MANY TIMES PEOPLE AVOID STOCKS WHICH ARE FUNDAMENTALLY NOT STRONG, BUT THE MYTH IS TECHNICAL BREAKOUT CAN HINT US ABOUT UPCOMING FUNDAMENTAL DEVELOPMENT, WHICH SOMEONE CAN ASSUME OR EVEN CAN IGNORE.
AS I PERSONALLY BELIEVE THAT ONCE SHOULD INVEST IN A COMPANY WHICH IS STRONG ON CHART, AND HAVING A GOOD SCOPE FOR FUNDAMENTAL DEVELOPMENT IN NEAR FUTURE, BECAUSE SUCH COMPANIES CAN PROVIDE US MULTIPLE GAINS IN SHORTER TIME. AND IF YOU LOOKING TO INVEST IN FUNDAMENTALLY STRONG COMPANIES THEN NEED TO FIND UNDERVALUED STOCKS FOR THIS PURPOSE.
SO MAIN THING I WANT TO DEFINE IS MARKET MOVE WITH THE EXPECTATION FROM PARTICULAR STOCK OR SECTOR, THAT TIME FUNDAMENTAL IS NOT COUNT ONLY PRICE BREAKOUT WE CAN SEE ON CHART, AND AS STOCK MOVES WE SEE IT DEVELOPING FUNDAMENTALLY ALSO, BUT TILL THE TIME YOU LOOK FOR SUCH DEVELOPMENT THAT TIME PRICE MUST HAVE MOVED MUCH HIGHER.
“SO TECHNICAL ANALYSIS IS A SUCH A TOOL WHICH GIVE YOU THE HINT OF FURTHER OR FUTURE DEVELOPMENT IN ANY STOCK OR SECTOR”
For e.g we already said that nifty has given a monthly breakout at 6400 level for target till 10500 level and important news came after that is shri narendra modi become PM, so our chart has already given a market breakout signal which has already assume that modi will be winning the election with majority. So finding the price action can give you hint of future event, rather than taking action after even or any development can risk your money
As we mention last week, that after event we can see a consolidation phase now, as per this view nifty has done consolidation in this week in a range of 7200-7385 range.
As per the chart development last week nifty able to move above its weekly resistance level of 7350 and given a good close in last session, after making some doji candles on chart, last day it given a green candle with the highest close for current week.
Now as per current development we can see that nifty has taken support and trying to move upside now, so this can indicate that, it can try to touch the recent high it made near to 7565 level, but we need to keep the support levels in mind for safetyness, as we observe that market is trading at higher level with rsi still in highly overbought zone, so at this stage we cant say that market will fall, till it not moving below support levels, but yes we can say that it can consolidate in a range for a time being till it can ignore the aggressiveness of indicators and oscillators on chart now.
And if it able to consolidate now then only there are good chances of one more upside breakout.
For current week we can see support levels at 7250-7180-7150 levels if able to move below this levels on closing basis then we can expect a good further correction till 7050-6950-6800 also.
But anyhow, even after consolidation if market take support on given mention level with green candle then upside we can look for 7450-7580-7685 levels in coming days, and again breakout to see above 7700 level, which can give us a fresh level of 7929-8200 also.
So overall view and indication for current week is one can try to sell near resistance level with small risk and again need to buy near support level with small risk, till the time market not breaking the range of 7150-7670 range we can see a direction move in a market in this period.