Author Archives: Kush Ghodasara

Time for investors to be Active!

Nifty has been quite volatile since last few expiry but during this time it has given a birth to probable inverted Head and Should pattern on weekly charts. Neckline of the pattern which is considered to be breakout line of the pattern was at 8370 two week back but confirmation is considered only if we get 2 close above the same and i am expecting that tomorrow being last day of the week we are surely getting a second close above neckline. 


Since Brexit fear has subdued we have seen some volume buying next week after the event took place which surely sign that global investors are trusting our economy over other developing countries. Even the IIP numbers have supported us! A buzz around the market of GST bill passage in this monsoon session could lift the markets to my inverted H&S tgt of 9800! Though this doesnt mean we wont see any corrections on the course, as i am expecting a correction anytime to 8370 and could be even below.  But my stop loss would be somewhere around right shoulder 7900.  Will keep you guys updated if there is any false sign of breakout to this pattern which is also possible in some cases but only time would suggest that so risk takers should surely start buying on dips for next few weeks and hold till diwali


Market closed at resistance

Finally today both the averages, Nifty and Nifty Bank, have converged at on charts! Until yesterday Nifty bank was under-performing Nifty by almost 1% but that gap has been filled up today where Nifty bank out-performed Nifty with almost that same lagging difference. Indicators are yet showing some strength for the bulls on weekly charts but today markets closed near strong resistance on the channel line.

Nifty Close near resistance line at 8525

Nifty Close near resistance line at 8525

Nifty bank closed near channel resistance of 18685

Nifty bank closed near channel resistance of 18685

Though it doesnt mean that markets would fall from here but surely a big move is coming either way from tomorrow. Looking at the IIP and CPI just released, it seem we shall see some more movement upside but 8577 is strong resistance for Nifty where its recommended to book partial profits while above the same we may see 8700 levels. For Nifty Bank 18700 is strong resistance while above the same we can get 18950. Indicators are already overbought but looking at derivative data we may see some more positive movements. Though for traders i would always recommend stock specific trading rather than Index specific.

Nifty bank has all chances to out-perform this week!

Nifty bank has been a under-performer in last two weeks compared to Nifty Index.  But now looking the pattern on Nifty Bank daily chart is moving in a strong up channel and is appearing Upper resistance line while Nifty has already reached that trend line on similar pattern today.

Nifty Chart appearing resistance line of upside channel

Nifty Chart appearing resistance line of upside channel

Nifty Bank index appearing channel line

Nifty Bank index appearing channel line

Technically, indicators have also given internal signal line crossovers to show still valid momentum for the upside on Banking Stocks and Index. News from offical sources say that Government may soon infuse capital in PSU Banks  which could fuel rally in the index. Though going fresh longs at CMP would be bit difficult as Risk:Reward Ratio aint favorable but those who have a long position can hold with the targets of 18700 on the Bank index. While for a trailing SL can be at 17930.

Cautious view to be continued….

Weekly channel which i mentioned last week is still intact and the range which was crucial for breakout has not been breached yet signalling a tight range bound movement this week. While being volatile Nifty almost burnt fingers for day traders. Technically speaking, Nifty weekly chart is showing mixed signs which means cautious view to be continued….


Looking at indicators on weekly chart still momentum seems to be continuing for the upside rally as MACD is just crossing over zero line which considered to be buy a signal and even looking at the global cues last night we can be rest assured than we shall breach channel resistance line on monday which is at 8418 now! But the most dangerous sign on the card is bearish crossover of 50 weeks average below 100 weeks average before 3 months which is still not reversed. Secondly daily candles are not showing any signs yet of convincing upmove! Such time in history are considered to be volatile and we are experiencing the same moves currently. But to get more biased on the breakout, option markets are suggesting a strong upmove in coming months as Put writing is witnessed most at 8200 while fresh call writing was seen at 8700 so the strategy would now be going long blindly on channel breakout at 8418 next week with 8265 as Stop loss.

Tune in to channel “W”


Nifty Weekly Charts

Nifty has been quite volatile since last few weeks but during this course it has created a upside sloping channel on weekly charts as marked in the attached chart. Momentum seems to be strong for the upside rally in coming week or two as indicated by weekly indicators. But now daily charts are bit confusing to our weekly momentum or may be we can say that markets could resist at 8400 level which is the next week channel resistance level on weekly charts. We have got a shooting star on daily charts on Friday which is creating some sign of caution to traders!

Daily chart

Daily chart

So may be i would recommend now to be cautious on initiating a fresh longs from current levels but rather we may hold c/f longs with sl of 8265 and may be book profits on long around 8400 anytime next week before going shorts. So as of now my recommendation is to wait and watch for 8400-8265 range to square off existing longs before initiating any fresh positions on Index.




A referendum wil be held on Thursday 23 June, 2016 to decide whether Britain should exit (Britain’s Exit – hence the term Brexit) or remain in the European Union.


The votes in which everyone ( or nearly everyone) of voting age can take part, normally giving a ‘Yes’ or ‘No’ answer to a question. The side which gets more than half of all votes cast is declared as a winner.

All British, Irish and Common wealth citizens over 18 who are the resident of U K, along with U K nationals living abroad who have been on the electoral register in the UK in the past 15 years.


A decision to leave, this would be a first by a member nation.

The European Unification

The European Economic Community was launched in 1958. It became the European Union in 1993. The Euro Currency was created in 1999.

Brexit 1

If there are majority votes – in favor of LEAVE Britain


ØThis would deepen the crisis facing a continent already struggling with economic weakness, debt problems, large-scale migration and growing geopolitical instability to its south and east.

ØWithout the U.K., which alongside France dwarfs the military capacities of other member states, the EU’s defense, security and diplomatic capabilities would be hit. Only Britain and France have sizable expeditionary forces, nuclear weapons and United Nations Security Council vetoes.

ØBritain’s Exit from EU will have major repercussions for Britain, EU as well as economies across the world.

ØIncreased Paperwork: EU citizens in Britain and Brits living in other EU nations would have to update their immigration statuses. Companies working in both the UK and the EU would have to verify that they’re compliant with two sets of laws.

ØBlow to UK Economy: The UK government estimates say that Brexit could cause the country’s economy to be between 3.8 and 7.5 % smaller by 2030.

ØThreat to UK’s ‘United’ Status: Brexit could encourage England, Wales, Scotland or Northern Ireland to appeal for quitting United Kingdom.

ØRipple effect for global economy: The United States will bear the major brunt of a Brexit being UK’s biggest trading partner. President Obama has warned that it could take 10 years for Britain to negotiate a new trade deal with the US Goldman Sachs, JP Morgan, Morgan Stanley and Citi group together have contributed to the anti Brexit campaign.

If there are majority votes – in favor of STAY Britain


ØIf Vote works in favour of Britain then Britain would get a special status  within the 28 nation club.

ØMigrant Welfare Payments: Cutting the amount of benefits for low paid migrant workers from EU nations will dissuade them from flocking to UK in large numbers. Migrant workers, however, will still be able to send child benefit payments back to their home country.

ØKeeping the pound: Britain will never join euro and has secured assurances that the Eurozone countries will not discriminate against Britain for having its own currency.

ØProtection for London’s biz: Safeguards for Britain’s large financial services industry to prevent Eurozone regulations being imposed on it.

ØRunning its own affairs: For the first time, there will be a clear commitment that Britain is not part of a move towards even closer union with other EU member states – one of the core principles of EU.

The mixed reviews of EU countries


  • A Pew Research Centre survey published this month showed levels of disapproval of the EU in many countries as high as or higher than in the U.K.
  • In the Netherlands, 46% had an unfavourable view of the EU; in Germany and the U.K., 48%; in Spain, 49%; and in France, 61%.


Brexit 2

Source:- Pew Research Centre of Global Attitudes Survey, The Wall Street Journal.


If Britain Exits – its impact on India


ØWith Euro losing one of its stars, India too can feel sighed.

ØRupee may depreciate due to double effect of foreign fund outflow and dollar rise.

ØThis will increase petrol and diesel prices to an extent.

ØThe government may want to reduce additional excise duty imposed on fuel when it was on a downward trajectory. This will increase fiscal deficit, unless revenue increased.

ØPrices of gold, electronic goods, among others will increase.

ØCheaper rupee will make Indian exports including IT and ITes, competitive.


Disclaimer: This is my personal view so reply on them at your risk



Nifty back to its medium term trend

We have seen some surprising pull back from the lows on Nifty which was surely not expected in such a quick manner. Though overall trend for the mid term seems to be positive but Nifty was trading in a downside channel on the daily chart which has been breached today with heavy volumes moving back towards a medium term positive trend outlook. Though still 8265 has not been breached on the upside but looking at the momentum it feels we should do the same soon. Until now i was just recommending longs on stocks but now it seems we can go long on indices after we move beyond 8300. Though i wouldnt take any risk on naked futures as Brexit is still lingering. Overall Nifty has closed back above all short term averages and now the resistances seems to be around 8577 if we sustain 8200 for this expiry

Nifty channeling

In my last post i mentioned about probable evening star pattern on 9th June and its still holding its importance on Nifty chart. But to support its significance we have got two more components now. Firstly, We got shooting star candle as squared in the chart and secondly, now Nifty has confirmed its path in the channel with is trading downwards. Though my overall mood is positive for a view of 6 months but minor correction was expected as i mentioned in last post and my first tgt 8081 has been achieved while now my second target is active which is 7935. But the stop loss remains the same at 8265 on closing basis. May be a intermediate support might be at 8040 which is channel support line. Being BREXIT nearby, its always advise to hedge your position where as in our case we can buy 8300 CE to hedge our short on Nifty.


Erase loss with Eros

Media and Entertainment industry has been hot favorite since late 2014 and we have seen all stocks from the segment emerging out as multi-bagger. One of the stock which had initiated rally in sector was Eros international which moved from almost 140-640 in just a years time who was joined by other stocks like PVR and Inox Leisure. At current date PVR is doing the best followed by Inox Leisure and Eros is last because of a strict Sell-off late last year on accounting scandal allegations. But now i am getting a strong feeling of entering Eros again for 3x movement minimum from here. There are few factors which are giving me strong bias on my view. To start with most crucial point, its about accounting fiasco allegation which its US holding company was facing has been put down after respective appointed committee cleared them after investigation. So fundamentally is surely convincing to investors and analysts who has lost hope in management. Few reports even say that corrected practices would be more profitable to indian counterpart in terms of Revenue per user from ErosNow app.  Secondly this Calendar year they are entering almost 4 new India regional movie segments which could add some large portion to Gross sales. Concluding fundamentally, they have almost 65 releases this year in 5 different languages which just 2x their sales from last financial year if everything goes as planned

Coming to technicals, I just spotted most dependable reversal pattern on weekly charts i.e., Inverted H&S. Though we have just kissed Neckline this week, but there are all chances of getting a breakout over the same next week. Weekly indicators are oversold and have just turned bullish by having internal crossovers to their respective averages. Thirdly, as marked on bottom of the charts, volumes have been rising in last three weeks supporting upside price movement. Fourthly, as circled we had got a Morning star pattern before 2 weeks and its confirmed with two weeks close above the same. 278 is resistance as marked with red line as it was the levels where most volume in a week while falling had taken place which could mean it could act as a supply zone. So now all factors is suggesting a sure Buy for long term but medium term trade could be taken on Technical breakout next week.

Strategy for medium traders: Buy above 219  with targets 278/349 sl: 172

Imperfect says ‘I-M-Perfect’ ??

Sometimes patterns wont be perfect but still its says that “I-M-Perfect”. Though today many technical analyst wont notice circled pattern as perfect evening star pattern but i would say that this COULD be imperfect evening star pattern and could give some points reversal if not as much as a perfect pattern would give from such a peak. If we talk about some factors to support this imperfect pattern, 1) Recent Rally: We have almost got 600 points rally from low in prior 12 sessions so now its time for some correction to this Rally. 2). Overbought on daily: Indicators on daily charts are overbought suggesting some sell-off though weekly indicators are yet not signing any sell-off which means that any correction in next few sessions would be a strong opportunity for medium term traders to go long but traders can trade short. 3) Sector weakness: Few front line sectors having weight-age on index are also showing weakness on charts such as Nifty IT and Nifty FMCG. 4) Economy situation: As rajan said in recent policy that we have fear of short term chances of inflation which may have some sentimental sell-off. So to end, we can expect some profit booking for short term trade but overall trend still remains intake. Support on downside: 8081,7935 while resistance on upside 8265 on closing basis.