The Market is alternating between up and down days. After yesterday’s rally, the Nifty confounded all trend traders by actually faling down, closing today at the 5450 level.
The Nifty is now locked in a trading range between 5450 and 5550 – this is just a 100 point range, quite the narrowest range in many months. Traders should stay away, avoid trading inside this range. A close above 5550 will suggest a breakout on theupside while a close below 5450 will gie the signs of a breakdown. Just wait and watch. What about investors? Well, if the idea is to invest for at least 3 years, then the current levels are as good as, say, levels 10% lower. If the purpose is to obtain trading gains over the next few months, then buying is not suggested. The Nifty is in a bear market (the correction for the up move from 2200 to 6300, qualifies as a bear market). Lower levels
should come in, although we cannot say when.
What if we are wrong? There is no need to panic, since a breakout above 5550 will give us signals of buying, at least as a short term trade.
What about Japan, Crude, trouble in Bahrain, political problems in India, ….. ?
Well, the Indian market has withstood all of these issues. Thus, we should ignore the news and go with our charts. The charts tell us to wait for a range breakout, so, patience!
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