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Charts & Analysis

Nifty Stuck Between 50 and 200 DMA

It’s been a while since I’ve done a snapshot, but the Nifty seems to be coiling in between the two big DMAs. (Daily Moving Averages)

image

Even as the Nifty EPS increases to 291 (standalone), we notice that the market seems to have lost all the momentum it had in the near 24% rise in 2012.

The 50 DMA line has started to dip, while the 200 DMA line is still flat or sloping downwards. After a golden cross (50 crosses over the 200DMA) which happened in late Feb, we have consolidated around the 5100-5300 area. A death cross (50 goes below the 200) is at least 3 months away unless we see a huge dip right now,. Remember though that the consolidation might actually indicate an upmove, not a downmove.

It’s quite strange that we remain this high even with all the stuff waiting to hit us, from bank NPAs to a slowing economy to a depreciating rupee to a rising fiscal or current account deficit. The market doesn’t to care.

  • IsItPossible says:

    For now it looks like Nifty has:
    – support from MA(200)
    – trend line drawn from peak of late 2010
    A very nice consolidation after a nice run early this year might set NIFTY for next leg up…