Chart of the Day

Chart says everything. Good budget bad budget as per Bollinger we should head to 8200 8300.

Budget to provide further triggers

The markets corrected near settlement and that leaves us with several interesting possibilities.

1. Nifty corrected from 8598 to 7893 and we are merely retracing this up move before we head down.

2. We are retracing the entire down move from 8968 to 7893 before heading down.

3. We are in a fresh up move for new highs.

Now. possibility 1 gets nullified above 8457. The next probability of 8968 to 7893 has upward targets of 8437 8557 and 8753.

The 3rd possibility comes into the picture only after 8753. Now all these are just numbers how do we make them work for us?

8000 to 8200 zone is the best place to deploy the funds. One can invest say 70 pc of funds and remaining 30 pc can be invested below 7800 or above 8600.

Now, if the correction which began on Thursday has following targets of 8326, 8244, 8177 and 8110. The targets by the time we reach the budget session are  8500-8600 if the correction is short and swift.

Now. for the budget if we look only by numbers, there are 2 possibilites:

1. We are at 8100 8200 by the time budget is here and then rally to 8600
2. We rally till 8600 and then correct post the budget.

In any case 8100-8200 is buying time on the Nifty.

Markets likely to remain sideways with upwards bias till the Budget

The markets continued their upwards march in spite of FII selling. Technically, the markets have retraced the last fall in faster time which means the correction is over for the moment.

1. The midcaps and small caps are going up faster than the large cap, this implies correction on pause for the moment.

2. 8968 to 8002 was A, 8002 to 8598 was B and C is ongoing.

C X is over from 8598 to 7893 and we are retracing this leg which can go up to 8457. Retracement levels are 8162, 8245 and 8328,

Once this up move is over maybe post budget the correction can resume.

3. The FIIs are continuing to sell but the selling is getting absorbed by the DIIs flush with SIP money.

We may have a correction to 8100 which may be the base for a 200-300 point rally.

FIIs continue to Sell

The markets rose this week but the FIIs continued to sell. Amy upmove will remain shortlived till the FIIs do not begin to buy again.

1. The year end NAV dressing took the markets up. FII settlement played a key part in the up move. Now, is the up move just a corrective up move or is it a fresh rise.

2. As per Elliot 50 pc retracement is 7891 and 61 pc is 7650. The previous corrective up move we could have said 1 leg was pending if 7916 was not broken.

3. What seems likely is the corrective up move ended at 8274 and a fresh down move has unfolded and we are correcting the fall from 8274 to 7893.

4. 8250 to 8300 has many resistances and one needs to watch out these levels.

5. Every dip is a buying opportunity.

6. Considering Gold prices, very long term investors can consider buying a bit of Gold in their portfolios.

The New Year has begun and from Monday the picture will be clearer where the markets will go from here. The Budget is 1 month early this time on 1st of Feb so a pre budget rally may soon start.

Modi has given the indications of a populist budget, let us see if it cheers the markets though populism seldom cheers the markets.