Monthly Archives: July 2013

#7 Article: Monsoon Trading

Monsoon has been wonderful for the farmers around the country but still not good for the traders, let it be Commodity traders or Equity traders. All the Agri commodities are pouring down in value even more than monsoon while Nifty has been pretty volatile last month but we did achieve first target 5961 which I intimated in last issue. We still have our upside tgts 6132/6300 intact. RBI was the key market turner last month. Raising money market rates from banks was the step taken by RBI to control depreciating rupee. Our currency did improve against USD but what about our economic growth?  Many analyst including me are of the view that squeezing liquidity from economy at a time when we trying to stand up from recession is little harsh step. But controlling our currency and CAD (current Account Deficit) was also important. So everyone will have their own views and I guess RBI would have taken the right step after studying our economic conditions more carefully. Gold import has been reduced almost 50% over last quarter which has reduced our CAD to large extent.
Earning season has been better than estimates other than small banks which have not performed as per estimation. But this should been taken positive change as companies have performed better than previous quarter.  IT and Pharma sector is outperforming at the index and even at the fundamental earnings. Rupee depreciation has helped both the sectors to outperform as they are more over export oriented sectors. Banking and Commodities sectors are the most beaten and stock prices are just unacceptable for the traders and investors but its hard to believe that this is the right time to go long for investor who has the horizon of more than 5-6 years. Tomorrow we have RBI monetary policy review and we expect something in favor of Nifty and Banknifty.

Coming to Nifty technical’s, 100 EMA is at 5869 and 200 EMA at 5750. We are expecting nifty to consolidate between this range.  Indicators are also expecting a range bound to consolidation movement in near future. Graph adjoined to article is weekly chart of nifty and its running in perfect Elliot wave channel. Currently we are in internal correction mode which can be taken as a long term investment. We have been advising seen last 2 issue’s to go long for long term portfolio builders and we continue to do so. Our SL of nifty would be the same i.e., 5757 and 5632  on closing basis. Targets on upside are 6132/6300/6450

#160 Nifty Update: Road to 6350

As we have been intimating you all to go long on each dip and that would have got you or your portfolio in green by now. Result earnings are falling as a god grace to bulls. Infy, hdfcbank and than today axis bank and TCS have given marvelous results. GDP and Inflation is still a concern but investors can bet on stocks as now the future is going to better than today. Technically on Nifty’s daily chart we are safely above all the moving averages which is the gud sign of upside trend. RBI has been taking step to control devaluation of Rupee. FII has been a net seller last month but do notice it was 90% in Debt segment and not equities. As our FM said we are a attractive destination for investment and we should continuously be that same. All the segment have seen beating turn by turn and only option left now is upside. Coming to technicals ,now we could see nifty resisting near to 6280. 5910 tends to be strong support on closing basis. After 6280 we may see some correction to 6040 which would than  ultimately takes u to 6350. Our strategy continues to be buy on dips with now trailing SL of 5910. Close above 6030 this month is important for Safe bull confirmation.

#159 Nifty Update: Nifty breaks from a consolidation triangle

After almost 5 days of consolidation mode, Nifty drove itself on the upside yesterday and continued its move today to close above 6000. Last three post i did mention to go long on each dip and our tgt 5975 has been ahcvd. Our nxt tgts our 6062/6136/6300 are activate.. Short term traders should keep SL at 5908/5828 as per the convenience. Infosys have presented a good set of numbers and we expect other companies to do the same. So we are still intact with going long on each dip with sl of 5828 

#158 Nifty Update: Nifty between the lines

Nifty has been trading between the two lines 5750-5905. There is not much fundamentals to cheer for and nor to be upset with. We are experiencing foreign currency volatility at the highest levels. Developed markets  are experiencing a turnaround. China’s inflation was announced today which is at the peak this year and and good for the slowing economy. Housing data as i mentioned in last post is improving in US whereas unemployment is stable at 7.6% Looking at commodities, Crude was trading at 42 week highs upto 5th july but since 2 days supply concerns have ease which as seen some profit booking on Crude oil around the world. Gold and Silver is stable and range bound. Dollar has been weakening against major currencies after a good rally last week due to easing economies and easing crude supplies worries. Coming to Technical terms, as headline suggest index is trading range bound between 5750-5900 while hovering all the important moving averages. Indicators are flat. But we are biased more towards upside as most of the nifty stocks are showing bullish signs. We would recommend safe trades to go long above 5900 with strong sl of 5832 then. Supports are seen at 5811/5762. DONT SHORT UNLESS BELOW 5750.

#157 Nifty Update: Tickling Nifty

Nifty was tickling traders today. Today opened with a gap up on back of good unemployment numbers in US. PMI numbers had been improving in western countries. Today SBIN was the most beaten in frontline scripts. Weekly charts are showing some bullish confirmation on the charts. Technically i noticed some interesting things on weekly chart of Nifty. Three instances has been identical on the chart. First, was at the end of week on 08-09-2012 when nifty took support at 100 Weekly EMA and reversed with “Bullish Piercing” pattern of Candlestick. Post confirmation we got nifty movement from 5332-6100. Second instance was proven on 18-04-2013 when nifty again took support at 100 EMA and reversed with another strong pattern “Morning Star” to get move from 5780-6200 post confirmation weak. And last weak was the third instance when NIfty has reversed from 100 weekly EMA and gave third reversal patter ‘bullish engulfing”…So now we may assume we should get a short term rally from this point. So every dip is buy as i have been intimating since long. Nifty should close above 5852-5860 and will resist near to 5915-5975  for some days. So still i am biased towards long side with SL of 5730-5762 on closing basis.

#156 Nifty Update: Nifty close jst above 100 EMA

As i mentioned yesterday Nifty took support at 5852..Yes it was obvious as it was 100 DMA on our daily chart. Since opening it was weak following SGX nifty. We have RBI policy this month but we dont expect a rate cut as inflation has been increasing due to weak rupee and increasing crude oil prices. Today HSBC PMI for india was declared and it is improving marginally from 49.90 to 50.30. Yesterday Europe and Japan’s PMI too have increased more significantly than ours. It is only the commodity king country, China, not showing any recovery in PMI numbers. US has seen continues growth in housing market and retail sales. taking DOW as gauge of all global markets than every Dip it is a chance to buy for Long term as i intimated yesterday. Now we have to take this as a buying opportunity. We might see some downside tomorrow but buy banks on tht dip. Target for nifty in this week is 5971-5780.

#155 Nifty Update: A day more for bullish Confirmation

Nifty continues with its winning streak. nifty opened marginally weak at 5834 and a made low at 5822. On Saturday I posted to go long at CMP and market gave a best chance for a entry. As last week nifty was trading in downside channel, on friday it breached it and closed above the resistance level to sigh a reversal. Today it gave a bit more confidence to close a way above that channel at 5898 which is a strong resistance level but 5975 is where it could resist. Earning season has started but yet they are not out yet. This could be short covering but it may also be the start of new bull wave. Every dip is the buy for medium term. Support levels of tomorrow are 5852/5824/5790 Resistance levels 5931/5952/5975