Monthly Archives: May 2012

#124 Nifty Update: NIFTY Pulling up its Summer "shorts"

Its the summer time and Shorts are in trending on the youths while traders are trending with NIFTY’s short covering. Yesterday we show a reversal pattern “Morning Star” (circled in graph) which is a sign to an end of bears and start of bulls. After long time NIFTY has closed above short term moving averages (Yellow-5SMA , Green 10SMA) which is also a sign for some bullishness on markets. Indicators on daily chart are highly oversold which may also bring some upside movement. Why am i calling it Short covering and not bull run?? Its because fundamentally we dont have any good news factoring in nor bad news , its just traders are gonna cover their shorts next week due to expiry. Petrol Price hike was a good news for OMC’s which was the reason for the upside move in oil stocks in last two days. Listed Companies are positing mixed results within the same sector. We dont have any major event lined up next week so we may go long for a week with stock specfic.

On weekly chart market has closed exactly at resistance point and its important for market to open positive and remain above 4936 for nxt week. Next Thursday being last day of the month, it is also imp for us to look on monthly chart. Monthly chart is said to be in bullish mood since february this year. If market closes above 4900 nxt thursday then we can be bullish on NIFTY based on monthly chart.

Strategy: As i mentioned in my last post that people should keep a stop loss on shorts at 4936 and we achieved that point on NIFTY today. Now risk takers can go long the NIFTY at CMP with tgts of 4975,5030,5090 where as safe traders go long only above 5170 which is considered to be boundary line for short covering.

#123 Nifty Update: NIFTY ko garmi lag gayi!!!

Since the breakout of triangle on the downside, NIFTY is giving more and more bearish signals on the way to downside. We could see that on the chart that we got to “Bearish Engulfing” signs which is a bearish signal. But today we have seen a “hammer” which is a sign that markets MAY change the course from here. All the indicators are already in oversold zone but we cannot take that signal as the bullish sign as markets can stay in oversold zone for even months.

On weekly chart too we have seen some bearish breakout last week. We could see that there are two valid channels. NIFTY has confirmed the bearish breakout from sub-channel last week while this week it has not been able to move up that level of 4936.

Considering Technically factors we are more biased on bears side, where as fundamentally also we have not got any sign of turn around from here. Rupee is at the life time low at 56.20 which is a negative sign for our markets.

Strategy: Still Hold your SHORTS initiated at 5170. Book profit on upside if NIFTY closes above 4936 on weekly basis. Add more shorts if NIFTY closed below 4785 on daily basis. 

#122 Nifty Update: Is 8950 possible on NIFTY?

Looking at this chart, all the technical analyst including me will get bullish on the NIFTY. This chart is NIFTY’s monthly chart. As we could notice technically we are witnessing a “Flag” pattern which is a continuation pattern. This Flag is on the way during bull run so we can expect a bull run ahead. Breakout was 4 months in FEB as u could notice. Since than market has taken support of the resistance line of flag. This pull back to support line is a common thing after a breakout from a pattern so we can still consider this as a valid breakout. The question remains whats the next strategy?? NIFTY should close above 4900 this month to be in the bull run. Risk takers can short below 4900 while safe traders and long term traders can wait for this month confirmation. If the market closes above 4900 for the may month than we can get upside long term target of 8950 as per the breakout out formula.

To add support to MONTHLY chart we have even seen a bullish reversal sign today on the daily chart which is “Bullish Engulfing”. This candles stick pattern has often given a great reversal signal. So risk takers can be bullish on the market while safe traders can wait for month end. Fundamentally rupee is getting weaker and weaker. And the cause?? We the people. Air India is on strike, Kingfisher cancelling flights and Jet Airways discontinuing foreign routes which is increasing demands for foreign carriers which results in demand of dollars in exchange of rupees depreciating our own currency. We should understand and pilots should closeout this strike as soon as possible. On the other hand indian banks are being downgraded by foreign rating agency which is also a shocking news. On other hand ,Market leader, RIL is not performing as per expectation on the basin. Output is decreasing day-by day.. So all strong technical reasons are counterattacked by Fundamental reasons. So i would suggest safe traders to wait for the month end while risk takers go short below 4860 or go long above 5170

#121 Nifty Update: CRIME Suspected

My last two posts suggested downside rally and indicators still believe so with fundamentals such is USDINR and greece fear suggest. But technically a CRIME is suspected against the trend..I emphasize “Suspected” meaning not confirmed but depends on few conditions. After a free fall from high yesterday Today we witnessed a gap down opening from yesterdays closed and market draw both side and than closed near the opening creating a “Doji”. Last two candles are perfect characteristic of “Three candle” formation Morning star which can be a bullish reversal signal. Tomorrow’s opening is crucial for the bulls to take control. Two things tomorrow will decide whether bulls are taking over the bears 1) Opening price 2) Breaking of previous low. If we see the opening tomorrow above 4980 and if todays low i.e., 4956 is not breached than we can bullish for short term. Strategy for tomorrow: If The opening is above 4980 and than NIFTY trades above 4956 than cover your shorts and go long with stop loss of 4950 or else if the low is breached or opening is below 4970 than add shorts to your current positions.  

#120 Nifty Update: PNR Status of Ticket to 4700:" RAC 3 "

Vacation time has started and many of you have booked your tickets ….so has NIFTY!! Your ticket to destination might be in waiting list but NIFTY’s ticket to 4700 is now RAC today which was in waiting list yesterday…That means we have got confirmation today that NIFTY is surely travelling towards 4700 but RAC 3 means we have 3 more hurdles on the way which myt restrict the travelling 1)4980 which has acted as the strong support since last  3 days (closing basis) 2) 4900-4920: Strong support levels on both weekly and monthly level 3) Not a technical reason but a imp one: USDINR chart suggests rupee strengthening ahead. Talking about the last three days, it has been a dramatics on the exchange. First day, we saw a 3 imp level breaking out i.e., triangle brkout, 100 SMA and 200 SMA. Second day we saw a gap down opening and thn last 2 hours saw 135 points recovery after the GAAR postpone to nxt year…but technically it was just a pullback to brkout level which was 200 SMA at 5114 (white line) . Today the final day we saw a heavy selling and all profits gained yesteray were wiped out. All funtdamental supporters and analyst were gvng tgt of 5600 yesterday after the GAAR but technically we got downside confirmation…..But its RAC and yet not confirmed 🙂 …Strategy : Hold your Shorts which i have initiated at 5170….

#119 Nifty Update: "Investors liquidate their position to buy Mangoes "

Mango season is here and i dont find any other strong reason fundamentally tht why we are seeing a sell-off in market. This may be due to the mango lovers gng for mango..hahahaha…But remember Maaza “haar mausam aam”?? ..So guys be in some liquid cash to buy at lower levels in coming months…Anyways coming to the point, it was a “Black Friday” as some may state for the investors on 4th of May. Many expertise  and analyst are of mood that market may bounce back from current levels but study of my technical analysis suggest that we are more biased on the downside for coming 2 expires. As i had mentioned about the descending triangle in last few months we ultimately got breakdown from neckline with Close that to a weekly and daily. Last friday’s close has made many technical analyst eyes wide open. Descending triangle is a bearish signal but this time it was formed after a rally and global markets were positive so we had expected triangle to give bullish breakout which it didnt. Yet WE HAVENT GOT CONFIRMATION of breakout but we can be biased on downside as per Triangle rule but we have seen all indicators turning negative last week. You may see on the daily chart as i have marked that there are 4 gaps which has been left in last rally. We may see atleast first 2 getting filled. But 4700 odd level is a strong downside tgt as its a formula tgt from triangle breakout an we also have the gaps around same level. But as per the retrenchment level 4900-4940 is a strong level for support so i am expecting minimum 4900 as the tgt on NIFTY. 
Stock Markets generally over the world tends to trade in a seasonal cycle which states that a bearish cycle from April-October and bullish from November- March. it generally means that we see a market low in April-October and high in November- March. That has exactly been the case in the markets this here. We saw a bull run upto march, April was consolidation and now month of MAY will lead to some downside unless a strong fundamental reason or some positive parliament outcome. But it does not mean we may see new low but we may witness bearish mood. 
What are positive for the Markets??
Surely there is some positiveness for the long term investors. As you could notice in the chart 100 SMA (red) has given a bullish crossover over 200 SMA (White) which is a buy signal but NIFTY is trading below that averages so be cautious. Fundamentally we have seen some outstanding results coming of domestically which is a good sign for industries. Notice that Consumer utility stocks are giving better result which is indeed the first sign of market recovering from the bottoms. In the US a article suggest that 98 out of 100 Metropolitan cities are witnessing a real estate boom as the finance and prices are at affordable rate then rent. So globally also we are witnessing a spark in household utility spending.  
Short players can go short with Stop loss of 5200
Long players: Long term investors buy 30% of the portfolio at 4900-4950 and rest at 4600 if that level breaks out on downside or at 5200 if we see a bounce back from 4900.