Has the NIFTY bottomed out?

NIFTY Technical Analysis

On 12th June 2015 the NIFTY closed at 7982.9 well below the 200 day EMA of 8199.72. The Bollinger band is between a high of 8580.53, a mid-point of 8251.44 and a low of 7922.35. The MACD is at -83.58. The ST-MI is at -51.64. The RSI is at 36.12.

NIFTY Chart 12-06-2015
NIFTY Chart as on 12-06-2015

For the trend to reverse the index has to convincingly rise about 300 points from present level to above 8251.44, the RSI above 50, MACD and ST-MI above 0.  

The stock markets are in a secular downward spiral. The NIFTY is decisively below its 200 days exponential moving average. All the sector indices are below their respective 200 days exponential moving average.  From technical analysis view-point, the 200 days either SMA or EMA is the bottom from which prices bounce upwards. But if the 200 DMA is decisively broken, as it now has, it becomes the resistance level. With the earning season almost over, the corporate performance results not being heart warming and no positive trigger on the horizon, in the short run the markets appear to be in a hibernation mode. The markets have been impacted by domestic factors such as poor corporate performance, the honeymoon with a stable government at the center over, expectations of steps taken by the government not yet being not visible. Global factors such as the uncertainties about Greece bail out or exit from Euro zone, possible US rate hike, developments in other conflict zones have all taken a toll on the stock market. Presented here is the NIFTY daily chart which confirms a bearish bias.

The trend may take a while to reverse.


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