Category Archives: Nifty

#5 Article: "Fragile-Handle with Care"

                          Tremendous performance by Nifty last month!!  Last Month issue i did mention to go long with targets of 6045/6150 on Nifty and we achieved it with no stoppage. But now nifty is packed up with a box and its delivered with sign “Fragile-handle with Care”. Bank Nifty was surely the outperforming index as intimated in my last month issue. Now its time we may see some profit booking ahead. We might not see some vigorous downside but we may seem some range bound movement of nifty between the range of 5855-6350.
                         RBI’s rate cut anticipation was the reason for the nifty’s start up run while rate cut on 3rd May bought more fuel to run up nifty chart. Even the inflation and WPI had improved in favour of the economy which got investors into much of confidence. But we are still not full recovered from crisis. Talking about global markets, they all are inching up at the life time high. US had jumped up on better employment numbers but a bloomberg issue mentioned that bureau of labour statistics in US had said that employment at real level hasnt inched up as suggested by numbers. Ofcourse number arent manipulated but they show only the educated class of labour where as the uneducated which accounts for major chunk of employment in US is not considered fully. Employment of lower class profiles has not picked up and many labors are facing problem for their living. So yet we cannot say that US markets have fully recovered from 2008 crisis though their financial market depict it. US companies have announced good set of numbers this quarter which was the strong base for the move along with numbers. Talking about Europe indices, they are urging up but their economies are at the state of double recession. Nothing have improved much in europe but they are driving themselves along with their western counterparts. Nor Industrial production nor employment have improved in Europe. China on other hand have halted imports of base metals as their are experiencing a slowdown. China’s is facing problem of shadow loans (which is unregulated loans) which is accounting for almost 200% of GDP while regulated loans are just mere 30% of GDP. Due to strict formalities even  local government have relied upon shadow loans. If the slowdown continues than this could be another bubble like in that of US. Japan had also devalued their currency for the first time which was the only reason for upmove in the financial market index, where as fundamentally their economy has not recovered from Tsunami crisis. So we could conclude that fundamentally still all the economies need strong reason to be considered recovered.
                                                 Coming to technical’s on Nifty chart,we have seen some bearish characteristics last week. After a rally upto 6230, we saw a Bearish engulfing pattern on weekly chart as seen on the attached graph. This pattern is considered to be bearish sign on the top and we were on the top when this occured on the chart. But taking into elliot wave, nifty has already retraced 38.2% from the top with respective to last third wave rally. It suggest consolidation phase on the chart. All the indicators are in no-man land suggesting the move either way. Secular trend is ofcourse bullish on monthly chart but daily and weekly are suggesting some profit booking with is in-line with fundamental view. That’s why I meant that nifty is fragile at the moment and could go long way but on either side. Our strategy on nifty would be wait and watch and take position on either side of range 5855-6118. I expect commodity stocks to outperform next month and my picks would be TaTa Steel, JSWSteel, Coal India and Ster.

Note: All the data and graph is as of 27h May 2013 closing
Disclaimer: I may have personal position in index and above mentioned stocks. Views and News mentioned above may have Errors and omissions. My views are biased more towards technical analysis. Please read and study the market carefully before investing on my idea. For any suggestion contact me on my email. Some words mentioned in article don’t mean their actual meaning. They are correlated for market. 

#4 Article: Traders are betting on IPL players

Indian Premier League is the most trending topic, as of now, for discussion all over the social networking sites as well as social gatherings. Interesting to note that even stock market traders are talking about them but for them IPL is “Index Premier League”. Almost every day (for investors every month), they try to find which sector index is out performing NIFTY and they try to bet on the best stock from that index. 
Looking at the NIFTY’s track since my last month issue’s article for “V-share” magazine, it has been a dream run for the stock market. I had mentioned that India was struggling with politically instability but within that a turnaround in the form of lowered inflation and better IIP numbers brought some life to bulls. Banking sector analysts expecting a rate in next month’s bank policy as inflation has cooled off. Policy was to be announced on 3rd May but financial sector has already shown their interest or biasness towards the possible rate cut. On 13th april I did posted on my blog that banking sector will lead nifty and we noticed that it outperformed it with a return of 9.9% while NIFTY has returned 6.2% over the same period. This was  surely in anticipation for the rate cut but now markets need some other reason to move on.
Since expiry yesterday we saw some profit booking in banking stocks and nifty dropped down today with sweeping 44 points. Earnings season has started and many frontline scripts have announced their result but IT has been disappointing street. Last decade i.e., 2000-2010 was IT boom for the markets but I feel next decade it going to be banking decade for Indian market upto 2020. Reason?? We have seen that Internet or computers have reached almost each state and to be specific even few villages but Banks?? Yet to be reached villages. Private sector banks have started entering villages and that will be reflected on their balance sheets in coming years. 70% of the GDP constitutes of Agri products and we have seen government announcing subsides to farmers. But now recently they have agreed for special “Kishan Credit Card”, loans etc which all will be credited directly to end user i.e, farmers bank account. So primary need for all farmers is to have bank account and for this we need banks in villages. With this facility farmer would avail many other banking facilities which would benefit them as well as Banks balance sheet. For this simple economic reason I feel next decade is going to be banking dominated. 
Now as per Elliot wave bank nifty has a long term target of 21000 with leading private sector banks such as ICICI bank, Axis bank and HDFC bank, while on small banks we can bet on DENA Bank. Last time I mentioned that nifty was in no trade zone from 5400-5630 and bullish above 5630-5850. We have seen some strong bottoming out around 5600 and I hope traders and investor were long over that level. Herewith the attach graph is Nifty’s month chart and we could notice that it has strongly shown characteristics of perfect Elliot wave. In technical terms we are in 5th Wave of the larger third wave of the super 3rd wave of Grand 3rd wave. I know terms are lil tricky but to say in simple terms we still are in secular bull market. Every dip is a buy for long term
Strategy on NIFTY: Nifty could see some profit booking now upto 5773 and max upto 5610 but take this as a buying opportunity rather than to short for those who missed it. I expect markets to say consolidated above 5770 but 5610-5655 should be respected. So buy on each dip before 3rdmay with short term targets of 6045/6150 on nifty with a medium term target of 6500.

Note: All the data and graph is as of 26th April  2013 closing
Disclaimer: I may have personal position in index and above mentioned stocks. Views and News mentioned above may have Errors and omissions. My views are biased more towards technical analysis. Please read and study the market carefully before investing on my idea. For any suggestion contact me on my email. Some words mentioned in article don’t mean their actual meaning. They are correlated for market. 

#151 Nifty Update: Traders are up on the toes!!..5710-5734 achieved on Nifty

Reliance industries as well as TCS, two major giants, have announced their results in last 2 sessions and both were in line with the expectation. We might see some profit booking to continue on both the stocks as people are disappointed or rather do not expect companies in future. But as i have been mentioning since my last two posts that Banking sector will out perform the index and we saw that for 3rd consecutive trading session. Mid-Cap and Bank Nifty ended in +ve zone while nifty closed marginally on negative side. As i have mentioned yesterday that some cool-off in inflation and a marginal recovery in the IIP has changed the mood around the tables of brokers. On other side banking sector will announce results pretty soon starting with HDFCBANK in 2 days and its expected by many brokers that pvt. banking is expected to post results above expectations. Talking about utilities sector such as power and energy than they might post poor results but that will be good opportunity to buy for long terms as rate hike is expected by almost all state by this quarter so that will bring some cheers to power companies in next quarter result.

Coming to technicals yesterday i did mention nifty to resist near to 5710-5734 and today we saw profit booking exactly from the intraday high of 5732. BINGO!!!! So what next for short term traders ??? Technicially nifty should take support at 5663 (closing basis) while on intraday basis 5610 may act as a strong bounce back point. So if you have exited in the range of 5710-5734, its tym to enter back at CMP to every dip to 5610…Keep a positional stop loss of 5550 with targets of 5850 upto 6150-6170 

#150 Nifty Update: Nifty traders Could be IPL winners

Yes!! Cricket fever is back on my mind infact for most of fans of cricket. Presently fans are “Divided by teams but united by king-NIFTY”. Nifty in terms of cricket is always fun for me to post. My post title is not just for the sake it does has a meaning. Nifty could outperform in next few months and even do better than any IPL team. Economic data this week has been cheerful for our markets. Retail inflation plunged to 10.36% and WPI at around 5.6% which almost at lowest of 3+yrs. This made hopes of rate cut more stronger amongst all class of traders. On last Saturday i did posted that Banknifty index was a good positional buy on Monday and we saw +400points in 2 days. Still banking stocks seems a good long term buy at current rates. Coming back to economic situation, india was the only underperformer or you may say late to recover compared to its developing peers. We just needed a strong reason to bounce back and i guess we have got one. Technical 5450-5630 was strong range of support which i did mention in my last post on nifty. I am sure risky traders would have been long  at 5500+ while safe traders would have got long above 5630 which is bull zone as i mentioned in earlier post. If you havent got long, dont worry, you havent missed the bus. Talking for specific sectors than concentrate on Cement sector (Acc and Ambuja) and banking sector (Icici,Dena,Axisbank) for next rally. But even bharti Airtel is good but at CMP for risky traders.  Now the short term target comes down to 5710-5734 and long term target at 6500. 5400 should act as a strong support and that should be the stop loss for positional trade.

#3 Article: When on a tip of the Ice-Berg……

                         Just Imagine yourself on the tip of the Ice-Berg!! When you look down you will feel that ice-berg ends at the water-level but the basics says the height inside the water is more than above water. Nifty traders are exactly standing at the tip of the iceberg. Today we saw nifty closing below 200 EMA for second consecutive day which is weakening the bull run. Political surprise + Cyprus banking freeze has made nifty chart take a u-turn. Three Charts above are of three different markets which are inter-related. Top left is USDINR, Top right is GOVT 10 YR BOND Yield and down center is NIFTY Chart. Bond Yield and USDINR are inversely related to Nifty.. But Nifty may lag in reacting to bond yield. Or you may say that bond chart shows the signal early. Now check out the yellow line on bond chart, it made a top at 7.96% on 4th Feb and it has closed at the same level today which is acting as a resistance. But now we see a rise in yield from monday or next week than that the sign that Nifty may seem downfall. Now taking USDINR chart, it has also the same implications. USDINR has been in the symmetrical triangle formation which could breakout on either side but indicators suggest this time it will break 55.40 which has acted as support thrice but before that 54.95 is a small breakout on the way. Now weakening rupee is another indicator adding to the weakness to Nifty chart.

                       Coming to our Nifty chart we have seen two things breaking at the same level. First, a trendline as seen on the chart and Secondly, 200 EMA (Not plotted) at 5672. So technically we have got some weakness in the markets. On my Last article 3..2…1..Go!! i mentioned that 5630-5690 is strong support and we did see 300 points rally from that point but than Political instability came as the shock to the country. All the technical and fundamental analyst were made to think other way round and now it seems gates have opened for 5447. In my article i did mentioned that below the support range of 5630-5692 we may see the level of 5447 and now chart has shown signs that IT MAY move towards that level. To support my view, we even have a unfilled gap at 5447 which could be the support to be filled up.
                      Next week is gonna be important for our markets as Cyprus case would have a final resolution plus financial year ending and top of it holidays in trading session. All the three market moves on next week should be closely watched to predict the future of our market.

Strategy: As i had mentioned in my last article on 25th Feb that 5400-5630 is no trade zone for the long term investors. Yes ofcourse that could be the low but you never know as i said that iceberg could be more dangerous than it seems, so its better we sit quite. 5560 is a small but important hurdle that may act as a key reversal point after 5630 but before 5447. So now add longs only above 5850 or else just hold your position. To hedge you porfolio Buy 5500 PUT Option of MAY expiry at 68. So right now we are in no trade zone. If we see political stability than we may see new high in month of May.



#149 Nifty Update: Get in early. You might miss the bus.

As i have been tweeting at @Chartechnician that we must not short positional unless close is below 5825 and hope you all got that. Yes, I did mention to add long at 5875 in my last post for Nifty few days back. Adding longs at 5875 would been fruitful for those who followed that. 5954-5975 were the next levels which i mentioned to add longs who has missed opportunity at the low but now i would like to revise that buying opportunity at CMP or around 5900. As i studied the chart with more preciseness,5900 has came out to be crucial level and we saw that today markets closed above that level giving some early confirmation for the bull momentum in the near future. Now two revised buy levels are 5900 and 5975 on charts. We also saw ‘bullish engulfing” pattern today on Nifty chart which indicates a buy call.  Yes today HDFC Bank scam had got some fear in the traders but i guess now its all subdued. We saw a recovery of almost 2% from the low today. Recovery was just the support we wanted for the bull run. Inflation and data was announced today and consolidated was higher than expectations but Non-Mfg inflation has decreased and its gud for our economy. Now we may expect rate cut on 19th March from RBI which may add fuel to our Bull fire. So our strategy now is to buy on every dip with stop loss of 5820..

#148 Nifty Update :Nifty reacted to Inflation rather than IIP

Two sets of data were declared today IIP, which was better than estimates and Inflation, which was slightly higher than previous month. Nifty was trading at new high 5952 when IIP was announced but than plunged when combined inflation was announced.  Though its simply profit booking on nifty bt investors can take this as negative reaction of traders to data. RBI policy is to be announced soon and investors are wagy. Now we have seen some bearish pattern formed today..tomorrow we need confirmation for strategy tomorrow is go long above 5925 n short below 5900
.thts STRICTLY intraday. While positional traders add long above 5954. So there is no short opportunity on chart as of now for positional trade…so my range for tomorrow is 5900-5925

#147 Nifty Update: 5975 a strong resistance in nifty for this week

As i had mentioned in my post on 25th Feb that Nifty could take support in the range of 5630-5690 and same thing happened.  Nifty consolidated and made low at 5663 n bounced back strongly as it was expected technically. Now it is headed towards new high but we may see some speed breaks. 5968-5975 is strong resistance zone on the charts. We saw three running gaps supporting the bull momentum. NIFTY has resistance nr 6009 and 6030 above 5975. Now if we see opening below 5946 tomorrow thn we could see correction upto 5874. Strategy wld add long above 5975 or add longs at 5875 if we see weak opening tomorrow.  But DONT go short

#146 Nifty Update: Beaware you can be back stabbed!!!

Hahhaah dnt worry this isnt a warning to your life but yes ofcourse its warning for your trades. Before 3 days I posted that nifty could see 5630-5690 and it would be best buy range. Today we are in that range and I guess you all started buying..while working on the nifty chart late eve, I just noticed 5560 is a strong support..more stronger than if incase nifty closes below 5621, dnt panic or go short as u might get cheated. Nifty has all chance to bounce strongly from 5560..though I am of still of belief that it would turnaround from 5621 but it is just a chance that we could see just BEAWARE!

#2 Article 3…2…1…. Go!!!!

Last time I wrote for “V-Share” was in September issue 2012 with title “ Nifty on a Hat-Trick”  and since then we have seen a good rally on the index as well as the stocks as I expected. Let’s have a quick look at my picks than:
As on 24th August 2012
As on 25th February 2013
Axis Bank
Maruti Suzuki
Bank of Baroda

Reliance Industries
Tata Power

So analyzing my picks above, we could notice that only 3 stocks underperformed the index while rest 9 stocks have out-performed. Just having a quick look we could notice that both the stock which gave negative returns are from capital good sector and Top performing stocks are from retail industries.  Basic cyclic wave theory suggest the same thing which has happened in last 5month’s bull run i.e., Retail sectors lead the rally and capital good sector is the last to rally. So keep a eye on good picks from capital sector though its high risk to enter them at CMP.
 Hell lot of things has happened since September last year at the domestic and global  too but all has factored in positively for the markets. Our new finance minister had just completed one month than but now after completing almost half a year we could see the result on the index. Increase in Gold import duties, rise in fuel price, rise in railway fares, FDI in aviation, FDI in retail, easing bank rates, Improvement in IIP data , Ease of Inflation etc all has been factored positively as people know that it is good for our economy to survive.
3…2…1…GO!!!  Just 3 days to go for budget to be announced and NIFTY like a racing car could speed up its movement post budget. Our current FM had presented Budget 13yrs back and I guess it had brought cheer amongst traders and same could be expected this February. Majority of the traders are of the opinion that post budget we could see downside but I am of the opinion that opposite could happen and we may see some rally post budget. Decontrol of the fuel price was taken as negative sentiments for some investors but if we look behind that we were infact late to do this. This was the biggest deep which made fiscal deficit valley deeper. As per my view was the right time to liberalize diesel prices. Coming to import duty than I am opinion that it isn’t the right way to increase revenue rather government should liberalize or ease export of agri commodities as india’s 80% of populitions main income is from Agri. But of-course people at the center are more experienced than me and would have some better plans in coming months and I expect 28th February to be a start to it.
Coming to NIFTY’s chart we could see that it has been in good wave since the low of 4770. If I am not wrong market is currently in 4th wave of the larger wave 3 of one more degree larger wave 3. Looking at the Indicator MACD , nifty is in the confused state while RSI is suggesting some pullback and bull momentum. This week of the year is always confusing for the analysts. On weekly chart of NIFTY 5820 is the strong support and it made low near to the same level today. This support factor has not breached by nifty since it is trading above the same since late june. So if this week we see close below the same than free fall could be upto 5630-5690 which could be taken as buying opportunity for long term rather going short. Overall we are ought to be in Bull run until nifty closes below 5400. Looking simply at the long term averages, nifty has been taking support exactly at 100EMA since last three sessions and below that we could see support at 5630 where 200 EMA as well as wave formation is taking support.
Stock picks:
I would like to make few changes to my picks .Exit BHEL, SIEMENS, TATAPOWER , IDFC ,WIPRO and Bank of Baroda. I would recommend to add Adani Enterprise, TCS, Dena Bank, Tata Motors, Ranbaxy and Ambuja Cement. I have few reasons for these changes. First of all i have introduced my exposure to cement sector and Pharma Sector. Secondly, have chose 2 stocks out of the index as they might out- perform. Thirdly, I have replaced few profit stocks of index with other safe index stocks to protect our exposure to non index stocks. 
Strategy on nifty:
For those who are already having some long position on NIFTY should average above 5950 or if we see weekly close below 5820 than should wait for the range 5630-5690 to buy more. Positional traders shouldn’t go short at any movement currently as I am not expecting more downside than 5630-5690. Close all longs at 5550 and go short only below 5400.  Next tgt on NIFTY is 6550.
Note: All the data and graph is as of 25th February 2013 closing
Disclaimer: I may have personal position in index and above mentioned stocks. Views and News mentioned above may have Errors and omissions. My views are biased more towards technical analysis. Please read and study the market carefully before investing on my idea. For any suggestion contact me on my email.