Post-Budget Technical Analysis Of Nifty

It was finally ‘Judgement Day’ today as the finance minister announced the Union Budget 2012-13. But naturally, it was one of the most important days of the year for the stock market. So what was the reaction like? The market started with a flat opening prior to the presentation of the budget. Nifty registered an intraday high of 5,445 and registered a low of 5,305. The day then began to turn highly volatile and it became a foregone conclusion that the traders were looking for a clear trend. This fight between the bulls and the bears continued till the last moment and Nifty managed to end on a negative note close to its intraday low.

Nifty has a strong resistance level of around 5,500 indicated by the blue line while the lower blue line indicates the downward target of Nifty which stands at 5,268-5,171. It has been trending down from the last two days, implying that it is closing at lower levels. This clearly suggests that the Nifty is making lower top and higher bottoms. According to the MACD analysis, there is a centre-line bearish crossover and this is a negative signal for the Nifty.

Therefore the time has arrived to exit from Nifty as the picture technically seems depressing, moreover because the budget has been in tune with the expectations and therefore there is no positive cue for the market to go up. Nifty has strong support around the levels of 5,150-5,190 which can be considered as a good buying opportunity. According to retracement analysis, 50 per cent retracement of Nifty stands at 5,265 and 38.2 per cent retracement stands at 5,093.The pivot point for Nifty is 5,355, resistance 1 stands at 5,406, resistance 2 stands at 5,495 and resistance 3 stands at 5,546 whereas the pivot support 1 stands at 5,266, support 2 stands at 5,215 and support 3 stands at 5,126.