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Friday, September 21, 2012

Nifty :Strong blast

Did not expect this strong blast . Don't really know where its headed right now. Only thing I am hoping at this time is that October 1st week or may be 2nd we should get a good buy opportunity. But how is the market gonna behave till then . How high is it going from here. Difficult to say. If I say that October 1st week we should get a very good BUY opportunity , then we should see some correction . But when will the correction start and how high can this market go?

We see from the above chart DMI( Directional movement index ) and the ATR behaving very similar to 2010 September period. The green graph in the first indicator(DMI) has been absolutely stretched( look at the down arrow). The ATR ( 2nd indicator) is also rising in a similar manner. After the point shown by the down arrow corresponding to today's action in markets...the markets kept on going higher for around 200 more points before a meaningful correction set in from 6030 to 6223. If the same thing repeats we might see around 5935 in a couple of sessions before we see a correction heading into October 1st week or may be 2nd. 

Defty today has crossed a very important trendline resistance. Used 2 good indicators in the chart below CMO(34) is yet to get overbought . And CCI(34) is way above the 100 line . The markets could go u till the CCI(34) comes from above the +100 line and touches the 100 line itself. Using this logic we see that markets have some distance to go up. 

Another chart is this USD -INR chart . The blue trend line support has just been broken today . But just by a bit though. A RED  channel might give support if this continues to go down . And that support might come around the green line at 52.620.

I know the markets are overbought . But the markets can easily touch 5940 in 2 days time in this overbought condition too . But if still in doubt people might stay away and we should be going LONG in  October. 

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