NIFTY View

Nifty View: January 2014

A Happy New Year to all our readers and followers. May this year be blessed with some amazing trades, good health, happy moments with family and friends and lots of knowledge gained for all of us.
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Our prediction for January, 2014 for the Nifty index is Negative. We believe that Jan '14 will be a month of bears. December is usually a period of low market participation across the global markets. The markets usually move sideways with movements seen only in DII active midcaps. That's the reason we didn't have any trades as the sideways movement is good only for the brokers.

Nifty Daily Chart
On the daily charts, Nifty has formed a medium term top with the exhaustive gap formed at 6415 level. Though as of now we expect no deep correction, Nifty is expected to see 6000 levels in this month with major support in the 6100-6150 zone. This could be followed with a pre-election rally in the months of Feb '14 and Mar '14. The Nifty has formed a H&S pattern and if 6200 breaks, then expect a correction down to 5960 levels (Rising Green Trendline shows the neckline). The break of 6350 levels and the new lifetime highs was seen with a drop in momentum as indicated by the RSI, MACD and Momentum in the below chart.

Nifty showing Negative Momentum
This negative divergence and the exhaustive gap indicate a correction on the cards for the Index. We don't expect a fall below 5900. The current bearish view is seen as a correction in an uptrend. As usual, FED tapering, RBI policy, Inflation stats, GDP growth stats and the Corporate results will be viewed and analysts will keep talking of elections. Stay tuned for trading opportunities. Read our Nifty Predictions here.
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