The International Monetary Fund (IMF) cut back global growth expectation by 0.2% today thus causing panic in the market drowning yesterday’s optimism.
It was a volatile day for Nifty, which barely managed to just keep itself above the support . It touched a 20 month low today. On BSE, nearly 400 stocks saw a selling freeze as there were no buyers.
Here we have the 10 mins chart of the index and we can see that right after opening, Nifty sharply moved up to the high of 7470 but did not sustain it atall and was beaten down for most of the day. Just half an hour before the closing we saw some short covering provide Nifty a little pump , allowing a closing at 7309, slightly above 7300.
Today we will see the usdinr chart, that is the Dollar rupee chart. Rupee has been weakening against dollar and it touched the 68 today which the weakest it has been in the past 28 months .
On the international front, things aren’t looking positive either, as Shanghai closed after loosing another 1%, whereas the European indices are trading much worse nearly 3% lower. The effect of the IMF downgrade is expected to reveal itself tomorrow on the Chinese market. Fingers crossed.
CHART OF THE DAY: JAIN IRRIGATION
We will talk about Jain Irrigation today. A very apt hammer pattern just emerged on it with high volumes today after an extended down move from the high of 78 till 54. Given the weakness in market, not much is expected however, it will be prudent to await a closing above the high of atleast two previous candles to give any credibility to the pattern.
Candle stick patterns are not infallible, they are a peek inside the traders psychology and can often, not always, give an indication of what to expect in the near future.
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