Wednesday, May 23, 2012

Nifty Outlook May 23, 2012

My observation about tomorrow is as follows
  • Ugly bottom is in making
  • Rs is at all time high
  • RSI reading is lowest in recent past in weekly chart
  • 4955 is first huddle to cross for bulls
  • 200 Week SMA is at 4822
  • Highest continuous (5th week) down on weekly basis
  • RBI announces OMO of 12K, which may provide strength to weak Rs.
My conclusion, Nifty is very near to making bottom. Though one should not forgot, that no one is perfect and everybody trade his belief not market. Often we misinterpret about bottom. We start thinking that market will take "V" kind of reversal all the time whenever it will bottom out. However most of the time either it will be ugly bottom or "U" shaped bottom. Hence please have patience to cool down nifty before moving higher.

"RBI conducts OMOs either to soften bond yields or pump in more liquidity. This time, it is aimed at curbing rupee depreciation by giving rupee liquidity support," said A D M Chavali, executive director, Indian Overseas Bank. OMO will took place on Friday, May 25th

Resistance: 4955 > 4920  > 4906
Support:     4822  >  4788 > 4750