Nifty for 16 Mar 07

These are my personal musings. These are not in any way meant to be trading advise. To view the full chart, right click and open in a new window.

Normally, when we see a decisive bottom in the market, we see the price making upward gaps rather than downward gaps. As of Friday, we still observe a higher bottom. Therefore, we could conclude that we could see a short term recovery leading into 21 or 22 March. It needs to be seen how strong the recovery is.

However, unfortunately, the banks are still showing considerable weakness, and as such could be a drag on the Nifty. In such a case, I do not expect much strength in the recovery.

We could witness concentrated selling next week, which may allow the Nifty to attract short selling. Therefore, it is suggested that we could wait for more opportune buying opportunities if we are longer term traders. Short term traders could take a fling at buying for a few days.

As a watch word, since the intermediate trend is sideways, hedging could be adopted to avoid disastrous price moves.

Trade happy.