MEDIUM TERM VIEW OF NIFTY

28, May

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Normally, expanding triangles are completely retraced. In Nifty, expanding triangle started around 2000 region. If Market has to retrace completely, then it should retrace upto 2000 level. If market has to retrace the last leg of the expanding triangle, then it should retrace upto 2500 level. But, so far Nifty retraced upto 2896 level. When compared to other possible corrections, the present correction is a shallow one. Only if market is very strong and the upside is huge, we could see a shallow correction.

If that is the case, then we should not see a downside below 3000 level and also if the conceived pattern is validated, then we could see a huge rally in coming weeks and probably, the rally would be the fastest in this bull market and initially it should move above 3800.

The present view is validated, if and only if, Nifty stays above 3000 level. If that level is violated, then we could see correction extending towards 2500 level.

REVIEW OF SELECT SCRIPS

Scrips like IPCL, CESC, Orchid chemicals, Reliance Energy, S kumars, Himachl, Prism cements were recommended for delivery. These scrips have come down below the stoploss levels. Some might have cut their exposures at stoploss levels and some may be holding these scrips.

The technical reason for the bullishness in these scrips is the formation of running triangle in the charts. The present correction has brought the scrips by one third or half of its value. Even after this correction, the scrips are well within the pattern and exhibit medium and long term bullish strength in the charts.

Those who have cut their exposures at stoploss levels can re-enter at current levels. Those who are holding these stocks can continue to hold. My long term view and the targets of this scrips haven’t changed. Below I have given the stoploss for the scrips for fresh long positions and for those who are holding these stocks.


For IPCL, the previous medium term high of 220 is the stop.
The one third retracement level of 240 is the stop for CESC.
The previous medium term high of 200 is the stop for orchid chemicals.
The level 28 is the stop for both prism cements and Himachl.
The recent low of 47 is the stop for S Kumars.
The previous low of 450 is the stop for Reliance Energy.