With respect to all technical indicators I am expecting that today is the end of the Nifty pre-election rally for short term.
My reasons
- Nifty is over bought with RSI above 80 for more than one week.
- A rally at all time highs will not sustain when mutual funds are net sellers for very long period.
- FII liquidity is the only driving force for Nifty right now.
- Despite a huge rally there is no retail participation. It may not come untill the election results are out.
- Trend lines on daily charts indicate market at resistance.
- Rupee has consolidated at recent highs. Charts indicate a possible selling in rupee. Which is not good for Nifty
- Nifty PE is at 19.12 which is a bit over bought.
I am expecting market to correct from these levels till the elections. Individual Stocks may rise based on independent reasons but as a whole the market will remain choppy with negative bias. But don't expect any huge fall until elections.
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