Elections and the Nifty.

I have a new post in Practical Technical Analysis on day traders preparation . The post is a little difficult to read, but is probably worth the effort if you read it a couple of times.

A 600 point rally after the elections has changed the support and resistance levels for the Nifty.The threshold has moved up by 600 points. Thus, the lows of 2200 seen in October should now be considered 2800. A resistance expected in the 3800 – 3900 zone is now seen at 4400 – 4500. Earlier, I was looking at a dip to 3150 support. This probably changes to 3700 – 3800 now. The election is a rare event which raises the threshold of hope in the market.

Is this a bull market? Instead of classifying it in ‘bull’ or ‘bear’ terms, I am thinking that this is a market in an uptrend. This makes it easier to identify the direction in which trading opportunities lie -UP.

I also believe that our market remains coupled with international markets. All of talk of a ‘Game Changer’ is probbaly just talk. If world markets continue to go up, we will join the fun. If they begin a correction, we will probably correct with them.

Agra: I will be in Agra on May 30 for the CNBC Investor Camp.

afraidtotrade.com has an analysis on the intermediate outlook of the Nifty. It says “Thus, the 4,470 level holds key significance to the market in terms of likely overhead resistance that must be cleared”. and…. “Let’s keep watching this powerful index to see if we can sustain these higher prices (which now seems likely) and note how far sellers bring the index down on any sort of expected pullback.” The moving average pattern on the weekly – “The moving average structure – which always lags price – is still in the most bearish orientation possible (20 under the 50 which is under the 200) though we’re seeing the 20 EMA race up to break above the 50 EMA soon, provided that price holds above the 50 EMA over the next few weeks.”