Sep 3rd: 6% in just 3 days

This has been one of the shortest trading weeks in a year and that too with a gain of more than 6% in the Indices. Is this just a technical bounce back or end for the falling markets? Market men finding it really were hard to trade in the market are confused with, which way to trade in. Last week we saw markets collapsed more than 11% in a single week. But this recovered 3%.

Nifty after taking a good support at 4800 levels bounced back sharply to close above 5000 levels. Sensex closed few hundred points below 17000 levels. But the recovery again is too fast and can be short sighted. As discussed in the past also that there has been no major changes in the fundamentals of India, so these kind of fast recovery can be short lived only. This can be just proved as a bounce back from the carnage which happened last week. As the Nifty was trading below its over sold zone and the MACD buy signal on the second trading session helped the traders to take positive trades.

Finally DLF took a break from its long down trend and gained nearly 20% in a single week. Rcom after its likely clean cheat gained 18%. Jsw steel too recovered 19%. Rel Capital 18%. Tata steel 16%. Some of the other stocks which gained were Parasvanth and Chambal Fert 18 & 16 % respectively. T. motor 3%, Mnm, Cairn, Sun Pharma 10% each. Amongst the small and mid cap stocks were Accentia Tech 31%, Panaromic universal & Confidence Petro 27%.

Stocks which lost in the week are Ongc 5%, Ntpc 2%, Maruti 3%, Pnb 6%. In the Midcap and Small Cap Sks Micro finance lost 14%, Kgn Ind 12% and Simple Infra 10%. Pranetta closed down 42% while Bodal Chemical corrected 38%.

Technically speaking, If we looking at the Nifty chart 1, we can clearly see that the Nifty had taken support at its 161.8% retracement levels from the low of 5177 and high of 5944 after its long downtrend. Its 161.8% retracement levels come to 4703. Nifty since a long time was trading in its oversold zone. But this week the MACD have also given positive trigger and the markets did bounce back. But am still not comfortable with the markets.