor support level at 5219.84 set by 200 days EMA

Minor support level at 5249.84 set by 50 days EMA

Support Level at 5000.00 set by psychological level

Strong support level at 4718.00 set on Feb 05, 2010

Strong support level at 4639.10 set on Nov 24, 2011

Minor Support level at 4531.15 set on Dec 20, 2011

Strong support level at 4003.90 set on Jul 10, 2009

Strong support level at 2620.10 set on Mar 06, 2009 Will reach here with double dip

Strong support level at 2584.00 set on Oct 24, 2008 Will reach here with double dip