Nifty entering new orbit

Congratulations to one and all on historical events taking shape one after another in the Indian sub-continent. We shall focus on Equity markets only. On 16th May 2014 NIFTY has touched the levels of 7563.

We had come out with our TECHNICAL RESEARCH report in May 2013, when the levels of NIFTY were 5986 and in that report we clearly indicated that NIFTY is going to create history in coming times and with that, we also gave the possible levels which NIFTY might
touch or achieve, in its journey towards upper side. In that research report, we also clearly mentioned the time period in which the NIFTY might top out or make highest top. If one wants to go through that report, can mail me on my mail address written in this report.

For the sake of convenience and understanding, we are hereby giving the levels of NIFTY which we gave in our previous report, which as per our TECHNICAL RESEARCH were expected to be achieved in coming period after May 2013.

First Level        -    6640 – 6720
Second Level    -    7120 – 7280
Third Level        -    7480 – 7596
Fourth Level        -    7920 – 8080

From the date of our Technical Research Report, within the span of twelve months, NIFTY has achieved the third level by hitting the top of 7563, as mentioned by us in our research report. As the third level is been achieved, we believe that now is the right time to come out with another report in continuation of the previous one.

NIFTY gave annual closing at the levels of 6138 in December 2007. It closed at almost near to same levels at 6134 in December 2010 another annual closing. But there was a difference in its annual closing in December 2013 when it closed at the levels of 6304. It was higher than previous two occasions and just near to its all time peak of 6357.

That closing was within the limit of one percentage point from 6357. This annual closing supported our technical research in a big way and gave us idea that 2014 will be the year of equity markets. And what followed next is witnessed by one and all in last four and a half months time after December 2013.

What we believe now is that the fourth level as indicated by us here in above for your reference is also going to be achieved by the markets soon. But here we have to keep in mind that markets are now in overbought zone on all time zone charts, so one should be careful while dealing in the markets. Here we would like to bring to your notice other important findings by us about the expected correction and the percentage thereof.

In 2004, markets had a very good correction by 32.5%. In 2006, markets got corrected by 30.5%. In 2008, we all witnessed a massive correction by 64.5%.

In 2011, we saw a correction of 28.5%.  In 2013, correction was of small magnitude and that was by 18%.

So keeping in mind the trend that market follows, we arrived at the conclusion that, next major correction shall be witnessed by the markets in 2015 only and not before that. There could be round of corrections after every up move, but those corrections will not be of high magnitude.
As on today, RSI on Daily as well as on weekly charts is in overbought zone. On Japanese candlestick pattern, on weekly charts, we have seen one negative pattern that is shooting star at the top. So in nearby period very high probability is there that we might see some correction in the markets before it starts or resumes its journey positively towards exploring new orbit again. But this correction will not be of higher magnitude and if happens, will be very good for the markets.

After the levels that are been achieved today, 7563, we believe that next resistance will come at the levels of 7920 – 8080. And a position or atmosphere of euphoria will be created if NIFTY crosses this range.

In that euphoric scenario, Nifty will find resistance at 8750 and 9600. Final resistance shall be between the ranges of 10038 – 10400. We have used the word final as we believe NIFTY will give major correction, once it manages to reach that range.

From the top levels of 7563, we believe the support for the NIFTY will be first at the levels of 6880 - 6850 followed by another support in the range of 6620 – 6640. Final support for the nifty is in the range of 6300 – 6350. This support of 6300 should not be broken if NIFTY has to resume its journey towards 8000+ levels.

In our next TECHNICAL RESEARCH REPORT, we shall be covering the stocks which could be the best bets to bet on.

-Rajkishore Bang

Astro-Tech Analyst
Cell: 9920202022