Are we in 2008 Correction Scenario How to Trade Nifty Now

By | August 9, 2011

Are We back in 2008 Crash is what every trader and Investor is talking.

Before talking about Technicals of Nifty lets me talk about some Macro and Fundamental Aspect

Well this correction we are on going right now is not a 2000 deja vu reason being

1. 2008 there was lack of Liquidity in system right now There is ample liquidty in System

2. It was a credit bubble burst in 2008 People were heavily over leveraged.

3. In 2008 there was Lack of Confidence in Finnacial system but now Investor/Private Companies are not having Faith in Government that they can reduce the debt levels and bring the house in order.

4. So there are no Spending from Comapnies on innovation and Infrastructure which in turn is not spurring employment and hence no economic growth. I strongly feel there will be no Second Dip Recession. US companies are sitting on Record Cash levels.

5. From India’s Perspective All things are falling in place

  • S&P Downgrade is good for India as well as Emerging Markets as they can Provide good returns from long term investor.
  • Crude Cooling off will bring Indian Fiscal Situation in control
  • Inflation the Big monster will go down hence Rates will not increase and in turn will be good for Stock Market.
  • At some point prices of assets will become so cheap that they will reawaken the “animal spirits” of both investors and companies.
  • India has been the Worst Performing market this Year because if Crude and Inflation.
  • I Know no levels are sacrosanct but In such bearish scenario we are able to held 5000 Levels is a very good sign.

 

Nifty Hourly

Nifty Hourly Chart has been broken technically. Full of Gaps on downside. Gaps provide excellent trading opportunities .

On Hourly Chart the downside momentum has slowed down and a close above 5097 will make hourly positive.

Indicators are turning up but close above 5097 should be seen.

On Hourly charts Resistance are seen from 5116,5167 and 5232

 

 

 

Nifty Daily

On Daily Charts Markets are deeply oversold as fall is straight from 5740-4956 that’s a straight fall of 14% in matter of 10 trading session.

Correction are always a waterfall decline and will never give you a chance of exiting out.

Hope and Pray are the tool traders who are long are left with.

On Daily Charts we are oversold to the Levels of 2008 panic only difference that time fall happened in matte of 2 days and here the fall happen in 5 trading sessions.

On Daily chart resistance is at 5116,5167 and 5204.

We have huge gap at 5225 and 5330 and which needs to be covered.

Market not willingness to break 5000 is a positive sign and Our markets are not leveraged now in Futures which has been reason why we did not see those 5-8% fall which other Asian markets saw.

 

Nifty Weekly

Nifty Weekly 5110 and 4940 should be held so that we do not fall in waterfall decline or correction mode.

Buy above 5116,5177 and 5230 All Longs should be held with Sl 4946

Sell below 4946 Tgt 4900,4841 and 4800

 

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