Category Archives: Nifty

Was it a Wave 4th truncation today at 9120?

Nifty has been in consolidation since UP election results on 14th March which is almost a month now. We have been consolidating strictly between 9000-9250 but with strong stock specific movement. On the other side Nifty Bank has been out performing by holding 21500 level since quite a long time.

Looking at Nifty daily chart , as attached, today we have closed with almost a Doji which signals pause to current trend which was a down trend. Now if at all we open a point positive and trade above todays high than we may get somewhat like a morning star pattern which is a positive reversal pattern. Though on negative side we have more factors such as todays close below 20 day average first time after 6th jan and overbought indicators. But what makes me strong for a short rally in near future is strong breakout of market leader Reliance and strong option support at 9000 by PUT writers.  Also if we consider Wave count theory, then probably we have given a close to wave 4th today by completing Wave C of A-B-C zigzag formation in 4th Wave. So as of now there are equal forces of Bulls and Bears on Daily chart and only tomorrow move could decide market sentiments ahead. But would still recommend to remain long ton stock specific .

Strategy for traders: ” Avoid Nifty trade specifically, but  buy Reliance 1400 CE and buy 9000 PE Nifty.” …tgt 1480 on reliance…! 

Friday was just a speculator profit booking

Nifty has been on a dream run since start of 2017 but Friday’s last 30 mins shook long term traders and many of them squared-off longs in fear .After studying fall on chart , it seems it  was just a speculator’s profit booking as still we havent got any clear pattern of strong reversal on charts.

So as we all could notice on the chart, Nifty is taking strong support on a trend line which is intact since Jan and also travelling to 20 day average (Orange line) since mid-feb. Currently, both 20 SMA and Support line, are at 9120 making it a crucial support for next week. Looking at the option data we are building strong supports from PUTS writing at 9100 and 9000 so any dip in the market is a buy for a positional traders. Now if we apply EW Theory then we will now have a 5th Wave up with minimum tgt of 9350. So the strategy remains buy on dips with SL of 9000 for positional traders.

Better late than Never!

Good evening Readers. Last 3 weeks have been pretty much of a rally and it was difficult to say we wont get any correction until we opened gap up after UP results on  this Monday. Many of my blog followers would have felt they lost money as i was bearish on Nifty since my last post on 27th Feb? ….BUT THATS NOT TRUE… Why? …My strategy was to Short Nifty (8890) 8890 and Long reliance (1180). So strategy Finally closed today with Reliance hitting my than tgt 1325 and Nifty triggering stop loss at 9150. 

Profit on My strategy

Buy                    Sell                Margin                 P/L (for one Lot)

Nifty                    (SL) 9150                8890                55000                     -19500

Reliance                   1180               1325(tgt)            85000                    + 72500

So Net payout: Rs. 53,000 

So above strategy was a perfect example how a spread strategy could be the best thing to trade to avoid any side trend

Now what next after such a bullish closing?….

We have got the perfect Inverted H&S breakout on Weekly chart with Runaway gap up on Monday on back of UP results.. Though m posting a day early for a confirmation but it seems we will get breakout above neckline at 8980. And interestingly pattern target is coming up to 10600 minimum if we sustain above my stop loss. So now its better late than never. If you guys still feel left out of markets or investment , enter now with part investment and may be some after few months. But you must surely invest stock specific at current levels for long term. Few good stocks to invest are Tata Steel, Reliance and Sun Pharma. Want me to design your long term portfolio than can mail me at kush@luvkushfinserve.com

Strategy for traders:

Buy 1 lot of Nifty at CMP tgt 9350 and SL 8980 and buy 1 lot of tata steel with tgt 550 sl 480 and maximum loss: 52750 if you strictly follow my strategy.

Thank you readers for following my blog! Happy trading with strict stop loss.!

Bulls not able to overcome psychological resistance!

Nifty charts have been like a pendulum between red and green candles. But finally we have resisted near to 8980 or to say 9000 level which i had been mentioning in my previous post and it looks like it was the end of 5th Wave of a smaller degree. So next would be correction phase which could be a sharp fall or consolidation phase.  Fundamentally we dont find any trigger in coming weeks but may be politically we have UP election results to decide whether correction is going be a sharp fall or consolidation.

27_feb

Technically we can decide to support levels which could help us to decide degree of correction, 8780: if current fall takes support at this level, which also has a gap unfilled, than we could consider this phase to be a consolidation but if we fall below this support than it can be more sharp correction towards . 8480 which is another gap unfilled. Taking some snap from indicators, we are in overbought zone on daily charts since January and a correction is surely due this expiry from Option data setup. So now i would short fresh on the index…

 

Strategy for Traders: Short Nifty with tgt of 8780,8560,8480 while Stop loss could be 9150 and would hedge buy going long on reliance with tgt of 1325 sl: 1150

Strategy for Investors: Arrange for some liquid funds as in next 20 sessions its gonna be opportunity to accumulate stocks at 8600 and than 8450 levels on Nifty.

 

Market losing momentum

New year 2017 has been good for traders until now and even on monthly chart gave strong reversal for investors. But the rally couldnt be without any hiccups and we are going to have one. 8530-8980 was my range mentioned in last post , but couldnt touch the high of the range but can get closer to downside range.

15_feb_17

As we could notice in the chart, last 7 sessions have been sign of losing momentum. We got 7 consecutive red candles which  means markets closed below the level where it open for the day which clearly signs that traders are selling on any positive opening fearing markets to fall. This fear finally turned to reality today as Nifty closed below 4 day SMA and 9 day SMA after 36 straight sessions of positive close over the same. Even indicators such as RSI and MACD has given negative crossover to confirm bearish signs from price and MA crossover.

So now to sum up, still the charts for long term are positive but we may witness some profit booking before expiry which may take support at 8652/8600/8580.

Strategy for Traders: Square-off Longs and short with stop loss of 8860

Strategy for Investors: Buy on each dip with stop loss of 8410 for investors.

 

Achhe Din aa Gaye!

“Achhe Din aayenge” had been most chanted  slogan around India Since 2013 but now actually “Achhe Din aa Gaye” in last two months. Though Demonetization has been criticized by most the population of India but thats because short term pain they went through during Nov-Dec. But as saying goes “सब्र का फल मीठा होता है” , we as a responsible citizen of India should wait for Demonetization’s fruitful results in long term. Few of the fruits have started ripening such as economy outperforming other developed economy, decreasing Indian CAD, rising digital transactions, decreasing bank rates, rising tax payers, rising tax slabs, increased government spending on infrastructure, liberalized FII norms, passing on benefits to farmers and counting…So actually we are moving towards a phase where our each day would be labelled “Achha Din” and credit will go to citizens of India!

So coming back to markets and particularly to Nifty, we are sensing a strong pattern on Monthly time frame…..

1st_feb_16_mnth

As you all could notice in the chart above, circled candles symbolize a Morning Star pattern which is bearish reversal and being on monthly chart it has strong significance. But investor to get confirmation, we need to hold 7900 level for next two series. Looking at other indicators on Monthly chart, we can be sure of buying on each dip for next few month holding

Strategy for investors: Buy on each dip with stop loss of 8200! 

Coming to short term traders, i had a target of 8720 which was just achieved before closing on Budget day.

1_feb_17

If you look at daily chart above, we are in overbought zone and nearing to resistance line of the channel but that doesnt mean we will resist for cent %. If the momentum is still strong on stocks, we may still get 300 points rally this series as indicated by option data. So for a fresh position its risky but still may go with a a hedged spread above 8725 tomorrow.

Strategy for Traders: Hold existing longs with trailing sl of 8530 with upside tgt at 8980 and for fresh buyers go long on PSU Banks (Preferably SBIN tgt 290, BoB tgt188) with a hedging of 8500 PE. 

See you guys until we kick out 8980 or slip down 8530..!

Traders Pocket may get more Fatty!

Traders got their pockets Fattier this expiry after a long time but this MAY NOT be end. Budget to decided whether “Traders pocket would get more Fatty”! .  I did expect Nifty to touch this high two weeks back at my post: “Bottom’s up for Short term trader” where tgts were 8445/8563/8712 and we are just left with the last one. Such a fast rally now could even activate more high levels if the budget comes in favor of common men.

26_1_17

Now Lets talk Technically! As had been mentioning since last few post on Nifty, 8720 could be crucial level on weekly basis. That should be stop loss for short term traders who might have carried forward shorts. But for long traders party would continue above 8720. Indicators have totally turned positive but as per Elliot wave 8720 could still be a small resistance so that level should be played with caution! As we i have indicated with Green Lines, Nifty has given a probable Inverted H&S pattern and its still intact as stop loss which is usually at right shoulder low is still intact which is at 7800. Surprisingly target is at 9800 which is too juicy to trade with a small stop loss from current level but remember 8720 is cautious level. Though am not confident at fundamental side but technically we have few chances for a rally. We will get more confident if we close above 8720 but remember 100 day SMA at 8445 should act as a stop loss for all long trades.

Strategy for Traders: Stay with longs with final target at  8720 with trailing SL of 8445

Strategy for Investors: Hold 8500 PE as recommended before until next post!

 

 

“Bottom’s up” for Short term trader

Before you get my title wrongly, what i meant was that Nifty has given a Double Bottom confirmation for Short term trader which has taken traders on a high in quick time. In my previous post my target for traders was 8,250 which was achieved 2 days back but i was waiting for Double Bottom breakout confirmation whose neckline was at 200 day SMA, around 8287, making breakout more valid.

11_jan

Looking at the chart am sure many technical analyst would find current set-up juicy to trade for longs as firstly, we have closed above 200 day SMA. Secondly, we have got Double Bottom breakout, Thirdly, indicators are Juicy for positive movement and recent volumes too have been above 5 day average. BUT…….we as a medium term outlook we are still into corrective wave and this is just a Pull back rally and we have small resistance of 100 day SMA at 8445. Infact extent of pull back would decide the strength of correct wave. If this rally ends some where in the box marked which is around 8,563-8712 then corrective Wave could be a Zig zag and we may see new low below 7900 but if we witness this corrective rally to stop anywhere around 8,900 then it could be a Flat which means we wont trade below 7900 atleast for this year. So to sum up in simple words, traders still have some chance to trade longs.

Strategy for market participants:

Traders: Buy Nifty with tgts of 8445/8563/8712 sl: 8220

Portfolio Investors/Medium term traders: Start Buying FEB 8500 PE above 8440 spot level with sl of 8712

Spread Traders: Buy metal stocks such as Tata Steel/VEDL/JSWSteel and Short Nifty! 

 

Bulls take it over on last day

Nifty was in a confused box just two days ahead of expiry but bulls took it over at the last moment to prove Positive divergence as i mentioned before.

29th_dec

Though after yesterdays Dragon Fly Doji on Daily chart of Nifty many would have initiated a short trade…. Am i right??…But i didnt….Why and how did i get right?…because this was the perfect example of a Right candle but at a wrong time! Which means that a Dragon fly doji has most significant Only if its at the top of a previous rally and we were nowhere near top yesterday. So frankly speaking it would have been like burning fingers against the trend for short term traders. Though it doesnt mean long term trend has been a turnaround…This rally is just a short covering as i mentioned before. On The upside now we have strong resistance near to 200 Day sma at 8252. So short term traders should start booking on my long calls in the range of 8200-8250 in intraday…..

P.S. Strategy remains the same as last post…here is the snap…!! 

29dec

Confused Box!

Nifty has been pretty volatile in the range of 7900-8300 but the strategy is working well for the spread traders as i recommend in the previous post: ” Go long on stocks and short on index for next two expiry”…..And even long term investors are safe as they were recommended to buy PUTs on each rise…but short term traders Burnt fingers as stop loss was triggered at 8088! 

Today, after a strong short covering move on Nifty, still we are in a Confused Box of Technical signs!

27th-dec

As you all could notice with the Green Trend line with today’s low, we have got positive divergence on Nifty which is a good sign of short covering.  Even the options  suggest that next two days can be for the bulls after a long time. But i am not convinced thoroughly with Candle stick pattern for a strong reversal. Even all short term moving averages have given a bearish cross overs to a larger degree of Moving averages signalling that yet the move is not completely in hands of Bulls. On the upside of the box we have 200 day SMA at 8252 which could act as a strong resistance for short covering.

Even on the fundamental side, we may get some boost from news and FII before budget as the stocks are much undervalued but the quarterly results would surely drag Nifty to last lag of correction before we completely take a U-turn towards new high. So Long term investors shouldnt chip  in a hurry for Jan rally as this is just a relief rally for Bulls while investors will surely get a better chance after Budget and before March ending.

So strategy still remains the same:

Short term traders: Go long with Stop loss of 7920 and Target 8250

Safe traders:  Buy PUTS for February on each rise with Stop loss of 8720

Spread Traders: Go Long on selective Stocks and Short on Index