Nifty nearing 500 EMA also near strong support at 5200 – Recovery of 150-200 points on Nifty possible.

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Nifty nearing 500 EMA also near strong support at 5200 – Recovery of 150-200 points on Nifty possible.

This article was posted on Feb 10, 2011 and is filed under Market News

Nifty is nearing 500 EMA of 5145 and also as shown in the chart below nifty has strong support at 5180-5200 levels. Technicals suggest markets could see a bounce from here. A 100-150 point bounce is likely on account of short covering. Markets have recently had quite a bit of negative news from global front along with internal scams.

Last time Nifty broke the 500 EMA was at 3800 levels during Oct’ 2008. Below this it created a staggering low of the 2250 in the same month.

Last couple of days nifty saw a low of around 5200 and did manage to recover. Same can be seen in the intraday charts. If we look at today’s (10-02-11) intraday chart of Nifty, we saw a bounce twice from 5200 levels. Once nifty managed to recover 50 points up to 5251 and the 2nd time recovered 70 points going higher near 5270 levels. Both rallies did not sustain and markets managed to see selling pressure on rise..

Its a make or break for Nifty from here. It will require some serious selling pressure for nifty to manage to break these important levels. If we do break, then could head lower to 4900-5000 levels. If markets manage to hold onto these levels, we can expect a bounce of around 150 points.