Aug 10: Nifty closed by 1% to 4437 a percent down from yesterday's close. In chart pattern it looks to form a double top ( not full but tend to ) may tend to prove this to a long term correction or down trend. From the current fund flow pattern, it is not going to be a very long term 2 - 3 years, but the high volatility times are ahead.
Slow Stock over bought zone and directs a week close towards 4000, breaching this would create a short term down trend which may target for 3600 in two or three weeks.
In contra to stockastics, MACD is well above the zero line and can push the stock in side way rather than sudden fall of 500 and above points. As stockastics are not in support, there wont be huge upside move expected beyond 4600.
In this scenario, option writting at extreams of stockastics is favoured as medium term view along with futures exposture to captalise the small movements in the day trade.
Indicator adjusted probability points for nifty
Downside:
4450 1
4400 0.89
4300 0.74
4200 0.67
4100 0.61
4000 0.52
Upside:
4450 1
4500 0.91
4600 0.7
4700 0.5
4800 0.38
Stocks to watch + : BHEL, SBI, ICICI, RIL,TCS
Stocks on weak note - : UNITECH, DLF,GAIL,SUZLON,HLL,ITC
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