Nifty for 23 May 08

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.

The chart says it all. The steady uptrend of the last two odd months has finally been broken. This break is unhealthy for the longer term trend of the Index.

The sentiment has indeed turned sharply negative in the last two trading sessions alone. What was looking like a correction now seems to be a fresh downward move. This may allow the Nifty to move to the lower end of the short term down-sloping channel ~4850. If that is true, then our earlier check points of ~4934 and ~4923 would be violated.

It is now advisable to give up bullish hopes for some time. Wait patiently until we see a definite bull pattern, and then only take long positions. For those who are already long, it is suggested to place stops as each trader’s comfort level allows.

Last week, it was suggested that we have a cycle in time falling on 25 May 08. Let us see what this cycle brings.

We may even see panic.

Trade happy after planning your trade.