Breather !!

Although Nifty recovered a good over-100 pts today, raising optimism that we may witness a pre-budget rally, it seems unlikely that it is anything more than a "breather" i.e. recovery after a huge fall and a preparation to witness a further fall.

On daily, momentum indicators like RSI, Stochastics, MacdH are showing signs of recovery, however, on weekly charts, they are far from exhibiting strength. Add to it, the volumes are not promising so far. Thus, it does not seem like this breather will manage to turn into a bull rally.

As per the breakdown seen on 25 Jan 2010, the target for nifty is approx 4550. From 5100, it was unlikely that Nifty would sink in a single stroke. Hence, this breather.

To sum it up, it seems like the short-term target for Nifty should be 4550-4575. However, for intraday, Nifty should trade in the range of 4920-4795.

Trading with a negative bias would be comfortable. However, it will be apt to blow with the winds. Happy Trading !!




Disclaimer: The said technical analysis is a perception based on various charting methods. Trades on my opinion are to be done solely at your own discretion.