It was a big week gone by. The RBI hiked rates by 50 basis points and the markets tanked by 3.4 pc. Gold and Silver along with other commodities fell. The next week is of even more significance. The Election Results will be out next Friday. That would determine the path Markets take.
1. The RBI hiked rates by 50 basis points. This was more than expected and the markets tanked.Expect Banks and Autos to be under strain. The Auto sales dipped for April ad expect this trend to continue.
2. The Petrol prices should be hiked this week. Expect a Rs 3-4 hike in both petrol and diesel prices.
3. The Elections will be out on Friday. West Bengal, Kerala and Assam to the Congress. Tamil Nadu to Jayalalitha. If the Congress fail to win WB or Kerala expect further tanking.
4. Lets take the entire fall from 6339 as a fall out of which we are commencing the Third Wave down.
Wave 1 was 6339 to 5177 - a fall of 1162 points
Wave 2 5177 - 5944 - a rise of 767 points or a 66 pc retracement.
Wave 3 should be a fall of 1162 or 1882 points.
This gives us targets of 4782 or 4062. 4786 was an important bottom made in May last year.
5. Take a look at the weekly charts.A close below 5500 should invite further shorts.
6.The 200 EMA and 200 DMA are upward resistances. They come at 5628 and 5750. The Retracement levels of this fall comes to 5638, 5694 and 5754 which should be resistance marks.
7. Fresh shorts below 5476 or if Nifty fails to move above 5593-5600 levels.