Nifty at its volatile best

We are seeing the Nifty at its volatile best. We are still around the region of the 200 DMA. Its normal to hover around this region for a bit before the bears take charge. Also these kind of spikes are very common for a bear market. The old saying goes “ bull markets roar, bear markets spike”. Tops are built on greed and greed takes a long time to let go. Bottoms are driven by fear and so they happen fast.

FIIs are still selling in a big way. Yesterday they sold 533 cr. To put things in perspective FIIs have sold 13000 cr till now in May. This is similar to the number they sold in Nov 2007 before the crash happened in Jan 2008.

We have seen a pattern of higher tops and higher bottoms from March 2009
To me 4667 which we hit on 8 February 2010 is a very crucial level to be broken on the downside to confirm we are actually having lower bottoms. On the upside if we break 5398 which is the recent high on 7 April 2010, this move is further confirmed as we will still be aiming higher tops.