At the end of the last week Nifty Futures made a candlestic pattern named as Doji Star, indicating further weakness below last weeks low of 3585.I would like to reiterate that the region of 3750 to 3850 has following multiple hurdles, which market may not be easily overcome.
1. Mid point of 5271 and 2228 = 3749.50
2. Previous low of 3761 made during the week ended 19.7.2008.
3. Two trend lines indicated in the attached chart.
Next week will have lot of contradicitons for the market, as we have bullish close in US and other markets - suggesting bullish open on Monday. where as our market will start getting jitters for the outcome of Govt formation, the announcement for which will come only after the week is over.
If weekly chart is any indication - the signals given by the chart do not augur well for the coming weeks. It is therefore advisable to trade with caution and short position already made should have a stop loss of 3660. In the event of market going upto the region of 3750-3850, one can sell future and buy a call of 3800 or 3900. Please do not have any naked short position.
Happy trading,
Ketan Asher.
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