Monthly Archives: August 2012

#135 Nifty Update: NIFTY confirms short term downtrend

As i had mentioned in my last post on 23rd August, strategy was to short at 5420 with stop loss of 5448. NIFTY confirmed the breakout of upside channel by closing third consecutive day below the support line on Friday. My two tgts 5385 and 5357 has been achieved on NIFTY. Coalgate scam is picking up the heat in the parliament. I dont why parliament are not cmng to a solution soon. There many important bills to discuss such as FDI whch could change India”s future and jst discussing coalgate wont change our future. On the other hand it is expiry weak and we are expecting a volatile sessions but profit booking will lead markets to some downtrends. Over the Europe, Consumer confidence has decreased in manufacturing while US has seen recovery in retail conf

idence, home sales and unemployment claims. But eyes are on 9/12 when german court gives its decision over ESM. If its in favor of ESM than we could see new high in the equity markets over the globe. Mr. Draghi is awaiting the decision until whch he is nt expected to declare any plans for buying bonds. Bernake is also unexpected to deliver QE confirmation at Jackson hole on 31st Aug. Therefore markets are expected to trade on technicals next week unless some unseen news arrives. Talking about indicators it has given the sell signal. They were in overbought as i suggested last in post. 50 SMA is at 5250 whch will act as strong support while 100 SMA is at 5216 which is at the level of filling up the gap. Market for the first tym in august closed below short term moving averages whch is also a sign of weakness, Now strategy is to Hold the short initiated last week with trailing stop loss of 5400. Tgts 5330/5306/5285/5260/5240/5216.

#134 Nifty Update: "Choona na choona na Ab main "Overbought" ho gayi

NIFTY singing a song to WARN! long traders. Picture on the chart of NIFTY is abt to get dirtier if we dont see close above 5448 tomorrow. As you can notice the chart, its the same thing as my last post on NIFTY bt only change is addition of 2 latest candles. As we can clearly see that it resisted today exactly at 5448 and thn bounced back to close below 5420 for 3rd consecutive day as mentioned in the chart. Bulls strength is getting weaker and weaker day by day as its nt able to clearly close in tht channel again. One more close below tht channel tomorrow and downside is confirmed. 5448 is strong resistance level tomorrow again as 1) channel boundry line 2) previous rally resistance and 3) 61.8% resistance of last downfall from 6330-4700 (approx). All the indicators are in overbought zone and they are warning as tht NIFTY MIGHT see a turnaround. technically we are sighting downside upto 5220-5240 which is 50% retrenchment of last rally 5032-5448 and also a unfilled gap over there. from PMI numbers of China, Germany and France were announced today and they had improved over previous whch was the sign of recovery in their economy. US unemployment claim is gonna announced soon which could effect the market opening at DOW today. Merkel and Hollande are gonna meet today to discuss abt the easing package for greece. Tomorrow and day after Greece FM gonna meet both Merkel and Hollande on respective days. So this weekend is gonna be eventful. Consumer confidence data for Europe will be announced around 8:00pm which may have lil impact on the markets. Domestically we are not sighting any improvements in politics as we saw 3rd consecutive adjournment at parla session. This is a shame for us as instead of solving issues our govt is running away from it. Monsoon have been pretty good while inflation has eased so thts a gud sign for our economy. Now coming back to stock markets, if the global data to be announced later today are way above expectation thn we may see some rally but if at par with expctation or below thn we may see some profit booking in markets. My strategy on #nifty:
Sell NIFTY CMP with Stop loss of 5460 (Closing basis) tgts 5385/5357/5330/5306/5385/5260/5240/5216

#133 Nifty Update: "NFS": NIFTY For Speed

NFS means “Need for Speed” for gamers but for traders in India today it means “Nifty for Speed”. Yesterday i posted and mentioned about the breakout of NIFTY on the downside channel. But today nifty didnt confirm the breakout and was back on track. As it happens it Need for Speed game whn ur car is off track and there are 50-50 chances of coming back on track so was the case here but NIFTY was back on track to speed up with other global markets equally. NIFTY came back to upward channel back today successfully. All the indicators are still in overbought position so i wont initiate a long call yet and Short position stop loss has been triggered. 5448-5450 is the strong resistance. NIFTY has resisted near tht level many times before and its the strong retrechment level of 61.8% of the last downfall. So my View is to stay HOLD and wait for 5450 to breach.

#132 Nifty Update: "Grey Friday"

Confused? Why Grey Friday?..Generally we gve names like Black Friday (Terriost attack), Black Monday (Stock market lower circuit 2004).. thn why not name “Grey” to days to whch we have seen some bearish breakouts or bearish news too. On my view to name it we can name 17th August as GREY Friday for 2 reasons one funda and one technical each.1) CAG report was tabled in parliament which stated scam of Rs.1.85lakh crores. 2)Upside channel was broken. Elaborating fundamental reason of CAG, i m of view that it is the biggest shame to Indian politics or to be specific UPA government. Just imagine if that Rs.1.85 lakh crores wld have gone to Indian govt than m sure tht we cld have been ahead or atleast at par with China economy last decade. Pvt group named in report such as JIndal, Tata , Reliance (ADAG)etc. are gonna be hard hit fundamentally if this is case is gvn fair result. More funda news this weekend were that Oil ministry is planning to raise Petrol prices by Rs.3, Diesel by Rs.4-5 and Cooking gas by Rs.50-100. This hike may come after 7 Sept when parilaments monsoon season closes. Globally Sept 12th is the deciding day for the German govt as the case hearing is on same day. RBI policy is on 17th Sept and rate hike is to be considered after new inflation numbers. July inflation has improved but due to deficit monsoon august may seen inflation bouncing back at higher levels so we might have to weight and watch. Now coming to technical we have seen a upside channel breakout friday in the court of bears. As you all could notice that market has exactly stopped arnd the support line of channel. Even friday’s closing has given a DOJI on chart signalling a Pause to previous trend (nxt trnd could be any). Why am i saying this to be important breakout is because markets had taken support of the channel line for 6th time and then it lost the battle. Now tomorrows opening will decide the trend. If the markets open below 5366 or closes below 5384 the downside could be confirmed. Upside is capped at 5390 for time being. On downside we may see 5220. So my current call is Short :NIFTY at CMP. Stop loss: 5390 tgts 5306/5285/5265/5220

#131 Nifty Update: NIFTY trading steeply on the charts

As you can notice in the chart, NIFTY has been trading in the steep upside channel. In my lost post i did initiate the Long call on the NIFTY near to 5330. My call is active but it has got lil bitter today. NIFTY closed at 5362 below the important resistance level but it has just managed to close above the supporting channel line. Technically speaking indicators are flat which indicates a consolidation phase ahead of a strong rally on either side. We could be more bias on positive side for long run has monthly chart has give a good breakout above 5280…So tomorrows closing will be important to decide the short term run ahead as long term we are positive if the august close is above 5280. We cannot decide until the august close that we have got a long or short call on nifty. Checking out daily chart keep three things in Mind 1) Tomorrow close above 5380 will keep my long call active on NIFTY if Not 2)Close below 5380 means strong support at 5342 and 5328. Keep a stop loss to my initiated long call at 5308..Risk takers can keep a stop loss at 5270.

#130 Nifty Update: EK THA BEAR"…This time he fights for His love (Bull)

So u all must be waiting for the Salman’s “Ek tha Tiger”, bt traders just watched today “Ek tha Bear”. We still dont know what the story gonna be of “EK tha Tiger” but its gonna be love story m sure. We can predict the love story of Bears ♥ Bulls. Today bear sacrificed herself for bulls and we show Bull gaining control above 5330 which was the strong resistance level 5 SMA. Bull equally loves bears so we show range bound movement between the 2 at 5307-5330 levels. Still we cannot confirm the long term trend as both are strong bounded to each other. They need their parents i.e., fundamental or political reasons to seperate them and get the confirmed long term move on either side. Reading the charts on daily basis we are in the strong upward channel and NIFTY exactly bounced back from lower bottom channel today at 5309 level. All the indicators were at the mid-way until yesterday bt they slightly pointed themselves to the upside direction today on back of positive europe market openings. Globally, Fundamentals are getting more weaker. “Rio Tinto” one of the leading mining company from australia posted 34% drop in balance sheet for 1st half as it witnessed 22% drop in demand for its material from china. Now this is what i call a sign of weakness. China was believed to be stable last year as its industry was producing bt nw we may see downfall as now its storage capacity has also been utilised as no demand of their products worldwide. Even “SHARP” which was the leading manufacturers of LCD in Japan has seen 50% drop in sales on YoY basis. US has seen a increase in employment but an article suggested that Obama has tripled to govt hiring which may have infused numbers. Analyst are in view tht Europe will be back in growth after 2014 as it was in pre-fall dwn times. But 2 good news from asia 1) Indonesia grew at 6.4% for 1st half. It is the leading economy is south east 2) Japan airways is planning to re-list it shares and that wld be the biggest issue in asia this yr with issue size of $2-3billion. So we are seeing sme recoveries globally bt developed countries are gtting weaker day by day. So long term picture nt clear on global side.

Technically speaking nifty has a gap downside 5260-5216 but all the indicators and breakout today suggest upside move. NIFTY has closed above all the short term and long term moving averages after long time. Tomorrows opening would be of much relevance. We may see markets cruising to 5450 levels above which we may see long bull run. So strategy is to be long on NIFTY with tgts of 5380/5420/5450 stop loss 5310.