Nifty Views for November 26 - Manoj Bhagra

Hmm… just another news-based gap that got sold in to. CITI! They said never sleeps…, and it looks like its desperately trying harder not to drop dead once and for all….all those sleepless years do take their toll! Any lessons? Yeah one must always make sure one has enough sleep…!

Bad joke? Yeah it is ....need to work on my humor too. Anyway let me just leave CITI and their problems and concentrate on our own markets.

We continued from where we left of on Friday, a strong close of Dow leading to a strong opening of the Asian markets and we followed. Yesterday’s news about the bailout of the CITI, again lead to global euphoria and we as usual, in our exuberance opened gap up but sold out pretty fast too.

I said the road ahead is paved with a lot of resistances and that too pretty mean types, just news won’t help; we need a solid push and that comes with conviction - a commodity bulls are lacking and bears seem to have aplenty.

The daily chart below looks like a picture of calm but much turbulence is going around underneath it. Tough job to even break out of the 20-period moving average. Any break below 2550 might trigger a selloff whereas a break above 2960 might lead us to higher grounds that is if you consider 3060, a ground high enough - some meanies are there with abundant supply - that and we speak again.

Turbulence, I mentioned earlier is more visible in the hourly chart; we have broken down from a channel (if you prefer, you can call it a bear flag; to each his own, as long as you believe in your own). This was preceded by a failure to hold on to the 50-period MA. Once this flopped, the 20-period MA looked like a cakewalk for eager bears.

If we don’t have any surprises from Dow overnight then tomorrow 2665 and 2725 itself might be a Herculean task for the bulls. Speaking about the supports 2625/2600 and 2550, as if they really matter (pardon my cynicism because past action has shown all supports getting blown without a whimper). Actually what really matters is only 2500 and how we react there!

"You have within you right now, everything you need to deal with whatever the world can throw at you." - Brian Tracy