Monthly Archives: August 2015

Relief Rally gets a kick-off: Nifty: 7948

Expiry was better of in volatility than all expected after the first three sessions of this week. Nifty, after mondays fall, continued its sell off on Tuesday and Wednesday as Brokers raised Hair cut on margin stocks to 70% which forced traders to square off its leverage Derivative positions. But on Thursday we say sustained rally and fresh buying in undervalued stocks such as Tata Steel, Tata Motors , Sun Pharma to name few from the Nifty’s 50 Basket. Internationally, China and US are playing a blame game. China blames US Fed’s rate hike fear for global sell off while US blames Yuan devaluation and slow chinese growth for sell-off. But the technical truth is , charts were already overbought around the world. We have seen a rally on MoM charts for almost two years and now its a turn for some correction. Almost all global indicies had breached 200 day average this week and saw a steep fall of almost 5-7% which has to be followed by a pull back. Indicators on daily charts are suggesting a pull back as they are highly oversold. Talking about Nifty, as i mentioned in my last post of probable rally, it has kicked off! As circled in the chart, the circled zone is cluster of many technical resistances. 1) 100 Day average:8350 2)61.8% Retracement: 8277 and 3)Gap: 8225. So as i mentioned in my last post traders could be long with targets anywhere between 8225-8350. Achieveing targets doesnt means to short but we have to wait than for a strong reversal as resistance on upside is 200 Day avg  8451. So as of now i recommend to stay long. 

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Nifty 7880 (+71): A relief rally

Am sure today many of them would have lost atleast some or part of the wealth though market ended in +ve territory. Since i entered the financial markets had never witnessed such a wide range of volatility on Nifty. But technically, Nifty took support exactly at the 100 Weekly average (dotted line in graph) at around 7670 which was crucial one. This support hadnt been breached on EOD basis since 14-9-2012 which makes this time for markets where dangerous. But as you all guys could see a gap which is relevant due its presence on weekly chart, we now could forward to fill up the gap which coincide with my wave calculation for relief rally. Indicators too on weekly charts are expecting a recovery momentum but this could be only the expiry play after which we could again see a free fall on the index. Medium term outlook has weaken so playing long would be a bit volatile play. For the short term we could surely be on the long side with the upside capped in the range of 8225-8300. 

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Opening: Nifty: 7895 (+86)Still in ICU

We saw some biggest fall in terms of points yesterday due to global trends. It is Known as Black Monday for the traders. Today we are witnessing some pull back which would resist around 8300 and i expect short covering by expiry. Though overall medium term outlook is still bearish and we could see 7470-7500 levels in next expiry. Each opportunity on the upside should be considered as a Selling opportunity for traders while long term investors can invest 25% stock specific at this level.  Intraday traders stay away today too. Nifty R-7970,8180 S-7880,7790 

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Opening: Traders are gonna take a blood Bath: Nifty 8055 (-244)

If you are heart patient, i would recommend not to call up your broker atleast for today. We are witnessing a gap down opening near to psychological support of 8000 and i expect it should hold this expiry i.e., this week. On the derivative side 7900 as strong support for this August expiry and we expect a bounce back to 8300 levels. Global market indexes too has breached 200 day average support which is a sign that we are entering a medium term correction mode. Overall we dont have much on domestic news front but we are reacting to global sell-off and we have also entered correction mode. I would recommend not take ANY news position today. Just WAIT n WATCH. Nifty R-8220,8285 S-8030,7980 

Downsizing channel on BankNifty

BankNifty had been the outperformer in the last rally since 2011 but now it seems it would be an equal partner for underperformer in the coming future. Overall sentiments in the markets have turned bearish after the sell of on Friday. Even the global markets had seen sell off on late Friday giving a sign of weak opening tomorrow. If we look at the long term chart of BankNifty, than we had seen a rally from 9940 to almost 21500 which hasnt corrected yet enough to move further and my analysis suggest correct has begun. But as we have more traders so i had to watch the chart closes from Daily period. As we could notice in the chart, index was trading in the downside channel and it has almost breached on Friday. As we expect a gap down tomorrow, this channel is also breached and we could see downsizing channels on BankNifty daily chart which support my weaknening markets. 18346 is the 100 day average which has crossed 200 day average at 18542 for bearish crossover giving a selling idea for the medium. The crossover has been confirmed as the index is trading below the crossover and both the moving averages. As the expiry week kicks off tomorrow, i am expecting a short covering this week but use this as a opportunity to square of your longs and short new trades for next expiry. Stop loss would come at 18850 which is the resistance line of the channel. GST bill and Rate cut are the only trigger which could give some chance of reversal but it has very nuch thin chance to cross 18800 in near future. So overall the index seems to be weak in medium term. Sell rise is what i recommend 

Closing: Long Wait failed: Nifty 8299 (-72)

Morning wasnt good enough as we saw a gap down opening due to global factors. All the frontline stocks had opened almost -2% down but the few good one recovered. Leading the recovery was the most promising defensive sectors Pharma and IT. Those sectors always protect long traders in such situations. Infosys and TechM managed to close in green while TCS lost gains in the end. Sun Pharma and Auropharam managed to stay positive. On the later part of the day we did see some recover post 8300 but that was just a short covering. Though we have closed with the a Doji and chances are of a strong reversal on Monday but this would be a minor wave uptrend. Could we touch 8860? Yes queit possible but still the chances of 7600 cant be ruled out than. So as of now, we can expect a short covering due to expiry week but how long we sustain can be unfold only after Mondays Move. Be Cautious on Monday! 

Opening: Screaming Traders: Nifty 8305 (-67)

Greece prime minister resigning and weak PMI Chinese numbers have given our asian peers a red mark on D-Street. Nifty too is opening with the mark which would leave our traders with a Scream and shock. Overall Indian markets are not concerned with that global news but rather domestic concerns like GSTBIll/LandBill/Weaknening rupee/Monsoon deficit. So of the four two later ones are not in our hands while former two can be resolved and i guess it wont be done untill winter session. Technically, markets are expected to give a strong profit bookin with upside capped at 8650 while downside gates open to 7600. Nifty is no trade zone for intraday. AVOID INTRADAY for today. Nifty R-8425,8445 S-8310,8276

Closing: Burning Money: Nifty:8372 (-122)

Am sure many of them have burned their pockets and profit today but i had been recommending to hedge positions since a bit long. Nifty has been near crucial level of 8350 below which 7600 gates opened. Banks and specially Mid-cap PSU banks were the most beaten. Overall markets seems to be gettting weak from inside which means bad days are ahead. CNX Pharam and CNX FMCG stocks were positive which clearly says that they are gonna be defensive bet. Nifty has closed below 100 Day avg which is at 8390 giving a threat to long traders. I would suggest to avoid any further longs and keep strict sl at 8350 for longs.