Capitalmind
Capitalmind
Actionable insights on equities, fixed-income, macros and personal finance Start 14-Days Free Trial
Actionable investing insights Get Free Trial
General

Nifty Snapshot: Technically Weak But Bounce Expected to 5500 at Expiry

The Nifty has just made a lower high and lower low and rebounded back up. Well below the 50 and 200 day moving averages, the Nifty remains in bearish territory, about 13% off the all time high made in 2010.

Nifty Snapshot(Click for larger picture)

We’ve fallen way below the 18 P/E line which is typically a great buying point, so the fundamentals and technicals collide.

Any rebound should be capped at resistances of 5500 or so (previous points of pullback). Even option volumes seem concentrated around the 5,500 area, and options expiry on Thursday this week, so this point will likely be defended.

With very little data coming our way in the week, the big influences will be international news and the rupee. We have seen a sharp fall in the rupee and the markets recently. The 10 year bond yield rose fell from 9%+ levels down to the 8.26% levels. The rupee recovered during the last part of the day on Friday. However headwinds exist – that Friday pullback might have just been short covering. Let’s see what the week brings us.