Nifty was able to close a tad higher above 200 EMA on Friday . readers of this blog may remember that as per the Chart History this correction to 200 EMA was on inevitable.
One can refer to our earlier post on this topic:
http://swingtradingideas.blogspot.com/2010/11/history-of-nifty-corrections.html
Rising food inflation, Rising Interest rate , Fear of European debt crisis will play for short term and many analyst will predict a bear market and ask investors to stay away from this market. But just going by Chart History these corrections to 200 EMA or even below it are common .
If we track history of Nifty Charts from 2003 : start of bull market then Nifty traded below 200 EMA in June 2004 , April 2005, June 2006 , July 2006 and March 2007 and after breaching these levels it bounced back above 200 EMA and resumed its uptrend. In the present scenario the same thing will happen at the worst Nifty may retest 5500-5550 . Nifty may form a base here , there is no Euphoria like we witnessed in January 2008 . Therefore, these corrections offer buying opportunities.
Sunday, January 16, 2011
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