Wednesday, July 31, 2013

Nifty Crashed below 5744 as anticipated by us few weeks back.. Daily updates on Facebook & twitter

Nifty Update : On 15th July Update,we mentioned that Nifty is unlikely to sustain above 5981 levels.Due to index management by Foreign Investors ( buying into HLL & ITC),nifty managed to close above 5981 but the breakout was false.We are back at trading within range of 5525-5981.Nifty has formed classical H&S pattern on daily & weekly chart.Neck line of this formation is placed @ 5480-5525.Should nifty break 5744 & 5585 on closing basis & further breach the neckline @ 5480-5525 level on weekly basis,then all bets are off & nifty may further see savage fall of 450-550 points with probable targets at 5225 & 4980.This down fall can coincide with Rupee weakening to levels above 61.50/62.00 or renewed fears in Euro zone/US markets/political development in India.On flip side,should RBI come out with a positive policy, Nifty can retrace back to 5981 levels.Nifty support levels 5744/5525.Nifty resistance levels 5981/6092. RBI on its part has done enough to pull back rupee below 60 levels.RBI at this point in time cannot do much on monetary easing and lot depends on Govt policy measures.Lack of proactive measures by GOI on economic front has lead to destruction of confidence among Global Investors in Indian Growth story & downgrade threats are looming large.With Corporates sitting on high debts & rising NPAs,India could well have her own Sub prime like Crisis if situation goes out of hand w.r.t Rupee & CAD/fiscal deficit.Though such scenario is not in the immediate horizon,the next govt formation or next elections will decide the course of Indian economy.India needs Govt with a clear majority that can provide decisive leadership to the country.Selective IT,Pharma & FMGC stocks are holding Nifty to its current level.Yet this effervescence in Nifty belies some hard facts that sooner or later the P/e valuation of IT/Pharma/FMGC stocks will reach to a saturation point & ETFs/FIIs portfolio will start liquidating their profitable positions.Besides, there are some headwinds for IT sector in form of new regulations & FMGC sector may see margin squeeze if domestic consumption tapers off.It is very important that Core sectors viz Energy,Infra & Manufacturing starts performing because India Growth story is more of a domestic play.For daily nifty trading levels with Ace Trading Table check out

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