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Market Momentum

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Markets today have once again shown signs of nervousness and the trend that I have been noticing for the last few days is that volatility is key without any conclusive direction. There have been many false signals emerging in last few weeks.

To maintain the upward trajectory today Nifty needs to stay above 5450, below which it could once again go down to 5400. The increase in  volatility does not signify anything unless, eventually it breaks out of range of 5225 or 5545 levels on closing.

Based on the chart formations a strong tussle between the bulls & bears is currently underway. In last few weeks we have seen domestic scams, outflow of funds from emerging markets, rise of crude on Middle East concerns, Japan earthquake and tsunami coupled with the scare of nuclear fallout effects thereafter and the RBI policy, out yesterday. All of the news flow has been absorbed while markets traded between this range of 5225 & 5550. From here markets needs a strong reason to breakout from this range bound trading & only then can we could see increase in momentum.

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Written by Rakesh Gandhi

March 18, 2011 at 12:34 pm