Nifty: Short-tem Update August 5 – 8

August 5, 2013 . FundsIndia Desk

In the FundsIndia FREE weekly market outlook webinar held on Friday, we discussed the possibility of a relief rally in the Nifty. The index has seen a one-sided fall with a negative close on eight consecutive trading sessions. This has pushed the Nifty to an oversold region, justifying the case for a potential pull back rally.

Nifty flag

As highlighted in the above daily chart of the Nifty, the index is now headed to an area of support. Any further  fall would present a low-risk opportunity to consider long positions.

The stop loss for the long positions must be placed below the swing low at 5,477 for a possible rally to 5,850-5,900. Those adept at handling derivatives market may consider long positions via the options route.

We also discussed in the webinar that the last minute slide below the double-bottom at 5,680, in the 15-miunte Nifty chart,  is a potential wash-n-rinse of weak or amateur traders. Any pull back today could trigger short-covering and may propel the index closer to our target zone.


From the Bank Nifty daily chart featured above, it is evident that the index is settling down near a crucial target cum support zone. The Bank Nifty could also play a part in helping the Nifty seek higher levels.

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