Nifty update for 1st November 2011

Nifty ended on a slightly negative note after a range bound session. I would still like to maintain a range of 5250-5470 and it would be a buy on dips market. On the higher range i would be a buyer above 5410 levels and on the lower side close to 5250 levels. Volatility was on a rise through out the day and it shows some fresh short positions appeared on highs. It seems to be the short positions created by retail investors as it did not have any impact US dollar vs rupee trading. Stocks have seen plenty of long build up and it suggests buying on dips will continue til 5470 is achieved.Though profit booking is evident in Nifty futures i expect the market to gain some volume and push it on the upside after taking a dip below 5300 levels. Many could possibly join as fresh buyers as they did not get an opportunity to participate in the recent rally. India VIX shows that if it comes down it would be with increase in volatility and option writers should make use of the extra premium available in nifty options. Let the range be 5250-5470 and lets wait for the reactions from the market. I expect nifty to be in a range bound - longer side till the last week of November as some important time cycles are due by that time.

Nifty weekly update - 31st October - 4 November 2011

Finally it broke all the resistance levels and rallied to 5350 + levels . The up move was good , supported by all the major sectors and the turnover data proves that. It is hard to believe that market would find a top soon and it seems to be riding the rally to 5500 + levels. Anyway for the time being as a trader 5470 is the next levels i'm looking at. It is interesting to see whether nifty would take another period of consolidation to move to that level.There would be buyers on every dip in the market till 5250 levels. On the upside i think 5470-5500 level would be a decent level to think for and there is only a little chance for nifty to move above that with out a consolidation period.Ending of rate hike cycle would be good for rate sensitive sectors and some important time pivots are coming around November 21,26. Beyond 5500 nifty looks too much stretched without a consolidation phase . As of now we should respect the consolidation period nifty had for the past two months and there would be several up moves to prove that the consolidation period was good enough for a fresh up move. Even if nifty makes a corrective move to 5200-5100 levels it would give as a higher bottom formation if we join it with the lows of 4700 thus it proves to be a bullish setup at least for the shorter term. We had 5330-5350 levels above 5180 and now extend it to 5470 levels as a reasonable target. Turnover data shows that apart from fresh buying lot of profit booking could be seen in many stocks and lets be a buyer at dips than on the upside. Any corrective move or consolidation phase will make nifty in favor of bulls because they did not get much opportunity to buy as it was a huge gap up opening. New range for nifty would be 5250 - 5470 for the coming week.Let nifty consolidate and takes its own time for a fresh move on the up or downside,but in equity market start buying on dips

Nifty update for 28th October

It was a good expiry in favor of bulls and it crossed an important resistance level at 5180. Though it did not give a closing above 5200 levels it seems like all set for further upmove till 5330 levels. PSU banking space still remains a worry and nifty could sustain the uptrend and above 5200 levels on Nifty it could be extended to 5330 levels. It is difficult for this up move to sustain without banking sector above certain levels. Apart from banking all the stocks were very supportive in today's upmove. Equity market turn over shows that buying emerged at all dips and many mid cap stocks including YES bank (one of the best banks in India with an incredible business model) supported the rally. India VIX has come down by 11% and option buyers have an upper hand than writers as option premiums have become cheaper. As we are close to the cycle anniversary of a bear market on the first week of November it is very important to move ahead of 5200 to prove that the long term bear market is close to bottoming out at least in the short term. A closing above 5200 can drive Nifty to 5330 and if it happens the new range would be 5080 - 5350 . Happy Diwali!!!

Nifty update for 25th October 2011

Atleast for an hour nifty was so tempted to touch 5160+levels but it could not and finally banking sector did the damage. Options data show you volatility has cooled off and it shows that traders are still holding on to their previous shorts and not many fresh positions are there in the system. Lot of shares showed good buying interest especially banking stocks in the initial part of trading. Still 5180 is considered to be a fearful level to worry and the longer the consolidation takes place the more biased would be on the long side. The upmove above these levels would trigger a short covering rally and fresh buying as Nifty and bank nifty are moving in the same direction. Indices are waiting for european events and credit policy and if it encourages the market it could see more upside . On the downside let 5030 be the range. Till this range of 5030-5180 breaks only option writers would be able to benefit. As the turnover data shows people are least interested in the market as they could not take a position on the long side as they are met with huge amount of selling from 5160 levels.

Nifty update for 24th October

Nifty tried to cross 5150 levels once again but it failed and ended at 5060 levels. It looks like a directionless market and equity market turnover reveals you that though there were lot of short positions got added on Thursday and Friday retailers who were the major participants in the rally from 4700 - 5150 are not ready to exit their buying positions and it is very evident that it is from an investment point of view. Volumes in nifty futures were good and supported by increase in open interest and increase in volatility along with decrease in cost of carry. The current data shows that this negative bias is not because of profit booking and on every rise fresh shorts are coming up. It held 5030-5040 once more and it would be interesting to watch how long would it hold this range and it shows the range bound market is preparing for something big and it is getting prepared for that. As the old saying in the street tells you 'never short a dull market' and let it break the range of 5030 and if it does that i expect a smaller correction to 4950-4900. There would be some positive surprise in the market as the U S markets held high but there should be some local buy triggers and good cash market volume for nifty to go beyond 5180-5200 levels.One major hope on the upside would be dollar index breaking to lows and it would be a positive sign for the market.

Nifty update for 21st October 2011

It was again a buy on dips market but it was not like the same when you got support at 5000 levels !!!When nifty covered its short positions dollar made a high close to 48.90 and India VIX rose by 6%I would not be a buyer at the next dip towards 5030 levels and i would be a seller below those levels. Banking stocks are rallying just before their earnings report and i seriously doubt whether Nifty has the strength to cross 5180 levels. As a buyer i wont be a buyer at the dips for the third time, else i would wait for 5180-5200 to be taken out on the upside and be on the long side.Time cycle wise it formed a crucial level at 5030 and as long as it holds it is well and good and below that i expect a deeper cut towards 4900 levels. Institutional participants remained as net sellers and lets wait for the upside hurdle to be taken out for a change in the trend on the upside. It was almost sure that some of the shorts got covered and after noon rally was due to good movement in the banking shares. VIX data shows still there are shorts in the system and it would possibly get covered only above 5180 levels and 5030-5000 levels are important levels to watch out for on the downside.

Nifty update for 20th October 2011

It was a smart rally from yesterday's lows. It held 5120 levels for sometime and finally the shorts of those levels were also got covered and gave an intraday buy till 5150. Still 5180-5200 remains a hurdle and if nifty gives a closing above these levels then only it could be a trend changing move on the upside at least in the medium term. All the major large cap stocks participated in the rally , India VIX came down by 7%, volumes in nifty futures were good enough and all these things are good signs for traders who are bullish. As i said in my earlier posts i would be still be a buyer on dips and on the upside only above 5180 - 5200 levels. Till today's closing all is well for Nifty on the upside and the only hurdle left is the price resistance at 5180-5200 levels. Option traders could concentrate more on buying options now as the volatility has come down drastically and option prices would be cheaper.Institutional data in the cash market is still surprising as both FII's and DII's are remaining as net sellers. We are getting closer to the end of one bear market cycle on the first week of November and that would be one important week to watch out for the shorter term 2Oth October would be an important day as a trend deciding day (after 12th of October 20th Oct would decide an important change in the short term trend)

Nifty update for 19th October 2011

As we saw Nifty had a sharp fall but held our range of 5000 on the downside.It was a huge gap down opening and nifty would face pressure on the upside till 5120 ..and as of now it would act as a cap on the upside range.During the final trading hours lots of shorts got covered and some large caps saw buying interest. If it is a huge rally like this from 4700- 5160 it is common that those who could not participate in the previous rally would join the market on any dip as a buyer. On the downside key levels to watch are 4950-70 range as that is the range from we saw buying interest in the market and we need to see if people are ready to add more positions on the long side at 4970 or leave the market at these levels.Trading volume were much lower and we need to wait for calling it as a market to go for single side trading positions.It seems to be a direction less market because of lack of buy or sell triggers and option writers still have the edge till a range break out happens.Option traders could maintain a broader range of 5000-5125 ...Only factor that confirms a trend on the downside is rising of dollar against rupee and the volumes in nifty tell you the story that shorts got covered around 5020 levels and short positions can get created at two points , below 5000 and at 5120 levels.Even if we can see some kind of short covering one cannot expect that range of 5120 to be taken out that easily and go for a trade on the long side . In a nut shell lets wait the range break out now at 5000 - 5120 levels.

Nifty update for 18th October 2011

Nifty gave a range bound session and now lets see whether it could hold 5050 levels and move upwards.If we join the top of 5760 and low of 4720 current nifty levels of 5130 - 5140 intersect with a Fibonacci number and that tells you that it would retrace from those levels and that's what we saw today. Nifty just added one more resistance level above 5150 and made it clear that it is in a consolidation phase. I wont jump and go short or long on nifty at this point. As i said in my previous posts an option writer who is delta neutral would be the only guy who is getting some profit from this tight range and wait VIX to come down to 22-23 levels and as i a buyer i am looking at those levels to get the options at a cheaper level. 5050 and 5180 are the key levels to watch for and volume data suggests that a good amount of profit is being booked at these levels. As a trader if I'm a long on nifty from lower levels and if i feel that nifty is facing resistance at 5150 levels and it gives you the time to exit so why shouldn't i square off my long positions and wait for a new trend. Breaking of 5080 would tell you that nifty has formed a top and breaking to 5000 levels and if it has to happen to happen tomorrow is the date for that.

Nifty weekly prediction - 17th - 21st October

Nifty gave a smart rally in the previous week and it has some tougher levels to cross around 5200 and thus it could confirm the bottom of 4700.If it has to cross 5200 levels it has to happen on 17th or 18th or it is due to correct to 5000 levels and find a bottom around 20th of October.The move on the upside could be relevant if it corrects to 5000 levels and come again to break 5200 levels. As i was saying through out the last week as i trader i would have squared off my longs above 5100 levels and wait for further buying till 5000 levels or above 5180 levels.It would be strictly a no trade zone from 5100 + to 5180 levels . How ever when ever there is a dip to 5000 levels people who are waiting on the side line would jump in to create further buying positions.Volatility index has cooled off and if it comes to 22-23 levels it would be a time for buying options as option prices would become cheaper and India VIX has to come to its mean around 30 levels.If you read the volume data it looks like over extending the upside to make a trap. Lot of profit booking could be seen at higher levels of 5120-5140 especially in Nifty futures and institutional buyers have exited the futures market and they might come only above 5200 levels.
If nifty would is able to cross 5200 levels convincingly by giving a closing above these levels it could extend the rally to 5350 levels. If it rallies to 5350 without a correction price would exceed the time factor and i expect it to come back to test 4700 levels to make a balance between price and time.

Nifty update for 14 October 2011

Nifty retained yesterdays top and closed at day's low. It was just a profit booking session and i dont see many institutional shorts but it is becoming very evident that crossing 5200 would be a hurdle and nifty has again proved that. Retail shorts might be there above 5100 levels and volatility index is not showing massive number of shorts at the top. It suggests you that any top above 5100 would be a level to square off the existing long positions and wait for another trigger to carry with fresh longs.It indicates a buy on dips upto 4970-5000 levels where the fresh buying has emerged and i would wait till that levels to be taken out on the downside. It would be a buy on dips market till these levels hold and on the upside it looks like capped at certain levels above 5100 ...If nifty gets some time for accumulation at 5000 levels it would be a good trigger for a fresh and relevant upmove other wise it would be a range bound market ahead but you could see stock specific actions especially in large caps. Nifty doesn't look weak on charts , though it can slip further to 5000 levels i would not neglect the possibility for Nifty to come back wit good volume till 4970 is taken out.

Nifty update for 13th October 2011

It was a good rally above 5050 levels, short covering and heavy buying in large caps helped nifty to touch 5100+ levels. 12th of October would be a crucial day as it could be a day for the top. Nifty looks strong and last 2 hours of trading shows the amount of volume in the cash market. I would wait for 5200 to be taken out and i wouldn't like to play that 50-60 points up move from here.Nifty doesn't look weak in the charts and it has the capability to touch 5180-5200 levels , but i would like to respect the resistance at 5200 and wait till that level to be taken out. As indicated in my weekly post Nifty had completed 90 days from it from its major top in the last week of October and there we had a trend reversal and it could extend upto 5180-5200 levels. I suspect any buying triggers above 5200 and expect the cycle of 4700 upmove to be over by 5180-5200. Nifty just went crazy and the beaten down stocks had a major rally like l& t and SBI (see the post of 11th OCTOBER) , but the turnover data suggests that institutional participation is still lower and retailers have become very active in the equity segment. Cooling of VIX and dollar making its top are very good signals for a bullish trend and the only thing that is still fishy is the lack of institutional participation.One fact is very clear that ever dip would be used as a buying opportunity and 4900 would be the base for the market if it takes out 5200 and it would trigger a rally to 5350 levels where the next trend line resistance could be found. As a nifty trader who is on the buying side i would just write deep out of the money calls near 5180 and add my next buying position only above 5200 levels

Nifty update for 12 th October 2011

It was a profit booking day for the market and held our range of 5050 on the upside and it is surprising to see that FII buying was only around 600 cr during this 300 points rally.I would still stay with 4900 levels on the downside and dip to that level should be used as a buying opportunity.I had mentioned about two stocks in my yesterdays post , SBI and L & t ..both gave decent returns for an intraday trader as it gave 40-50 points profit(combined). Lot of shorts were getting created above 5030 levels and any move above 5050 triggers a short covering rally and further buying would push Nifty towards 5170 levels .Yesterday buying emerged from 4930 and 4970 levels and these levels would act as major support zones on the downside. Options writers could still maintain 4870-5050 range and far month options are offering you attractive premiums just because of the volatility factor. It is better to utilize those premiums to get better returns than trading Nifty futures. Watch 12 th October as a crucial day and it could be a major turning point for the market.

Nifty update for 11 th October 2011

Nifty once again gave a sharp pullback rally from 4890 levels and that reveals the strength left in the market. Reliance leading from the front helped Nifty futures to touch an important level of 5000. Lets wait an watch whether 5030-5050 zone to be taken out or not As we could see the divergence in the volume and price which the best thing to look for a change in the trend gave a positive one and any dip till 4870 would be met with lot of buying support. Dollar gave a sharp movement towards 49 levels and it gives some relief for the bulls and VIX reduced by about 10%. As i mentioned in my previous posts options writers who wrote deep out of the money options would have benefited in today's trade as the volatility came down and they could comfortably exit their options with good amount of profit. The slow movers in this market like SBI and l& t can trigger an up move above 1780 and 1410 levels respectively. 5030-5050 - 4900 range is one important range to watch for in the coming days. 12 th October would be one important date to look for as it could form a top around that date . If we look at the larger picture 5th of November would complete one year cycle of bear market and thus the coming days in the month of October could be important dates to watch out.

Nifty weekly prediction 10th - 14 October 2011

Nifty witnessed a sharp rally towards 4940 levels. As we saw in Fridays move further up move above 4950 was resisted by short positions above 4900 levels,decrease in cost of carry with good amount of open interest volume reveals that fact. As it was a huge gap up opening on friday not many people would have got the opportunity to participate in that rally.We saw volatility is kind of getting at 32 levels and it indicates buying on dips and every dip till 4750-4800 range would be utilized for buying. My upper range till 12th of October would be 5030-5050 as i expect a top around that date. For options writers who is looking for a range, that would be 4800 - 5050. As posted on thursday read the divergence that is happening in Dollar and accumulation when nifty goes down and don't neglect these kind of rally's with good participation from institutional buyers.Bank nifty formed a new low on thursday and it would come back to retest the lows in the coming weeks.Though we cant say that the problems of U S and Europe are over as per time cycle nifty is completing one year cycle of bear market from the high of 6300 in the first week of November. People who are going short should be watchful as we might be close to the bottom within 10-20 days

Nifty update for 10th October 2011

Nifty closed just above our upper range of 4880 and gave a decent bounce back from an oversold territory of 4720-50 levels. If we read today's move unlike the other bounce backs this one is quite relevant for a fresh up move because of several reasons.
1. Nifty took multiple supports at 4700 level and any move above 5030 confirms 4700 as a base.
2. The move was triggered by fresh buying than short covering rally and equity market volume reveals that fact.
3. Nifty just added more number of buyers when ever it touched 4700 zone and it accumulated buyers thrice within two weeks and all the bigger funds have already withdrawn huge amount of cash and the they could trigger fresh buying in many stocks.
If we look from the top of 5170 to 4720 ...nifty could touch an important Fibonacci number at 5000-5030 levels.Nifty traders should closely watch any dips to 4800 and the volume of nifty futures. It looks like any dip to 4800 would act as a buying point though a lot of fresh short positions have initiated at 4940 levels . Thus buying on dips and short covering above 4950 levels could lead Nifty to 5030 levels. One more closing above 4950 would take Nifty to a range of 4800 - 5170 range expect a top around 12 th of October.
(followed by weekly prediction for the coming week )

Nifty update for 7th October 2011

Nifty gave a decent bounce to 4840 levels from the low of 4720 and i would still hold the range of 4600 - 4880 on the upside and till 10th of October.I'm not seeing a major break out either side till that date. Dollar index is not at all at a comfortable level above 79 and it is a major threat for Nifty . The good news here in India is India VIX cooling off at 36 levels and Dollar is kind of topping out at 49.50 levels. Dollar is getting ready for a good and sharp move and that would be the first notable divergence.It would be interesting to see the movement of dollar upwards / downwards..let it be anyway , it would be a sharp move for sure.As we are close to 90 days from the previous major top of 5760 this week would be crucial for a change in the short term trend. It is better for bears till 4720 - 4700 to be taken out for another round of action. Option traders could concentrate on writing December options as lot of extra premium is available in deep out of the money options too.

Important dates a Nifty trader - Time cycle

Important dates that a Nifty trader should look for

December - 21
February 5
May 5
June 21
August 5
September 21
November 8
Consider + / - (4- 5) days from any of these important dates. These dates could be considered as dates for important turn around in Nifty . Cycle anniversary of any major high or low should also be considered as important for a deciding move.
Dates from 5 - 10 October are crucial as it could decide a major level for the market.

Nifty update for 5th October 2011

As our previous weekly update showed it was a continuous fall in the index and it retested 4720-4750 zone on 4th of October.It would be interesting to see whether Nifty could hold these levels. If we observe carefully we could see that there are multiple support zones lying at 4600-4700 levels and the weekly charts from 2008-2009 lows will show you that 4300-4400 would be an important Fibonacci number.All these levels would suggest you below 4700 there would be one more round of short selling could be seen and that could be the selling climax. As of now it has retested the previous low of 4720 zone and bounced back, but at a major bottom nifty should be selling at a discount of at least 20-30 points and that should be the selling climax.The more late it come below 4700 the more deeper would be the cut on the downside. 4880-4650 could be range to watch out for
(See the weekly prediction from 3-7 October before reading any daily posts).

Nifty updates for 4 - October - 2011

Nifty ended on a negative note though it attempted a pull back from our support levels of 4820.Interestingly Dollar once again rose to 49.50 + levels and it is moving close to its two years high of 49.80-49.90 levels . Dollar index is also threatening to enter 79+ zone which is a dangerous sign for a bullish market in India. It is better for Nifty to test its 52 week low of 4720-4750 zone and thus let it confirm the bottom and then one can comfortably enter the buying zone . As far as equity investors are concerned i would be a buyer at any level below 4700. One should start building their portfolio now it self and in case if Nifty falls to 4300 levels one's portfolio should get completed at that level. Nifty could remain in a range of 4600 - 5130 till 10th of October . Thus i am not expecting a major break out till that date . If nifty has to touch 4720-50 levels it should happen on 4-5 th of October and any bounce from those levels could be extended
up to 4930 - 50 levels.
Any pull back from current levels also could also extend upto 4930 levels from where we witnessed short positions on Friday. Any up move can be expected only after those shorts getting covered above 4950 levels. Till then i would better believe Nifty to retest its low's