Monthly Archives: December 2013

#4 BankNifty Update: Dont Bank on Bank for near term

After nifty, Banknifty index is the most followed index. On 19th of October we had recommended to go long on Banknifty with tgts of 10948/11200 which were easily achieved in November/December. Now time has came to book all longs for short time and Sell Banknifty. Ofcourse for long term investors its time to arrange for some liquidity as they will get a chance to buy some banks for time horizon 2-3 years. Fundamentally, as we mentioned in our last post on Nifty, we are expecting some rate hike in upcoming Monetary policy and also expecting FED to start tapering soon. Now coming to BankNifty Weekly chart technical’s, it has resisted at strong resistance line which was a support line last quarter. Secondly, A dark cloud cover pattern is visible on charts but not much valid as its not the clear top. Thirdly, the most strong theory which i follow Elliot Wave is showing some correction on the charts. Weekly, indicators have turned negative for the short term. Counting Waves, it has completed Sub-Wave 1 with as visible 5 wave Pattern. Now a correction Wave 2 with a-b-c is possible. We expected atleast correction upto 10720. At the most it could drop down to 10250 in near term.

Our Strategy: We recommend to go Short on BANKNIFTY (CMP:11366 cash level) with tgts of 10720/10260 SL:11750 …

*all level mentioned are of Index and not the future contract of Index

#194 Nifty Update: "Dark Cloud" covers Market and 430/688 points rain expected

Rain in winter is unusual but for the markets this COULD happen, so now carry a RAINCOAT i.e., put option to protect you portfolio for new 2-3 months. Last five session has been continuous downside and that was like a slow poison to traders as slide was a bit everyday. Looking at ‘Weekly chart” after today’s close i was shocked to see a strong negative candlestick pattern “Dark Cloud” cover. This pattern suggest a reversal to bullish trend and this time its more relevant as its at a “Clear top”. Indian Economy hasnt improved as expected or as market has discounted. Yesterday IIP were worst than expected at -1.8% while inflation was at the peak at 11.42% (approx). RBI is expected to hike rate in upcoming monetary policy while FED is expected to start tapering of Bond buying which will squeeze some liquidity from the markets. One more reason to see some profit booking around the world and India is the financial year end for US which makes FII liquidate their investment to adjust Balance Sheet. But one good thing for me is that a new high was in December than rather November because History says if a new high is in november than we see a downside for a long term but this was not case for us this year. Earning results would be announced next month and i am expected a little hazzy profits as auto industry hasnt seen sales as expected in diwali festive. Now coming back to technicals, Weekly chart has surely given a negative candlestick pattern while indicators are also bending negative. Nifty took strong support at 5 Week EMA which is also a strong support was next week. On daily chart we may see some short covering as we have seen 5 straight down side. On monthly chart nifty is trading below the resistance line. For bulls in power this expiry should close above 6288. From the elliot wave point, this was end of Wave 1 from 4624-6415. Now we expect correction of 430 points minimum to maximum 688 points if nifty trade nxt week below 6145-6152.

Our Strategy: SHORT Blindly below 6152-6145 and Sale on Raise with SL of 6450.. Downside targets for next few months 5950/5750/5470

#193 Nifty Update: A pause on the way

As we mentioned in our article update, Long was our call on nifty after Fridays move. Safe traders were recommended to go long above 6212 and i hope all are long. but todays move shows a pause on upside move. I am sure it is a short term pause!!! Nifty might hangover around these levels before moving forward. As circled  a perfect Doji has been formed today which also can be somewhat a dragon fly which is a sign of weakness but as its not the clear top but within yesterdays range, it could be jst a short term weakness rather than long term. 6123 is a strong support on daily charts while 6055 is the support for the week. As we have been saying Midcap are still a gud buy for portfolio holders. Indicators on daily charts are surely giving buy sign while weakly chart indicators are still flat.

Our Strategy: HOLD our Long nifty call initiated at 6176 (6212 for safe traders). tgt 6450