Nifty Weekly Analysis: 10 Feb and Ahead

Nifty Daily Chart
For the coming week, the immediate hurdle for Nifty is the 6097-6110 range. If Nifty fails to cross this range, it could slip towards 6030 levels which is a strong support zone. Last week, Nifty saw fast crashes of 20-30-40 points in intraday triggering all stoplosses but recoveries came in soon. Nifty Futures premium too fell sharply which means that bears have not given up now. If Nifty crosses 6110, we can see an upmove till 6130-6140 levels which is the previous swing low. Above it, Nifty could rise till 6190 levels. 6200-6260 is a major gap and many traders will have eye on this gap to be filled though we shouldn't blindly trade on gap fill theories. The markets had left gaps near 5200-5400 levels in late 2013 which trapped many bears. Nifty has found strong support near 6000 level and Bulls are stepping in on any fall near this level. The upside for Nifty seems limited with major technical resistances. We maintain our view that the exhaustion gap of 9th December, 2013 is a medium term top and till Nifty consistently closes above 6350 levels, the strength in the market is limited. However, as the chart shows that Nifty is forming candles with big lower shadows, it shows that Nifty is unable to sustain intraday falls. Only on a close below 5970, Nifty will see another 200+ point downmove.

i) BUY above 6110, SL: 6095, TGT: 6130
ii) BUY above 6150, SL: 6130, TGT: 6190
iii) BUY above 6200, SL: 6180, TGT: 6250
iv) SELL below 5970, SL: 5990, TGT: 5930
v) SELL below 5900, SL: 5930, TGT: 5850-5800

Nifty Weekly
The weekly chart of Nifty shows a tight range of 5930-6330 being formed. On a weekly close above/below any of these levels, the market will enter a medium term trend accordingly.

CNX IT Weekly Chart
On the weekly charts, we had earlier posted that CNX IT has been forming an inverted hammer which signals a top formation. This weeks big drop which saw the IT index fall 300-350 points signals a medium term top. The IT index could eventually correct down to 9100-8600 levels in the coming months once 9500 breaks. But if the index manages to close above 10200 on a weekly basis, the top will break and the upmove continues. The IT index has greatly supported the Nifty and weakness in it can add pressure to the markets.

Read our stock picks for the coming week here.
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