Just yesterday i talked above 8000+ levels on Nifty and today opening trade would have given a nightmare to most of you but those who took this as a opportunity as a trade on my recommendation, Hats off! You might have even read on my post that i mentioned above a minor profit booking anytime and today was that day. As per my calculation if we trade above 7909 which is yesterdays high than we can get to 8100 pretty soon. On the downside, today we pinched low exactly at 200 day SMA at 7780 which should act as support confirmation. So for a new trade you must keep in mind range of 7780-7900 beyond which you can take trade accordingly. Though i am still biased for a long trade.!!!
Most of you would have felt that today was a boring day but technically Nifty has been approaching Resistance zone of 7909 which is why we have slowed down a bit. Though thats just my first target but still we need to be cautious around the level because today we have a got a Spinning top on daily chart as marked by arrow. Even if we see a profit booking tomorrow, it would just be a minor one to last two days rally as 7700 is now finding strong base on options side where PUTS are being written down. Secondly, we have may crucial support reason in the range of 7669-7690 as i have mentioned on chart which would let Nifty go below the range. Even the Elliot wave is in tune and we could see minimum 8265 before breaching 7669 anytime soon. But for near term my targets are the same as mentioned yesterday. 7909/8050.
Until Thursday close i was sure about Nifty strategy of buying on dips but friday’s volatile session had ended up everyone in confusion. But as i mentioned on that day, we should still be bias on Buying on dips and today’s close has cleared all confusion on Nifty index. As you all can notice in graph, we have close above 200 day SMA which was at 7777 which gives us a confirmation for the rally ahead. Secondly, we have close above 7836 which was the resistance line on Weekly chart adding booster to Bull ride. Now talking further on Elliot wave, it is almost confirmed that we have started a 3rd Wave of minor degree but still could be the fastest and one of the good rally in near future. Though indicators are almost nearing overbought zone on daily chart, but we still have chances to move ahead. So strategy is simple to hold longs on Nifty with targets of 7909,8055 SL: 7690
Today was ought to be Decider between Bulls and Bears on Nifty but it ended with confusion with almost No change today. Technically as i mentioned 7690 was crucial zone and we did trade for fractions of seconds but as i always mention, what counts is closing. On other side 200 day SMA resistance which was at 7777 didnt trigger at all today. As we havent got close outside our range, Nifty can be interpreted as confusing close. Tried to apply Elliot wave, there are 3 possible targets for this short term profit booking: 7694,7629,7543. Already today we have achieved first target so there are chances of reversal from here, but as i said they are just chances. Its very difficult to answer exact bottom but still we can play the game. As marked in Yellow square, its the best buy zone for short term traders. So now strategy remains the same of buying on dips, if at all we see trading below 7694 again on monday or else if we trade above 7777 then just go long.
Nifty has been trading in strict range of trade since last few sessions and volatility has ended traders into confused zone. But now tomorrow is a D-Day for the Nifty deciding May expiry future. As we all can mark in the attached chart, Index has been taking support at 7690 level which is trend line support of the line stretched by connecting Highs of Nifty since 9119. Line had been acting as a strong resistance prior to recent rally for almost one year but now, as it is said, it has changed its role to support line. On the upside 200 day SMA which is now at 7777 is acting as strong resistance and bulls are finding it difficult to catch up momentum above the same level. Indicators on Daily charts are in middle of the road so all depends on the range breakout tomorrow. Looking at Open Interest, 7700 Puts is still witnessing write-off which makes us little biased in favor of bull but on other side Banking stocks are not supporting small rallies during intraday. So all confusion has ended up the day with a Doji today, making it D-Day for Nifty Tomorrow. Fingers Crossed!!!
Banking stocks have given a good rally from the budget low and specially PSU banks, but now since last 3 sessions we are losing some strength in the stocks. Some Private sector banks are trading at 52 week high which posted strong results for the last quarter. PSU banks are the cause of weakening because they are posting worst than expected results. This could be clearly seen in Nifty Bank index chart that too the monthly which is attested in the post. Index Trade is on the channel Bank on other side of which we could see a long term breakout but it seems lil difficult looking at the momentum in short term. Adding open interest Data , i feel 16000 as the bottom while 17000 is the resistance which is also the channel resistance. technically support is seen at Red line which is at 15790. So this week trading is crucial for banking stock.
Recommended Strategy on Index: Buy Around 15790 or above 16800 which is early. Stop loss would be 15500 and 16500 respectively.
Tata Motors have been most under-performing stock in Auto Industry in recent past but now its time be the out-performer in coming months. Stock has tested sub 300 levels twice last year and while testing so it has created a Double bottom pattern on weekly charts of the stock. Have outlined Double bottom pattern on the adjoining chart, though it is not perfect text book pattern but it is too close to the same. Neckline which is defined or known as Breakout line is a 425 and we are approaching the same which would trigger a sure buy for medium term traders. Indicators have confirmed momentum crossover which confirmed positive divergence which is also marked with white line. Still we have to confirm 100 weeks average which is at 442 but i would rather recommend to trade on breakout of Double bottom pattern at 425. Target would be equal to the distance between Two lows and Neckline , calculated from the neckline.
So recommended target above 425 would be approx 555 with Stop loss 385.
Rd disclaimer before investing on my website
Haven’t talked about Nifty chart since few days but was trying to study charts from different angles and now i have came across some crucial outputs from my study this weekend. As i had talked about a weekly channel breakout last week, we have almost confirmed with second close on Friday but it closed with a nervous feeling. As you all can notice the candle, it has just closed above the channel and its not at all convincing for the long traders. This makes next week trading quite crucial. Most crucial would be opening tomorrow which can almost confirm near future’s trade. If the opening is above 7896 (which is lil bit doubtful) than positive momentum should continue on index but if the open is below or at 7825 (which is likely) than we may continue to witness profit booking as we saw in last two sessions. But as long term charts are still positive as shown by the indicator, profit booking, if any, shall take support at 7700 which is 100 Weekly EMA and also option markets have witnessed too much writing on that strike price PUTS.
Now we talk about Daily chart time frame, then we have closed with a Doji which also states that opening could decide the trend. Indicators are in overbought zone on daily charts so may be a little risk of profit booking stays but it too has 7700 as support zone so there aint much downside for the traders.
Strategy: Buy on Dips with SL of 7700 tgts 7970/8055
Crude as an asset class worldwide has been seen as a prime suspect for the last years sell off in Equity markets but now its time to rethink on our view. There has been crucial cold war in Crude production between US, OPEC and Russia since start of 2015 which has resulted in glut in crude market but recent news are sign of something positive coming in the future. Iran has been in focus as they are trying to regain market share in crude production since the sanction lift in last year. But i don’t think there are much worries on production side ahead as OPEC countries including Iran has reached 90% production of the capacity in April as per Bloomberg data source. Total capacity of OPEC is 36657000 barrels/day and they produced 33217000 barrels/day in April. So now there are no chance of any further rise of production. So to sum this up, if they aint any freeze in output in meeting on June 2 then there is not even room to produce more which means output should remain at this level atleast. And most importantly, Russia might join June meeting and there could be a common decision to freeze output which was long awaited support
Even monthly chart of WTI Crude is showing some sign to support Crude output freeze in June. As its always said charts are first to show signs of reversals, this time also it could be true. Monthly charts of WTI as attached are showing that commodity has approached resistance line of the channel and there are full chances to break this downtrend which has been intact since December 2014. To support resistance channel breakout we have other factors too. Blue arrow marked shows positive divergence of Crude price in recent months with RSI giving a strong feel of crude getting back to post $50 mark. But before reaching out crucial levels on upside, we have a strong resistance level at $47. That level has been pivot before a thrust sell-off last year below the same. Secondly, it is exactly the level which will be considered as breakout level of the channel. Thirdly, Volume since recent lows have increased which is confirming that crude prices are bottoming out. And finally its also the SAR resistance mark. So overall my view on Crude is positive from the level above $47 and target on the upside would be next resistance level of $62 which is 200 Monthly average.
Recommendation: Buy WTI Crude above $47 with tgt $62 and stop loss: $41.80