Tech Musings

My last week call on nifty was almost prophetic. Nifty was trading at 5342 levels when I gave a buy call with a stop of 5050. Nifty moved up 230 points in this week and closed at 5577 levels. If we look at the given chart we can see that the down trend in nifty which started in November 2010 has been broken. Therefore the primary trend for this market  is now on the upside. 

Nifty Weekly chart

I think it’s very likely that we will retest the previous top of 6350 on Nifty. Nifty may also face resistance at retracement levels of 5650 and 5900 levels. Whether Nifty will break 6350 is not very clear now but my gut feeling is that we should reverse from that level. Investors should wait for any pullback to add or create new position in Nifty.

Nifty Weekly chart

Next chart is a monthly chart of Ambuja cement. Just like HUL Ambuja is breaking out from a multiyear consolidation pattern. It had repeatedly taken support at 150 levels. I think the stock is next candidate of runaway rally and may reach 300 from here.

Ambuja cement Monthly chart

Similarly ACC is also on verge of a breakout from multi year consolidation pattern.

ACC Monthly chart

Gold has gained almost 80 USD this week. As we can see from the chart gold is now trading near the trend line resistance. Any pull back towards 1700 can be use to create new positions. 

Gold Weekly

Euro had broken out of a downward sloping wedge. Next target for Euro seems to be around 1.400 levels.  Any pull back can be used to create long position on Euro.

Euro Weekly 

INR corrected severely during this week and have reached the support levels at the trend line. If INR closes below 54 levels on weekly closing basis than we can expect further corrections in INR.

INR

US 10 Year yield chart is very similar to Euro. Its moving in a downward sloping wedge. Once yield breaks above 2% it can move up swiftly towards 3% – 3.5% range. This won’t be very surprising as even after QE2 US 10 year yield moved up from 3% to 4%.

US 10 Year Yield

Over all my view is that risk has receded from the market which has caused the rally in risky assets. Europe is now gradually moving towards a banking union. I would advise my readers not be distracted by the news flow. All countries inherently understand that disintegration of Eruo would be catastrophic for everyone. I think the game changed in last November when Mr. Mario Daraghi was appointed as ECB governor. He discarded the old philosophies and LTRO gave ample proof that all countries agrees in private but oppose the plan in public to pay lip service to maintain their vote banks.  I think no matter how many objections are now raised in public Europe will slowly and gradually move towards a banking union.