Nifty Technical Analysis for the week 22nd November 2011-High Alert Signalled?

Nifty seems in a hurry to signal high alert below 4700. Previous low registered on Aug-2nd-2010 at 4675. Nifty continuously falling from 8 session without even a relief rally. Sharp fall in the Rupee touching Rs52.22 per dollar registering all-time low figures has been a big concern for the markets and higher inflation adds fuel to the fire. It is advisable for the investors to take a pause if Nifty cracks down 4670-4700. Market always gives opportunities and there is no hurry for the investors to participate at those panic figures.

So, which is the best level for the investors to enter?

Well, as you can observe, Stocks fell almost 40% where as Index fell only 19% till now if you take these figures from 5800 fall. These figures of stocks are the ones when Index was 4000. There is no surprise if there are also stocks which lost even more than 70%, no matter because of news, speculation or technical breakdown or whatever. So those who want to start investing should be very careful right now to analyze all the fundamental values of the business the particular stock or equity is in. I would suggest take a pause without hurrying now to participate in the investors queue. Let the rupee and inflation be stabilized. Last but not the least, Europe crisis still puts investors in dilemma globally.

Technical Levels

As you can see in the chart that there has been a perfect bearish channel. Now the lower trend-line support comes at 4500 but I feel this will be achieved only when Nifty cracks below 4670-4700.

4670 – 4730 – 4810 – 4880

I suggest positional longs only above 4960. Till then it is advisable to short each and every rally. In other words, short on rise. But, from Open Interest View point huge OI is written at 4700 put. So, for this series will this be the support level? or, will it continue to fall without respecting it?

Open Interest