- Wealth PMS
The Nifty crossing the 200 Day Moving Average today, ending at 5,236 and breaking back up after exactly 9 months (the cross-under was May 1, 2011). Maybe it was a pregnant bear market.
(Click for larger picture)
Even the technical chart shows that we are at an inflexion point:
The current level is just about where the action has reversed in the recent past (though we have seen one move in October go all the way to the 5400 levels before coming back).
The MACD shows some leveling out from this point, with the downside crossover looking imminent. It’s just quite likely the upmove consolidates here before making the next move – up or down. A call spread above 5400 would be nice, but prices right now aren’t too exciting at Rs. 48 for the 5400 call. But that would be the trade, at this point – write the 5400 call, buy the 5500 or 5600 call, if the pricing gets attractive.