Nifty View for 08.10.2012

Spot Nifty had a quite a bit of drama causing panic on Friday with the investors facing the tunes. It was a freak done on spot nifty and nifty futures were unaffected. It will make our life easy to forget it and continue our work of analysis ahead on nifty. On the daily charts we see a bearish engulfing candle which is an short term bearish pattern with possible confirmation on Monday with a close below the lows of Friday. On Nifty Futures weekly charts, we can see an inverted hammer at the top of the rally. This is another bearish indication and the target for Nifty futures may be around 5550 in the next few sessions. On charts of nifty futures above I have taken three separate ranges of fibo expansions. The targets are the 100% targets of the biggest range(Aqua colour) is at 5862 as resistance nearly hit on Friday at 5855.60. The smallest range(Red colour) fibo extensions of 1.618% is at 5933 is another potential resistance. The middle range(Yellow colour) fibo extensions of 1.618% is at 6008 which a big resistance level psychologically. After either of these two targets are achieved further ahead and then we may see some correction. Else we may see correction from Monday as the first target of 5862 was nearly achieved on Friday. The corrections may end at levels  are 5668-5637-5627-5550 which may see on breach of 5728 initally. Trend players can keep stop loss of 5738. Intraday Traders can look at levels on spot nifty to trade on Monday.

No trade between 5769 and 5807(To avoid whipsaws)

Buy above 5807 sl of 5787

targets 5826-5845(add positions, breakout on the upside),

5864-5883-5902-5921-5940.

Sell below 5769  sl of 5789

targets 5750-5731(add positions,breakout on the downside)

5712-5693-5674-5655-5636.

Happy Trading !!!