NIFTY is almost 250 points down from its recent high of 5630. So is the party over?
Lets look at the chart.
NIFTY is very close to its 21 EMA which is hardly a support if you are of long term view. One positive here is 50 EMA has just crossed 200 EMA from below but it has to sustain so for some time to take this cross over as definitive.
MACD is trending down and MACD line has crossed the signal line from top and is going down sharply. RSI however is in no man's land.
If NIFTY has to go down, then the downward trendline of the channel which was a resistance earlier will act as a support and presently it is located close to 5250 levels.
My call... we may consolidate for some time around this level. Europe is more or less at the same position and doesn't seems to be getting worse with the same speed as earlier. Today is also the second LTRO day and a positive one too. More than 500 Billion Euro have been applied for by more than 800 Banks. It is much more encouraging than the first one. Not only the nos are bigger but also many smaller banks have applied which can make different to actual root level economic activity.
Good part of this money will also flow to us and may at least help restrict the downside. Keep your fingers crossed...
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