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Nifty: RSI oversold at 30; Time to accumulate

Nooresh Merani | 17 Dec, 2014  | Follow Author | Add to my Favourites 
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Highlights:


- Nifty is now back from overbought zones of 70s RSI to a oversold zone of RSI 30.


- The last time we saw such oversold levels was at 6000 Nifty dip in February.


- Also a lot of channel supports at 8050-8150 and breakout points.


- The last bottom is at 7730. The medium to long term trend remains positive till we stay above it.


- In the near term we may expect a bottoming out at 8050-8150 with a margin of +/- 50 points. Possibly we will see positive divergences in coming few sessions.


- The strategy is to buy around 8050-8150 with a chance of a dip to 7950-8000 also because of some sectoral rotations.


- Bank Nifty which has been an outperformer, can see a dip to 17300-17500 if it sustains below 18000. If that happens a buy on Banks can be initiated in that zone.


- A bounce back target zone is at 8450-8500.


The markets can be very volatile while making such oversold bottoms and even take time. So if one is looking to buy this dip, one needs to be patient and be ready to see some pain too for short time.


This could be a good time for investors sitting on sidelines or even to deploy fresh cash.


P.S: Do note my long term stance is very bullish and ready to digest deep corrections.




About Nooresh Merani
Nooresh is an ace Technical Analyst and is proficient in picking winners from the mid-and small-cap segments. He is the Founder Director of Analyse India (www.analyseindia.com), a firm which has trained more than 800 individuals across India.

For more information please write in to [email protected]

Disclaimer: The author has taken due care and caution to compile and analyse the data. The opinions expressed above are only the views of the author, and not a recommendation to buy or sell. Neither the author nor IndiaNotes.com accept any liability whatsoever arising from the use of any of the above contents.



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