200 HMA-gic: Magician at Work

Is there some magician who has cast his spell on the stock markets? Looking at the amazing lows of the Nifty today, it appears very likely. Today's low on Nifty spot is again bang on the 200 Hourly MA that was mentioned a couple of days ago.

A support level becomes a serious support level after getting retested. This is exactly what happened today. If bulls are standing at this level, what will bears do?

They have two alternatives:

• Retreat back a bit, take a start a la Shoaib Akhtar and make one more attempt on this level;
• Just run away (as in start covering shorts).

It would be curious to see which one will take the markets up now, if this level holds. Will it be bears who will take the market up, or fresh buying by bulls? Unfortunately, this answer will be available only after 9.55 am tomorrow. If long overnight, use 4940 Nifty Spot as a stoploss level and stay long. It does not matter who you are riding with: retreating bears or new bulls.

Interestingly, the Dow is behaving exactly the way Nifty is, up 100 points after just 25 minutes of trade today. If Dow closes strong, expect a strong opening tomorrow, and enjoy the 200 HMA-gic.

Potential Nifty targets are marked in the next chart, which at this point in time would be very difficult for most people to believe.

Keep the faith and enjoy the Nifty tomorrow. The 200-HMA magician could conjure up some really good tricks for you.

Cheers.