Author Archives: admin

#69 Nifty Update

“DISCOUNT… DISCOUNT…Sale upto 15%”…this is what Dalal Street is stating… Since last month high of 5700 market has discounted almost 10% to 5072 (close)and you may see market discounting upto 15% to 4800. But question arises is this the right time to buy??? or you should wait for stock clearance sale by Dalal street?? ….Markets over the globe are extremely volatile.  There is mixed reaction amongst the investor. Yesterday Bank of America got a notice on fraud of $10 billion on mortgage loans (as per Mint top page) which made stock to fall 20%. It seems market has already discounted the downgrading of US but now people is worried about EU debts and further downgrading of Other countries by S&P. S&P 500 for the first time ever saw all its 500 companies closing in red yesterday. Each and every channel is saying it as a blood bath but actually its a good thing for long term investors. We will get the best buy price at current levels or may be little low. Cash markets wont earn you handsome short term profits in such volatile..if at all you do i guarantee that you will lose it in next trade. Then what will work in such volatile market?? DERIVATIVE Strategies… Minimum Risk and Maximum reward..Best strategy for now is “Long Strangle on NIFTY”…Buy a 4700 Put @ 53 and buy 5200 Call @ 105.. Tgt will be the strike price on either side.. It’s risky in the sense that at least one target should be achieved before expiry….Now you might question that why i have taken a little nearer strike price for call….its because now market seems to recover on short positions practically…there is a gap between 5325 levels which might be filled up and on down side if it falls then it will be at a go…On other side the bid for buy for 3 times more then sell on 5200 call so people are bullish for sure… You must square of your position on the either strike price. People are bullish on Indian markets and expect to consolidate at this levels. Long term investors should buy 25% of its desired quantity and wait for more consolidation phase for rest of the purchase. Today Federal Open Market Commission (FOMC) is gonna met up to review QE3 and decide on interest rate. So any change in interest rate will make market go volatile on either side. Technically market is in oversold condition but EWT suggest that market will consolidate around 4800 levels. Market was almost near to that level and so we can say that market has started consolidating. There is no strategy presently on NIFTY except the above mentioned Long strangle but start booking some profits on your shorts.
NIFTY levels for 10th August:-
R-5118                  S-5056
R-5168                  S-5000
R-5230                  S-4987
R-5280                  S-4900

#68 Nifty Update

NIFTY reacted as expected to Downgrade of US rating. NIFTY closed at 5118 down 92 points. NIFTY had opened gap down at 5082 made a low at 5054 and had recovered almost flat to fill up the morning gap. S&P downgrading US has been the most shared topic around the world. All the markets had been volatile throughout the day but we have to wait and watch how does US DOW reacts to the news. European futures were trading in negative zone but markets opened positively beyond expectations which lead our market to almost positive zone. But eventually Europe also lost and couldnt hold up their hand to bulls. Since last 2 days intraday recovery has proved to be false making long term investors greedy to enter long  positions. Market all over the world are very choppy and its difficult to say that any market has bottomed out or stabilize. We should not panic but shouldnt take long positions unless confirmation of stablization or reversal. As nicely said by Sanjoy Bhattacharya in latest forbes issue that retail investors often get into stocks at wrong time i.e. at peak and then the stock slips and they convert their investment period to long term. He has rightly said, the most important thing for your investment is the right time to sell rather than right time to enter. For example he said that all long term investors should have stop loss of maximum 15% and should cut losses at that level. Even if you entered at the peak you must cut your position on downside. He said while reviewing your
portfolio your must first sell of BBBB shares and not shares in profit.. You might be guessing whats BBBB??? its Bent, Broken or  Beyond Belief movement. Now talking of long term we must look at
logistics listed companies. Logistic will be a multibagger sector where you can make tremendous long term profits. why??? Its because government of India in last october has set up a Ware Housing
Regulatory and Development Authority(WRDA) which has been assigned to develop warehouses all over the country for proper storage of commodities including fruits and vegetables. Farmers are not getting
best price because they sell off commodities to middlemen at lower price to get liquidity so government has decided to give proper logistics and warehousing facilities to farmers and WRDA has said they
are gonna set up around 300 certified warehouses in no time. So look out for warehousing and logistics/transport companies on stock exchanges for making long term investment. Coming to NIFTY Technicals market is in oversold condition. MACD has given bearish confirmation. You may expect short term rally upto 5350 but market will be bullish only if it closes above 5390. So be long only above 5400 level. Risk takers can short NIFTY with SL of 5390.
NIFTY levels for 9th August:-
R-5168                  S-5056
R-5230                  S-5000
R-5280                  S-4987
R-5313                  S-4900

#67 Nifty Update

Last week was slide towards 52 week low at most of the global market. NIFTY saw a low of 5116 on Friday on the fear of global weakening with US being the most feared economy. Debt ceiling bill was signed by Obama on 2cd August but he said that he wasn’t happy signing the deal because he thinks it will further worsen economic conditions. To add fuel to his concern, S&P on Friday after market hours downgraded Americas Credit Rating by one Notch to AA+ from AAA. This is was first time since 1941 that US has been discounted from its AAA Rating. S&P official said that they had already warned US government on letter dated April 18 that anything less than $4 Trillion would be insufficient and force them to downgrade rating. And same happened as US Passed on $2.4 Trillion for debt restructuring which resulted in S&P downgrading US credit rating. Now you all might be thinking what will be the effect of downgrading of Credit in US? So here’s what I understood and read…. Downgrading the US credit, consumer credit interest will increase which I think will result in economy slowing down as purchasing power will go down.. Second was that Bond yield will increase which will have two effects 1) people will start parking money in bonds rather than Banks and new business decreasing the supply of money in people hands 2) this will increase the US treasury department’s interest payment costs by $100 billion per year from last fiscal payment of $414 billion which was 2.7% of its GDP. Thirdly as per the reports of IMF, Strength of US Dollars on total currency reserves of each currency by all the country has been reduced to 60% from around 72% in the 2001 which means countries have less decreasing faith on US dollars as a asset. So in short this Degrading of credit rating will have cascading effect on US economy for long time which will affect many other countries especially Asian countries that hold the major part of Treasury bills. Now coming to Indian Economy Moody and Fitch rating agency have estimated India’s growth at 8.2% from previous around 9% so has the Finance department. But RBI has estimated only near to 8% growth. All analyst and firms expect India’s Inflation to be around 9% .As per Moody RBI is expected to Increase rates further to cool inflation. So at this week we can conclude by saying that none of the stock market has anything for investors….Investors as I have been saying should invest in gold at present.
Now technically speaking NIFTY has breached down all the short term levels which completed at 5200. Now Market has created a gap at around 5230-5330 levels which has to be filled up someday soon. But analyzing the market conditions all over the world and taking in longer picture of NIFTY I have tried to plot Elliot wave on NIFTY weekly chart. NIFTY has been in bearish channel since new high last year at 6338 as we can see. If we take initial point as the 2009 bounce back from 2252 then first wave completed at 6338 and we are currently in process of completion of Wave 2. Now as u can notice Wave 2 have 4 possibilities which is 5390 (where the gap is), 4788, 4300 and 3800 and we have respective targets of Wave 3 at 9477, 8861, 8372 and 7896.  Seeing the global condition I feel market will at least bottom out at 4788 levels and might see 4300 levels if the conditions in US and EU see the worst like 2008. 3800 level is too difficult to achieve unless something unusual occurs in the world economy. So I would suggest to stay away from the stock market unless a clear consolidation or reversal is seen in the markets. Risk takers can surely be short in derivative markets with near stop loss on NIFTY at 5390 and long SL of 5586.
                

#66 Nifty Update

Bull’s Eye!!!! (Though markets were bearish :P) My target on NIFTY 5200 achived…call given around 5600 levels. 🙂 NIFTY closed down 120 points at 5211 on EU Debt crisis fear. US economy is also feared to
have double debt crisis ahead which is making investors fear all over the global. Yesterday Denmark government refused to rescue its bank from debt crisis which is amounted  to $35 billion. All the EU
countries are under threat while US is expecting a recession ahead. All the analysts and politician where saying that Indian markets are strong and dont fear and panic….But what do you think??? is our
equity market really strong?? NOOOO…..what good reason do we have to make our investors smile?? All the sectors as i have been mentioning are having one or the other scam or companies involved in scam. Talking about demand of products then it has seen a way negative change because of increasing interest rates. All the indian companies are under utilizing its production capacity whether it be steel
sector, auto sector or FMCG sector. This bubble is bigger then what we are thinking. May be i feel this is the result of US printing dollars as and when required which has increased the dollar supply to each
countries who has been trading with US. Now on the fear of US crisis all the countries specially china who hold the largest chunk of US and Europe treasury bills, are buying gold instead of US dollars and
Bills. This is why gold has seen rise in-spite of other commodities degrading. Talking about crude it has seen a large fall in demand specially over US and europe which is resultant of its current price. This is what i have got in my mind but people do share if you think I need to correct..Do share some more view and news if you get. Technically speaking market has created a gap today on opening. It has to be filled for sure but before that it may show some down side. All the indicators on daily and weekly chart has been breached and showing bearish movement ahead.
NIFTY levels for 8th August:-
R-5280                  S-5190
R-5331                  S-5145
R-5382                  S-5100
R-5416                  S-4900

#65 Nifty Update

🙂 🙂 :)….you all might be wondering why i am happy even though market was down??? Its just because what i predicted NIFTY’s target has been achieved today.. 5330. Market opened up with some profit booking but that was as a said to fill up the gap which was created yesterday. Market closed at 5331 down 73 points. Global cues are like a gloomy picture and they are not clear which way to go which is affecting the emerging markets such as China and India. Indian markets are very choppy at this movement as nothing good on fundamental side. If you study all sector personally you will find that none of them has anything new or extra-ordinary to say…rather they are degrading in existing business….question arises where is all money going??? Answer is 1)gold/silver and 2) blocked in real estate. People since 2008 has been investing in commodities and real estate because high returns and safe better over equity market. But now real estate market has been cooled down and i feel investors liquidity is blocked and on other hand who has invested in commodities market feel it a better place then equity and why not ??? You will surely get your cost price in commodity if not today then tomorrow but its difficult in equity market. World has to go on and so will each market but intensity of market will change…Next decade is for commodity market. Technically speaking today Market FILLED up my gap at 5330 which i have been mentioning since last one month. Now you might see market bottoming out around 5200-5300 levels. But if its broken then it may take support at 100% fibonacci retrenchment support at 4800. RSI and all indicators are bearish. Strategy is yet sell on rise on NIFTY with SL-5472.
NIFTY levels for 4th August:-
R-5382                  S-5280
R-5416                  S-5253
R-5442                  S-5190

R-5472                  S-5156

#64 Nifty Update

:o :o…Shocked or cant believe??? that was the expression of many investors when they switched on TV while they were brushing because they saw SGX NIFTY trading 80 points down below 5400 at 8am. NIFTY opened at 5402 at pre-open on weak global cues and close at 5404.80 down 51 points from previous close. US debt ceiling bill was signed by Obama yesterday but he mentioned that ” i am signing the bill but am unhappy with deal” and fear that US debt market might be downgraded on Rating made investor bearish and saw US markets down by 2%. Ripple effect of last night session came on Asian markets too. We might see further downfall in foreign market as said by many analyst but they are underweight on Indian markets. They expect that Emerging markets such as Indian and China too be attractive and will see fresh buying before the Developed markets. Many queries were spurting at me regarding investment in NBFC’s and Banking stock but i suggest to wait. At presently banking stock are facing NPA problems. NPA has risen by 5 times on YoY basis as per a report in a newspaper while advances has declined in almost all sector except petroleum and housing loans. So earnings of Banks will be hurt this quarter but on the other side monsoon is expected to be fairly good all over the world and its expected that commodities price is to ease which will ease inflation which will results to end of monetary tightening by RBI. So i would suggest to avoid fresh buying in Financial Sector..rather go for COAL INDIA , ITC , TITAN , ONGC or SUNPHARMA in present situation. Technically speaking market has created a new gap down around 5435 on opening and again has shown indecisiveness between bulls and bears with creation of  “DOJI” today. MACD and RSI has given a clear sell signal but stochastic shows some upward move. A “top rounding” pattern has been seen in NIFTY which will be completed at 5240 levels. I suggests selling NIFTY on rise with tgts 5340/5280/5240/5200 sl 5586
.NIFTY levels for 4th August:-
R-5418             S-5380
R-5435             S-5356
R-5472             S-5320
R-5516             S-5280

#63 Nifty Update

Ssssshhh!!!!! Markets brought silence amongst the trading room… NIFTY opened in red and closed at 5456 down 60 points after making low around 5433. Global cues are indecisive which is making market range bound. US debt ceiling has been raised but still many experts raise question that is this the end of recession??? It is difficult to come to the decision that market could rally from here. Europe crisis are still on edge as Greece are asking for more money. Someone has rightly said in last Forbes India  issue that all such countries have been addicted to demanding liquidity. More and more liquidity bail out you provide more and more lethargic they will become in making some strict change in their management which could improve the future of organization/country. Domestically most talked is Mining scam at present which is affecting steel companies. Now many other state are also going to inquire same issue with the mines within the region..Is this going to bring out more companies in this scam????? All the results of last quarter are just average or below average not making any investor smile. But e-commerce is the most growing stage of the sector. A research says retail industry is 500000 crore market while only 15000 crore of it is e-commerce so wide scope in such sector. Technically speaking daily chart has witnessed a “evening star” pattern which is a bearish pattern. MACD and RSI has given bearish crossover. Today NIFTY  achieved both my targets 5472 and 5442.. Nxt targets are 5380 and 5340.
NIFTY levels for 3rd August:-
R-5472             S-5440
R-5516             S-5380
R-5544             S-5340
R-5586             S-5320

#62 Nifty Update

That was nice opening by Duo i.e., NIFTY ans Sensex to new month of August. NIFTY gap up on account of Positive news from US and closed 34 points up at 5516. Yesterday night bill of increasing debt ceiling in US was passed by both the house. This was the driving factor for todays positive markets globally. Now 2cd August is the deciding day for the US treasury department but i feel good news are already discounted so might not see a boosting rally but if the treasury department declares Default then u may surely see bears running in the markets badly but chance of that are very much less. Indian economy is disturbed on the Illegal mining in karnataka. On saturday karnataka CM resigned due to this scam on papers. Adani Enterprise covered back almost 7% today as company announced some disclousre stating less operations at mines in Karnataka and as we all know Adani owns mines in Australia so its production won’t be hampered. On the other hand Telecom sector scripts are seeing new highs on the raise of tariffs but selected companies in some circles. Every month we have some or other scam coming out in India…Till what time will this continue??? Scams are hampering corporate growth…Arent they?? Technically speaking market has closed below all the moving averages and RSI and stochastic has shown some chance of covering while MACD is yet flat
over central line. A third consecutive Doji has been formed on NIFTY chart which is sign of indecisiveness for the markets between Bulls and Bears. So i suggest yet to be cautious on fresh longs until tomorrow.
NIFTY levels for 2cd August:-
R-5544             S-5508
R-5567             S-5472
R-5586             S-5442
R-5616             S-5406

#61 Nifty Update

NIFTY was taken over by bears since Tuesday of the week. On Monday, NIFTY confirmed the morning start which I mentioned in NIFTY view of my last Sunday. But we could notice that for the second time in last 1 month NIFTY could not confirm its breach over the strong resistance line. That resistance in the graph has been validated 6 times in last one year which means that market yet not in full control of bulls. Last week RBI announced 50 bps hikes instead of expected 25 bps hike which failed to confirm bulls. Second biggest domestic news was that of illegal mining state of Karnataka. Many well known companies have been stated in this 2cd biggest scam after 2G scam. Companies such Adani Enterprise, Sesa Goa and JSW steel to name few are mentioned in scam till now. This has focused import of iron ore from outside India to continue production. Now next week 2cd August is the Deciding day for US debt market which will have effect on world economy. China and Japan are the major chuck holder of US treasury bills so they are praying that US doesn’t default the deadline. So wait for some more time to make fresh long positions. Technically speaking chart has witnessed two consecutive Doji’s of which latter being a “gravestone doji” supporting bears. 14 Day RSI has breached 50 level mark to 43 signaling a sell for NIFTY whereas MACD is just to cross central line for the bears. As I have been talking whole month about the “unfilled gap” at 5350 now its time for it get filled. With the current situation of market it seems market will for sure come down to fill it up. Strategy on NIFTY would be to sell with the SL of 5565. But be long on market only if NIFTY Closes above 5644 level thrice this week that too consecutive close.
NIFTY levels :-
S-5442,5408,5385,5350,5350,5190
R-5529,5555,5568,5586,5644,5702

#60 Nifty Update

Sorry people for not posting yesterday due to some prior commitments. NIFTY expiry was below 5500 which is a bearish sign. Today market close around 5480 levels almost flat with mixed sentiments with investors. Domestically today we had may major events which were stock specific. Karnataka Illegal mining scam today named Adani Enterprise which made stock fell 23% in no time. Karnataka government has banned all 40 companies in the states which has hampered the production of steel and are facing shortage of Iron ore. Companies have approached foreign mines owners for the import of iron ore for near term production. This is the second biggest scam after the 2G Scam. On other hand ICICI bank posted its result today and it was way beyond street expectation making stock boom in late hours of tradings. Globally US markets is trading volatile on fear of Debt crisis while European Index are trading in red as Italy, Spain and Greece are still facing challenge to stable their economy. Technically speaking market is in bearish mood which sees support at 5442 , 5400 and 5350 levels. I recommend to wait and watch on the NIFTY untill 2cd august which will be the day of announcement of US Debt market decision. Risk taker can buy a 5400 put and 5600 call to have a hedged position.
NIFTY levels for 1st August:-
R-5508             S-5442
R-5524             S-5408
R-5540             S-5380
R-5586             S-5345