Nifty after Budget….

As I had mentioned earlier Nifty took a resistance at 4950 levels. On the Budget day Nifty gave a breakout of Inverted Head and Shoulder pattern on daily chart and the target for the same is around 5190 level. 80% pullback of recent fall comes around that level only, so now that level has become crucial resistance. Nifty has created a gap on daily chart around 4930 level so the chances are that the nifty should come down to fill that gap. Nifty gave a break out around that level only so in the next week it will try to retest the support of 4930-50.

As I mentioned in the chart, this is a wave G which will going to finish around 5200-5300 levels. If nifty takes resistance at that level and comes down once again and breaks 4667 level then it confirms the top formation for medium term. This will confirm the major down trend in the market and achieve the lower levels as I have mentioned in my first blog.

But the counts will change if nifty sustains above 5300 levels on closing basis for 2-3 days. If that happens then the next target for Nifty will be 5400-5450 levels. The chances are remote for this scenario as volumes are down though Nifty is going up. So we may consider this as short covering and fresh buying will come only if it sustains above 5300 levels.

If we see sector specific ,following sectors looking well for investment for short term:
Auto, Banking, Capital goods, Healthcare, IT and Metals.

Technically following sectors are looking weak so exit from the stocks on bounce back
FMCG, Oil and Gas, Realty and Telecom.

To conclude, Nifty may give a bounce back up to 5200 levels for short term but the medium term outlook is still bearish. The trend will change only if Nifty sustains above 5300 levels for more than 2 days. Happy Trading!!!!!!!!!