Nifty update for 30 - 03 - 2012

Nifty did break yesterdays low but closed above the much talked about 200 day moving average. We could see sudden liquidation of March contracts but cost of carry and open interest figures shows some long build up in April series. The short term trend still remains down with the immediate down side levels lying around 5100-5070.As i said what ever be the downside it is better to wait for a buying opportunity than going short in this market. Among the front line stocks TATA steel is the one which looks attractive if the market is all set to rally towards 5250 zone. It never broke out from 440 levels and got some good time for accumulation as the short covering has already happened in the particular stock. If the market moves on the upside this could give a good move on the upside. On the weaker side we could see SBI and ICICI bank still waiting for a proper accumulation pattern. Volatility index shows a wider range of accumulation happening in nifty futures from 5100-5200 but the institutional figures was really disappointing, thus any rally on the upside could be a short covering rally led by banking stocks like Canara bank , HDFC etc. On the upside the immediate cap would be around 5250 levels where lot of short positions are built up.Dollar has almost reached the levels predicted in the first week of march(refer the post of 7th March).If we see the market cycle though nifty is very much inside the same range as that of 2010 bull run we could see the tops and bottoms coming exactly in the same time period. 2011 Jan marked a high , but we got a low in Jan 2012  . 2011 Feb and march got 2 immediate lows and we got 2 immediate highs in feb and march 2012 . Thus as per the same cycle we got a top in the first week of April 2011 and we are due for a rally in the first week of April. If nifty holds todays low i think it is worth taking a long call for an immediate rally. Lets wait for the market to unfold whether it is 5100 or 5250.

Nifty update for 29 - 03 - 2012

Except 5 - 10 minutes in the final hours of trading nifty held our lower range of 5180-5190 zone. It tried 5250 but failed to cross and slipped back to 5200 zone and it clearly shows the weakness or some more time for accumulation. Nifty futures made a new low and thus indicates that we don't need to buy if there is one more fall but keep waiting for an accumulation pattern. I did discuss about the weakness in bank nifty and stocks like SBI and ICICI bank in yesterday's post. As they are yet to make an accumulation pattern we should wait for an up move in bank nifty to give the leading signal. If we go by the logic and market cycles we could see some lower turn over days and the institutional traders have not started liquidating their positions. Retailers were left out of the previous rally and they are the only buyers at this point of time.As we could see some buying happening at 5180-5200 levels if nifty breaks below this zone the liquidation will also happen at a faster rate. Thus i would not like to short the market below today's low for a target of 5100 , but would wait for a decent buying opportunity at lower levels. Though we fell from the highs we could see some intra day up moves in TATA steel and L&T  but the negative open interest data shows that these were short covering and not long accumulation. In the commodities market we could see some profit booking for copper and nickel is still making new lows. Thus the base metals should be back in its buying mode for a strong up move in the equity market too. Before nifty makes any move bank nifty and metal index should lead the way ,let it be up or down. Thus wait for some more lower levels in nifty below today's low and it can be close to 5070-5100. On the upside we could see 5200 call got written around 40-45 points and the call writers would definitely fight for these levels and thus 5200+50 = 5250 would be the upside cap for nifty from a short term perspective. Lets keep a range of 5150 - 5250 and consider the break of 5150 on nifty futures as a break down. Watch for any upmove beyond 5250 to make it a sustainable one.

Nifty update for 28-03-2012

Nifty futures stayed within the mentioned range of 5180 and it just kissed the upper levels of 5290 too. The range got filled up quite clearly and once again nifty proved that it does not want to go down that easily. It is evident that lot of traders are accumulating long positions close to 5200 levels but the upper levels are getting tough to break. The situation reveals a typical range bound market in the picture with a positive bias as long as 5180 - 5190 levels is held by nifty futures.Volatility index gave a negative close with an increase in cost of carry and a positive open interest data. It shows a clear accumulation at lower levels and the equity market turnover data makes it more clear. Retailers who missed the previous rally are making good use of the current levels and buying some quality stocks like HUL and HDFC. Bank nifty is a major concern for nifty as it is consistently making new lows and ICICI bank and SBI are yet to recover from their bottoms. Among the major banking stocks Axis bank looks good and if nifty futures takes out 5300 levels this would be a major contributor in that up move. Thus bank nifty might need some more time to consolidate as the accumulation process is not yet started in banking stocks and selected metal stocks like tata steel and Jindal steel. The major contributors of nifty are far behind and the index alone is leading any up move and 1-10 of April would be ideal for a decent rally. If we look at the structure of nifty it is forming the same cyclical pattern before the final up move in 2010. In the year 2010 it spent quite a lot of time on 5200-5500 range and then broke out after 3-4 months. Thus as long as nifty keeping itself in a good range it is time to pump in some money. Lets keep the range of 5180 - 5330. On any up move 5300 levels could provide some good challenge for nifty. Thus if you are in a range bound market pick the bottom just like we got it at 5180 levels today and exit at the upper bands of 5330 - 5360 and make new positions in the new expiry season.Dollar/ Inr came down from the day's high and could be a little relief for the long positions in nifty, but we are not yet clear whether nifty needs more time for accumulation or see one more break down. Anyway keep in mind about the upside cap of 5330-5360 for any long positions. The volatility index has risen to 27 levels yesterday and any down ward move could get it to 30 - 31 levels. Just remember we have seen these kind of volatility at 4600-4700 and now we are seeing it at 5200-5300 levels and all the major market rallies happen when the volatility index is at its peak. Options writers , get ready to sell off the additional premium you are getting in near month options

Nifty update for 27 March 2012

Nifty could not hold the support levels of 5200 levels and broke below that , but if you analyse the fall mathematically 5180-5185 would be an important level for nifty futures and there is a possibility of a minor pull back rally from these levels. Though it can give a minor rally it would most probably be sold into and it could face enough resistance at 5330-5360 zone. If it remains in the same range it could be good for nifty as there would be a good accumulation pattern. We were focusing on the rally of base metals for some time and a rally in copper was mentioned a week before(read 19-23rd March weekly post). The major hypothesis for nifty being in a range is majorly due to this rally. As long as copper continues its  upward trend it can help nifty in a very positive way. Though crude can be a negative factor it can cool off after one more rally. In a nutshell nifty should play a longer range bound market to see new highs. Though nifty fell about 100 points from the high the selling i could not see any long unwinding happening in the market and volatility data shows heavy short positions on the top. The up move in volatility index would make nifty an option writers paradise. The negative news flows in the domestic front is affecting nifty in a bad way and as an investment option i would like to start accumulating Reliance Industries at the current levels of 720-730. Make it as partial investments and complete the investments in 630-730 region. The structure still remains weak and 5070-5100 is quite possible but as i said earlier it is not a market to go short from these levels and investors should look for good buying opportunities like Reliance.
We have time cycle dates coming around 1-10 of April and thus be cautious on short positions at lower levels. Lets keep a range of 5150 - 5290 .

Nifty update for 26-30 March 2012

Nifty futures did not break the immediate support zone of 5200 and bounced back from lower levels. Though it was a meaningful bounce back one could see the first sell on a rise to 5330 zone. We need to get a clarification of the up move by nifty futures sustaining above 5330-5360 zone because that is where we could see lot of short positions lying. Thus no need to catch the bottom if it comes down once again because a fall to 5200 zone once again will damage the structure in a different way. On any up move metal index should have an upper hand than bank nifty and we could not see that activity on friday. Metal index closed on a negative note and nifty cannot move up without it. Bank nifty too is holding the support zones and now we need some time for the accumulation process for any up move. As per the time cycle nifty could remain in a range till the end of march and a rally can be expected from April 1-10. On the upside it is still trading below some important moving averages and 5350-5360 levels on nifty futures would be an important zone to watch out for. If Dow is ready for a secondary rally before any down move we could see some good moves in nifty too.In the metal space though copper is still trading with a positive bias a new low in nickel and up move in crude oil is really a matter of concern for bulls. I would like to go long only if nifty could surpass 5330-5360 zone on the upside. On the downside i would like to wait for a deeper cut to start some fresh investments, thus wait for the cuts for fresh buying and no need for any aggressive short positions , may be you need to wait for a little more but the risk - reward ratio would be in favor of an investor in the longer time frame.

Nifty update for 23rd March 2012

It was a heavy fall from 5400 levels and as I said in yesterday’s post it was a clear exit signal from long positions. Volatility index shot up more than 15% indicating panic selling in Nifty. As it has broken down we should wait for lower levels to initiate buying from a long term investment view. The negative news flow and a correction in European markets led the fall. Nifty and bank nifty are close to important support levels. SBI, Axis bank and ICICI bank are at important support levels and a break below the current levels should see some more pain. In the commodities market one could see a pause in the rally of nickel and copper and it creates a real worry for metal stocks(mentioned in yesterday's post). Investors should get ready to pump in some money from lower levels as it should be considered as a time to accumulate stocks for a longer time horizon. Volatility index suggests huge short build up and nifty ended at a discount. Thus one could see selling on any rise and it might take some time for an accumulation pattern. Investors should wait for a good accumulation pattern and till then trade the mentioned stocks on breaking the support zones. A rising dollar is also a concern and it is close to our upside target of 52 zone. Though it could reach 52 zones it still makes a lower bottom compared to 54 levels. The first reversal for the upside rally should come copper and nickel in the commodities market. Wait for a reversal and till then the short term trend remains down. If nifty breaks the support zones it could see levels of 5070-5100 levels.Watch Jindal steel and ICICI bank for any leading indication in nifty for upward or downward momentum.

Nifty update for 22nd March 2012

Nifty did it again by holding the support zones close to 5250. One could see the mentioned stocks BATA India and YES bank trading higher through out the day. In the end of February itself a rally on the 21^st of March 2012 was mentioned(read posts of 9th March and 27 feb weekly posts). I would like to take it as an exit point from any long positions and play the rally from an intra day basis. As the bottom is formed by spending some time on the downside there can be a little more upside but any upside from the current levels should be used for exiting the long positions.I would like to start my fresh short term investments only above 5550 levels. Nifty futures could be in a trading range till the first week of April and if there is any more major rally on the upside that could be during April 1-10. It has created a good trading range of 5200-5500 and one could catch the top or bottom to trade this range. If you are not an options player as long as this range continues one could focus on specific stocks and let nifty give a meaningful break out on the upside. It could revisit the levels of 5200 for confirming the base but as I have already stated waiting for good buying opportunities than going short. Volatility index was suggesting us lots of buying is happening on the dip as it has not closed in the positive zone for quite a few days and the premium in nifty did rise to more than 20. (If you were reading the blog regularly one could see all these relevant details were covered in the past few days.)In the commodities market copper might take a pause before further rally and Indian equity market has to really worry about the upswing in crude. Volume in nifty was quite decent but surprisingly dollar too gave a positive closing indicating it as a mere short covering rally in stock futures. Nifty futures came up due to strong buying and not because of short covering because traders did not square off the short positions as these are lying at much higher levels close to 5470-5500.Thus lets keep a range of 5330-5440

Nifty update for 21-March-2012

Nifty futures did test 5250 zone once again but gave a quick bounce back from the support zone. The volatility index gave a negative closing and the premium in nifty has increased considerably. We could see some buying happening close to the support zones and bank nifty too supported today’s move. Though world markets are in a corrective mode we need to see some buying support happening on the downside. The major worry for the equity market would be crude heading to higher levels. It would have a negative impact on the Indian equity market if crude enters a new buying territory. Base metals are still getting support at lower levels and that is really helping for nifty to hold on to the lower levels. Bank nifty would be an important index to watch out for any rally in nifty and most of the stocks might be in a process of building their short term support zones. We could not see much volume trading happening in nifty and traders are waiting on sidelines for a better trade either on the upside or downside. If nifty breaks below today’s low instead of going short I would like to wait for a buying level. One needs watch out for outperforming stocks like YES bank and BATA India on any upside rally. A negative move in the world market can have an impact on nifty’s move but the liquidity has not dried up as we could not see much volume on sell side. In a nut shell wait for a base formation pattern and nifty could remain in a broader range till the first week of April. We have some important time cycle dates close to 20-22 March 2012 where nifty could give a trend deciding move.

Nifty update for 20 - March - 2012

Nifty continued its downward move but the momentum was less compared to the negative close on Friday. Bank nifty did the damage and once again SBI lead the fall. It would be a testing time for nifty and it would be interesting to watch whether nifty could hold on to 5200 levels. Equity market volume is telling buying is happening on dips but only in some selected stocks. Anyway the selling pressure in nifty was without much volume and it is showing that we are close to an interim bottom. It can be 5200 or 5100 and options data would tell you that. One should closely watch the volatility index and 5200 and 5100 put options of March series. A good amount of 5100 and 5200 put options got written till now and it would be a wait and watch game to see whether traders continue to hold these positions or square off. The strength showing by base metals in the commodities market would be a great help for metal stocks to out perform and we could see that in today’s move. Lot many banking majors like Union bank, Canara bank, Kotak bank and Hdfc bank are under heavy selling pressure and I would not like to take long positions on these counters. Nifty is not showing any reversal pattern with an upside momentum and we should wait patiently for an up tick and go for a trade on the long side. One could see that the first rally on the upside would be sold into and nifty is trying to build a base before the next up move. Let’s keep a range of 5180- 5370.

Nifty weekly update 19-23 March 2012

We had an eventful week and the street gave a thumbs down to the budget.Nifty futures did hit our downside target of 5330 and closed just above that. It is obviously a weak closing if we consider the daily charts but if we see the weekly chart the structure still looks strong on the upside.As i said in the previous posts it could most probably make a trading range within 5180-5500.We have some important dates coming around 20-22nd of March and the first week of April.If we observe the market cycle of the past years we could see a range bound market till the first week of April and a rally is possible after this short period of range bound session.We could see heavy options writing in the past week and the volatility index came down by 10% on Friday. It is an indication that buying happen at the lower end of the range.Volumes were good and the turnover data shows some heavy selling is happening on the upside. Thus i would not expect a short covering rally because the shorts are placed at 5470-5530 range.Any upside should be treated as buying emerging at lower levels and not short covering. Banking stocks are looking much weaker than any other sector especially the banking biggie SBI. It had a disappointing session on Friday and clearly says it is lagging the corresponding index.In the commodities market copper registered a new high above 435 and it should be considered as very good sign for further upmove. We should closely watch the base metals and dollar index for any major reversal in Nifty. I would be waiting to be a buy a deeper cut on the downside and we could keep 5180 - 5470 as the major range for the week.

Nifty update for 16 March 2012

Nifty could not breach the resistance levels on the upside and trading below some important support zones. Bank nifty did the damage but we need more confirmation for a downside. We had some important support zone around 5440 but nifty could not stay within the support zone broke that zone without much difficulty. The next level on the downside that has to be watched would be 5330-5320 levels where lot of buying has happened during the past week. On the upside we should go for a buy only if nifty futures crosses 5540-5550 levels on the upside and till then we should wait for more confirmation for an accumulation pattern and till then we should wait for a support level to be formed.Dollar is still trading strong with an upside momentum which says that upside target of 52 is not far. If we see the volatility and turnover data it is evident that some short positions are being built up on the upside but we need to see whether it would get covered on the upside or would add more below today's low. Nifty futures held our lower range of 5390 on the downside but ahead of the major event one should not get trapped by buying the highs. In the commodities market copper is at a major trend deciding level around 432 -434 levels. It would be a bullish sign for copper for on the upside if it crosses the mentioned levels but as of now it is a wait and watch signal. In a nut shell Nifty can only be bought at a support level at lower levels or above the previous high of 5540. I would not be surprised if we could see 5330 and 5200 below today's low but just consider as bull market correction and it would be good to build up a healthy market with an upside momentum. Thus as of now i'm staying away from the long side and keep a range of 5390 - 5510 and consider the break of 5390 as trade on the short side from an intra day perspective as one could expect huge swings in the market.

Nifty update for 15 March 2012

It was a decent gap up opening and filled our upper range close to 5550. Thus as I mentioned in yesterday’s post it would be an exit signal at higher levels. It is evident that Indian markets are waiting for big events that would be happening by the end of this week and the story is yet to get unfolded. The time cycle chart says on every upmove nifty is hitting a top and thus I would not like to be a buyer even if nifty breaks today’s high. On the contrary if it takes a dip to 5400 levels we can think about building up buying positions targeting 5600 levels. In a nutshell if nifty starts moving up we might lose an opportunity to go long but it would be a safer bet to go long on dips. Long positions are still active in nifty and every dip has been bought by traders. Banking stocks are back in a party mood ahead of RBI policy. Buyers have been emerged from 5430-5450 zones and this would be a crucial support zone as lots of buying positions are lying there. Below this we have a support zone only close to 5330-5350 levels. Thus if these positions are getting liquidated nifty would give some wild swings between the support zones and I would wait for a better opportunity to get in as a buyer. On the upside there is no significant resistance till 5600-5625 but as it has already touched 5540 today I would not be a buyer from today’s high but only on a dip. In the commodities market base metals like nickel and copper are continuing their upward journey but copper might take a pause on the upside cap of 432-435 level. Thus it is ideal to wait for a better momentum in base metals for a better buying level. Dollar index is getting ready for a move on the upside and that would be a real threat for nifty on the upside. Bank nifty has not shown any signs of reversal for the downside and still trading strong with an upside momentum and that would be a key index for nifty traders to watch out for. One could see banking stocks are really expecting something very big from the RBI event and trading with huge volume and open interest. A long straddle position would be ideal for major banking stocks like SBI and ICICI bank from two days perspective. Volatility and turnover data shows long unwinding at higher levels and buying only on dips. Thus there would be a good possibility of creating a trading range before the budget.Let’s keep a range of 5390-5550 .

Nifty update for 14 March 2012

Nifty finally broke out of 5440 zone and ended at the day’s high. Though the break out was not big enough for a great journey one could at least take an intra day trade at these levels. One of the leading indicators of Nifty, ie; Jindal steel gave a 5% upmove in today’s trade and as of now it looks like the momentum is on the upside as we have already broken from 5440. In the coming days we need to see whether nifty could hold the support levels and move higher up to 5550-5560. As some bigger events are waiting on the side line I would like to take a long call on 5300 put and 5600 call with a total investment of 100 points (combined) so that I could take a positional view on nifty than going for a gamble. On the stocks front we have metal stocks on the buyer’s radar, but surprisingly bank nifty took a pause and that made the break out less effective. Thus in the coming days apart from the options trade take the trades only on intraday basis and cut the trades quickly. As I told earlier even if nifty goes up it would be an exit signal for me as the top is getting confirmed on the 20-21^st of March 2012. In a nut shell if u have long positions hold it as long as the support levels holds and take an exit above 5500 levels (futures) and we could think about other trades as the events unfold. In the commodities market as already mentioned copper and nickel are trading with an upside momentum with good support zones. One possibility for Nifty could rally on the upside is crude is taking a pause in its upside momentum and cooling off at higher levels. Volatility data shows a clear accumulation pattern on every dip as the volatility index closed on a negative note with an increase in cost of carry. Let’s keep a range of 5390-5550 and consider the upper end of the channel as an exit signal

Nifty update for 13 – March – 2012

It was a range bound session and upper levels got capped near the resistance zone of 5440. Nifty futures tried to break 5440 in the opening trade but could not sustain at higher levels. Though Nifty could not make a new intra day high we could see some upmove in some of the major large cap stocks like SBI, Reliance, L&T and this is really a positive sign for the market. As a buyer I need to wait for 5440-50 zone to be taken out on the upside so that I can get a better clarification regarding the upmove. From the volatility data it is evident that nifty is getting resisted only due to short positions and not long unwinding. Thus we could conclude an upmove only till the mentioned zone, logically if there are more short positions the sharper would be the move. On the downside 5320-5330 could be an immediate support zone and it is good that nifty could spend a range bound session by testing the lower levels. These kinds of markets would give traders a little more time for accumulation and that would define momentum on the upside or downside and all the major moves emerge from a boring market. SBI is close to 2330 and a short covering rally would be possible above these levels that could take SBI to another 70-80 points on the upside. Lot of buying is happening on the lower end of the range but the short positions on the upside are limiting the move. It would give more time for options traders to initiate a long straddle as the budget session is close by. On the downside I would wait for a much deeper cut to be a buyer or either wait for an upside break out for a buying position. Thus even if it gives a range bound session it would be good for options traders as one could get the near out of the money options at a cheaper rate. Let’s keep 5320-5440 as the range and above 5440 it is a break out trade on the upside. Keep an eye on Jindal steel and ICICI bank as these stocks would give a leading indication for any trades in nifty.

Nifty weekly update 12-16 March 2012

Nifty gave a strong rebound from 5200 levels , bank nifty and metal index led the rally on the upside. In the commodities market we could see Nickel trading closing to the bottom and copper is making an interim support zone.These factors would act as a positive factor for nifty in the shorter frame work.Among the stocks two of our leading stocks ICICI bank and Jindal steel gave more than 5% gain and an intra day trade was worth giving a look.In the coming days too let it be an upside or a downside trade if you one is not getting any opportunity to trade go for these two stocks for intraday trades. We have some important events in the coming week and expect the reaction in the market in terms of high volatility. For option traders , it is worth taking a long straddle position with a a delta neutral position(positional trade). We have some important support levels lying close to 5200 zone and on the downside this is an important level to watch out for. On the upside as i was mentioning nifty futures got resisted around 5440 thrice and that would be an important zone as there are lot of short positions lying over there. As the week is fully packed with events one does not have to take a positional trade and an equity trader could cut off his / her positions from an intraday perspective. Even if nifty touches 5600 on the upside it is again an exit signal for me and it needs to spend some more time at the base for a better accumulation.As per the time cycle the date of 20-21 March is getting closer and it would be a trend deciding move and it could most probably confirm the top.Let the range be 5320-5440.One can see the previous day's chart to see the whether the support line proved to be correct or not.

Nifty update for 09 - March - 2012

Though Nifty futures made a new low it did not sustain at the lower levels and gave a decent bounce back,ended the session without much loss. As the volatility index gave a negative closing for two consecutive days it is evident that short positions are getting covered at lower levels but no signs of long accumulation could be seen in the chart. Dollar /Inr gave a lower closing due to some short covering and it triggered some buying happening at 5200 levels.Poor turn over data shows that not much accumulation happening in the equity segment but short covering was evident in stock futures. As I mentioned in yesterdays post there is no need to initiate any fresh short positions at lower levels and wait for a better trade after this range bound session. An interim bottom cannot be formed in a day and above the day’s high of 5280 levels we could see some more upmove but it could get resisted well at upper levels. One could see a significant reduction in the option premium and thus options’ writing is not advisable at current levels because of the local events ahead.  The multiple support levels and the liquidity waiting on the sidelines could give some buying levels at lower levels but let it give a more sustainable rally for more buying positions. If nifty futures breaks out above today’s I would like to take a trade on the long side with a near out of the money but only from an intraday perspective. If we compare our charts based on the time line nifty futures downside level was mentioned at 5180 and it almost achieved that level, (click on the chart and compare it with the same chart of yesterday) now wait for some volatility to come in and let it cool down for a trend reversal on the upside with good volume. On the upside 5350-5400 seems to be a major hurdle and above that we have lot of short positions lying at 5440 levels. In a nutshell if one has any buying positions, hold it only from an intra day perspective and let it give a convincing move on the upside for a reversal. On the downside even if there is cut I would not be going short as the time cycle data shows an interim bottom is close by and we have a top confirmation close to 20-21 of March. Let’s keeps 5180-5330 as the range.

Nifty update for 07 - March - 2012

Nifty futures continued its downtrend  and it hit our downside target of 5240. As mentioned in the previous post base metals could not hold onto to the support levels and that led to the downfall in the second half of the day. World markets are also in a corrective mode and it weakens the trend in the coming days. As a trader in nifty futures i would have booked at least 50% of my entire short positions at 5240-5250 levels. It tried to give a surprise up move on the upside but could not reach above our resistance levels of 5440. As of now we could not see any reversal patterns in nifty and lets wait for an accumulation pattern in nifty before getting in as a buyer. One important development that happened in today's trade was Bank nifty trading below the important support zone.Let's wait and watch whether it could hold on to the support zone or a crack towards 9600 zone. Dollar/Inr is on a rise and it would be heading towards 52 levels soon. We should watch these levels of dollar and base metals for the first reversal of the corrective move in nifty. As a trader i would not be initiating news short positions but would hold onto some of my previous short positions. It was a range break out below 5330 and as mentioned if it is a range break out it would be a positional trade. Now we need to watch out for the support levels and no buying is advised until we get a base formation pattern. Always remember that the first move on the up move would be a short covering rally and nifty charts are telling us we need to wait for a more convincing move to create long positions. We could see some break down in our leading  stocks like ICICI  bank and Jindal steel , thus lets wait for a good consolidation and then start buying.
Lets keep the range of 5180-5330.

Nifty update for 06-March-2012

Nifty futures has decisively broken the support zone of 5330 on the downside and closed below the mentioned levels. We good also see a good up ward momentum in dollar/inr too and it might be heading towards 52 zone as mentioned earlier but the movement seems to be slow .Though surprisingly we had a low volume it is clearly a lower low in nifty futures. Some short positions got covered in the final hours of the trading session and it shows traders are not very much convinced about the depth of the downward momentum and waiting for a more convincing move after the election results.Ideally on the downside the immediate target could be 5240 levels and any rally could be seen as a short covering rally and the reversal on the upside is only above 5440 levels , the rest of the up move can be treated as a short covering rally. Some of the major stocks like l&t, SBI, ICICI bank and Jindal steel did not recover from the days low and read the movement of these stocks for a better trade on the long or short side in Nifty.In the commodities market copper could not hold to the highs of 430+ and this could hurt the base metals and we could see a reversal only above 435 levels.Our time cycle date of March 20-21 and April 1-10 would be relevant and nifty seems to be moving in the same direction and in March, nifty could give a short term rally to confirm a top close to these dates and thus keep an eye on that too.

Nifty weekly update 05-09 March 2012

We had a range bound session in the past week and as i had discussed the heavy premium had to get reduced by squaring off the existing positions.The range is still tight between 5330-5440 . It exactly held our upper range of 5440 on the upside on Friday. As a trader i would be initiating a long trade only above these resistance zones.We could see some interesting positive moves in ICICI and Jindal steel and it would be good if it could sustain the positive momentum.Thus wait for a break out for a better trade and in the shorter term and i would maintain my bias towards upside only till 5330 is taken out on the downside.As long as the lower levels hold nifty could test the upper levels of 5625 once again but the mentioned stocks should first give a reversal on the upside. SBI also has to clear 2300-2325 (futures) zone for a journey towards 2400 because lot of short positions are still lying at these levels. On the long side if i would take a trade if it could convincingly cross 5440-5450 zone for a target of 5600 levels but that would be my exit point as the correction is due for the previous vertical up move. On the downside if 5330 levels are taken out then also i'm getting a trade on the short side for at least 100 points. Thus the current scenario explains that it should not be an intra day trade if it breaks out and the trade should be on the positional side. As per time cycle nifty could confirm a top close to March 20-21 and if there is a rally it should be happen within the first 10 days of April.
Lets keep the range as 5330-5440 and the break of the range should be considered as a trade for targets of 5240 and 5600 respectively .

Nifty update for 2nd March 2012

Nifty futures held the most important levels of 5330-5400 levels once more but could not give a convincing move on the upside. I have been mentioning about three stocks in the previous posts ,they are ICICI bank, Jindal steel and SBI. These 3 stocks did not recover from their daily lows and ended on a negative note. If the most positively correlated stocks are not giving a reversal it would be a wait and watch signal for traders on the long side. The advance/decline ratio was in favor of declining counters but volume data is not confirming a heavy selling.Volatility index is showing some fresh short positions around 5440-5450 counter and thus says nifty would need a minimum of 2-3 days for any good up move as these shorts are placed on a larger zone of 5440-5450 and around 5520-5550 zones.Some of the important stocks like ICICI and L&T are trading below the support zones and this would be a major worry for markets in the coming days. Institutional traders have just started their selling and if it breaks 5330-5340 zone on the downside Nifty could show further weakness towards 5240 levels.Thus  if any one wants to be a buyer wait for a better consolidation phase as all the major moves have been emerged from tight range bound markets.On the upside 5440-5450 would remain as a major hurdle and it would be a good sign for the bulls if it could surpass these levels with good volume.Watch these leading stocks like Jindal and Icici bank as the leading indicators of nifty and then get into a trade.As per the time cycle i had already mentioned two important dates, they are March 20-21 and dates from April 2-10.If there is further upside in terms of a major rally it could happen from April 2-10 and March 20-21 could be trend deciding days.An upside for the dollar is quite possible because of the time it took for forming a bottom. Thus lets keep a range of 5330-5440 and a decent break out on the downside for a trade and the upside break out for just a confirmation of a bottom and not for a trade.