India Stock Market: Nifty Chart..and a View

Sunday, December 07, 2008

(click on chart for clearer image)
The chart above covers the Nifty from Dec 15, 2007 to Dec 5, 2008...a 60% ride down on the Nifty.  You will recall that I called an inflection point, the start of the bottoming process on November 12, 2008...Bottom Forming...since that day we have traded sideways with extreme volatility.  An inflection point is always marked by extreme volatility...the inflection point is not a point, but rather a period.  In this case it may last 4-6 months...a stock pickers paradise.

The chart shows that Nifty has traded within a 10% band of its 30 day moving it is back within the range.  Furthermore, Nifty is having a tough time breaking through the 30 day moving average (2810 currently).  As a ballmark range around current Nifty, the chart shows that significant selling awaits the market at higher levels...3096 being a upper limit...on the downside, 2535 is near time support for the market.

You will know from my previous posts that my buy-in levels are in the 2500 range...and all of my analysis suggests that Nifty 2500 is fair value.
Nifty Fair Vaue: Equity risk premium
Nifty/Sensex: 2009 Outlook
Nifty Buy-in Levels Reached

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