Nifty update Feb 6 2014

Nifty made a pause to the current correction and 5900 is likely to hold till this expiry and the broader range can be 5900-6200 in the current series. If we look at the weekly charts of midcap and small cap indices both of them are still making lower tops in the weekly charts and the resistance zones have not been breached. Thus it might take some more time to see the real momentum on the upside. Nifty might have done with  the 5 wave correction on the downside and ready to move in an ABC pattern on the upside. Thus consider this as a bounce back of the recent correction and i expect the rally to continue till 6100-6120 zone. It might be difficult to get into 6200+ zone in the current series.Asian and US markets have undergone through a healthy correction which nifty didn't but most of the stocks did. As long as the auto sector is under performing the weakness can persist and the demand in auto sales numbers could boost markets all over the world. One reason for the pull back can be bank nifty has completed a retracement close to 61.8% retracement of the entire run up and nifty has completed its time wise correction (see the attached chart). It is always better to look for divergences in sector wise indices than depending upon individual indicators. As bank nifty might have done with the downside there can be more upside in nifty too as there is some thing to lead from the front. For more updates visit https://www.facebook.com/Vinuniftytrends

Nifty update for 27-31 Jan 2014

Nifty could never sustain above 6350 nor bank nifty above 11200 levels. It tried breaking above the resistance zones but it could never attract any follow through moves. As i mentioned before the under performance of midcap and small indices remained a worry and the picture became more clear after Fridays fall. Dollar/ INR has given a fresh breakout above 62.50 zone and we could see 64 zone within a short time frame and the actual trade lies over there. In nifty we are again reaching close to the much talked support zone of 6150. It can hover around the support zone for a short time but the gut feel says that it could correct till 5850-5900 in the medium term.As i mentioned in the first post of 2014 it is logical to believe that nifty has formed a short term top and it is time to get out of high beta sectors. Thus wait for the market to settle down or to come in a discount for a short term bottom. It is better t o go with long Dollar strategy as that is the most logical trade at this juncture as all the other stocks and indices are coming down to complete their retracement targets. The most preferred stock at this juncture would be PFC around 120-125 zone if there is a sudden sell off in the markets. The undertone in the market says that dollar is coming up to test the highs or just a rise and nifty is coming off from the highs for a retracement pull back and select the stocks accordingly.

Nifty update 21- Jan-2014

Nifty held 6250 zone and midcap index bounced back sharply after a major break down and this can be a sign of reversal the advance:decline ratio was on the positive side too.Bank nifty plays a key role in defining the strength of the breakout as it has to surpass 11200 mark soon for any meaningful breakout in nifty. If nifty is able to cross the hurdles on the upside go with those banks which have completed the correction phase like YES bank and Axis bank. Options data is showing a bullish view on the market as 6200 and 6300 put strikes have added close to 35 lakh in today's trade. As nifty is able to hold 6200 levels quite strongly put writing is heavy we could see nifty taking some time and heading towards the upward territory. One more important data that has to be watched is the premium in nifty, and the low premium when there is enough time for expiry is quite unusual.Till date we could see around 6 lakhs calls on the short side but today lot of 6200 and 6400 calls got covered and 6300 put got written in huge quantities. Thus lets wait for a 6350+ or 11200+ levels in bank nifty and till then the trend is down.

Nifty update 20-24 Jan 2014

Nifty is still in a negative mode and on its way down to the immediate target zone of 6050. The major development that has happened in the previous week could be the breakdown in small cap and micap indices. These indices are in a pullback mode and we could expect a normal correction towards the 61.8% retracement as in any bull market rally. I am expecting the midcap index to correct towards 7350 zone in the near zone and thus we should shift our focus on the short side from bank nifty to midcap names. Bank nifty and YES bank have almost done with the mentioned targets and we 6400+ would be a little bit difficult for nifty before Jan expiry. Net OI on 6300 and 6400 calls are still on short side and on the put side bulls are still holding the positions in 6100 put. Feb 6200 calls and puts were gaining strength and we could see some range bound sessions in the coming days before nifty dropping to the mentioned target zone. Thus in a rising market if all the broader indices are closing in the red zone it is not a good sign for bulls. I am expecting a bull trap close to 6300 zone and thereby every dip was used as a buying opportunity till now and we could not see a decent retracement correction in the recent period. It is wise to assume a wait and watch approach for any buying opportunity. Bank nifty should cross 11200 zone for any meaning recovery in nifty and it is a little bit difficult for that to happen before expiry.

Nifty update for 03-Jan-2013

Nifty faced stiff resistance close to the mentioned resistance zone of 6350-70 and is expected to trade down till 6050 in the short term.Though has not broken the upward slopping trend line bank nifty has breached a major support zone and marching towards 10700 soon.Most of stocks are not giving any breakdowns as such and thus it is better to go with bank nifty than any other stock on the sell side. Stocks would give better opportunities to re enter at lower levels. Only private banking stocks such as Indus ind bank and YES bank are offering some trades on the downside where as they can touch 390 and 340 levels respectively in the short term. Options data is suggesting some call writing happening at 6300 and 6400 strikes and it clearly says it is difficult to think about 6400+ levels before seeing 6100 level on the downside. I was cautious on nifty from the day India VIX traded below 15 levels and it has been mentioned in the previous post. Thus dont be an options seller and go for long options strategies as the volatility is expected to rise in the coming days. As per the time cycle Jan2-5 are important dates and nifty has probably formed a top in the short term

Nifty update for Dec 23 - 27 2013

Nifty held 6150 zone and as i mentioned in the previous post apart from 6200 put we could not see any build up any strike on the put side. We could see India VIX settling close to 16 zone which was good sign for bullish sentiments in the market and the longs should be cautious once it comes below 15 where the IV's of options become very low and buying options would be benefiting more than selling options. Nifty demands much more time to take out the previous highs and we need to give it some time for buyers to accumulate stocks than jumping in for new highs.ICICI bank and Bank of Baroda can be top picks for this bounce back and see this as a bounce back rather than a major move. As mentioned 20-24 Dec can be crucial date for a major base and the rally might happen in Jan and don't expect it to happen immediately. ITC is another decent pick from the defensive pack. It has corrected well and i would expect the stock to rally to 330-335 levels with a stop below 309. We could see some build up happening in 5900,6000 puts of Jan and 6600 call in the whole month of Dec and the range can be a little more wider and it is good to see that market is not breaking below 6150. It can be a major support zone in the coming days too that can  give a trend deciding move in the medium term.As per options data there can be some stiff resistance points close to 6350-6370 zone and it can be assumed that the long positions build up has happened in Jan futures and 6150 can be the stop for all long positions.

Nifty update for 13-20 Dec 2013

Nifty maintains its weaker position as mentioned in the previous post, small cap and midcap indices have completed a 5 wave upmove in the daily charts and it is expected to give an ABC correction in the days to come. S&P is at a crucial juncture close to the mentioned zone of 1775-1780  which can give a 10-12 % correction from the current levels. Bank of India is one stock that give a correction of 6-8% to 197-200 zone in the near future and bank nifty can drop to 11100-200 zone in the current series. Dec 20-24 can be crucial dates as all news flows would be factored in close to those dates and ideal for a straddle position in at the money options close to those dates.6200 put had seen decent build up in the entire series and we coul see some heavy call writing happening in 6200 and 6300 calls. This data suggests the upside cap of 6350-6380 and the technical picture is also pointing towards 6350 - 60 levels. Thus 6400 can be a little bit distant dream as we might probably break 6200 zone soon. As of now we could not see any major build up apart from 6200 put and the downside picture would be clear regarding the build up in other strikes.Thus midcap and small cap names can give some major corrective moves than banking as they have already corrected from their highs. Wait for buying opportunities only when the market settles down