Nifty week ahead (09/12/13 to 13/12/13)

• Last week snap shot of Nifty

Nifty	Open	High	Low	Close	Volume	FII-Net	Swing	Diff
Immediate-Week	6171	6300	6150	6260	328.78	3375	150	89
Previous-Week	6036	6183	6030	6176	318.01	1251	153	140

• Key events (India):-

1. Election results and Impact
2. FII action and rupee movement
3. November Trade data (Tuesday)
4. CPI data

• Key events (Global-US):-

1. 13^th December dead line on US budget discussions
2. Expectations on FOMC meeting on Dec 17^th and 18th

• Technical assumptions:-

Technically Nifty looks all set to test record highs this week in the beginning, but whether that will be sustained is doubtful as RSI indicator suggests Nifty moving in to over sold territory and even MACD weekly suggests negative divergence , both points to non sustenance of upward momentum beyond first few days of the week.

Further momentum will depend on Fed related news and final outcome of state elections including seats and formation of government.

Initially 6259 levels will be crucial for Nifty to hold to register highs in the first few days and further it should be between 6119-6344 levels. Worst for Nifty won’t be below 6094 levels and highs can be even high as 6500.

Fibonacci levels:-

Fibonacci levels	Nifty Levels
23.60%	4958
38.20%	5222
50.00%	5435
61.80%	5648
76.40%	5912
100%	6339
138.20%	7030
161.80%	7456
261.80%	9264
423.60%	12190

Support and resistance levels for Nifty:-

S&R	No	Levels	Strength
Support	1	6232-55	2
Support	2	6214	1
Support	3	6119-48	3
Support	4	6094-97	2
Resistance	1	6339-44	4

Broader Range:-

		Low	High
Broader Range		6038	6515

Basic trading ideas:-

• Be aware of the news around the globe and watch market charts daily before placing trade.
• For swing trades (One or two days) buy/sell around 20 points from support or resistance and keep a stop 20 points and earning target of 40 points.
• Use Support /Resistance levels to make buying and selling decisions (Trade).
• Buy when Nifty reverses from strong support levels.
• Buy when Nifty breaks a strong resistance and moves above.
• Sell when Nifty is near to a strong resistance levels.
• Sell when Nifty breaks a strong support and moves below.
• Risk: Reward ratio should be minimum 1:2.
• Stop loss should be not more than 2% of the total trading capital.

(This blog is written purely on my understanding of NSE-Nifty 50 stock market and views expressed are purely personal and not meant for any advisory services).