Nifty update for 1-June-2012

Nifty opened below the mentioned support zones of 4920-30 and it is expected to trade lower till 4800 in the short term. The important resistance levels on the upside would be 4970-80 from where nifty started losing its upside momentum. It was a quiet market yesterday with some whipsaws on both sides. In a quiet and range bound market a smart trader should always watch the price action of large cap stocks. We could see major banking stocks SBI, Axis bank and ICICI bank breaking down from the current price range. If we have a look at the turnover data, we could see some huge selling happening on any rise in the market. Dollar/Inr is making a new high everyday and the GDP data revealed how weak the fundamentals are. It is better to wait for a good accumulation pattern in large cap stocks and we could see some buying happening only nifty spends some time in a range bound market. Volatility data shows some short build up is happening on every rise in the market and thus I would not be an aggressive buyer in this market. The price range could be 4870-4970 and consider the break of the lower band as a break down to 4800 levels.

Nifty update for 31-May-2012

Nifty seems to have resumed its downtrend after a much needed bounce to 5000 + levels. The key support levels on the downside are 4920-30 band where lot of buying has happened in the previous week. A break below this can be considered as short build up happening in June futures. As said in the previous post 5000 call got written at 30-35 bands and yesterday’s trading session was justifying that. Thus it is better to avoid any long positions below the support zone as the cut could be severe. For a nifty trader observe the increase in premium before adding any long positions. It is evident that nifty is not showing any addition in the premium and it shows lack of demand on the long side.

We may be close to bottoming out as one of the conditions for the process would be huge discount in futures and the second one is huge rise in volatility where the options premiums are getting expensive.The second condition is yet to happen in the coming trading sessions where we can take a decision about going long in the market. Stocks like tata motors and DLF which were forming a base at lower levels could see major downward move, that too with heavy volume. All banking stocks which were rallying due to short covering would find it difficult to continue to the upside momentum as the major part of short covering is already done. If nifty is not holding the mentioned support zones it is expected to trade lower till 4750-4800 in the short run. On the upside the important levels would be 4970-4980 where nifty started losing the strength.

Nifty update for 30-May-2012

Nifty futures ended flat after attempting a close above 5000 but the choppiness was evident throughout the trading session. It is expected to take support at lower levels of 4920-30 and head towards 5030-50 levels in the short run. The options table tells us that lot of 5000 call options are getting written at 30-35 band and even if nifty stretches above 5000 zone a break and closing above the band would tell us whether there is some more steam left in the current up move. As said in the previous post 4920-4930 would be crucial as lot of buying has happened at that level and that would be the stop for all the long positions in nifty. Volatility data shows some short build up at higher levels especially in 5000 call. Turnover data still remains poor and it shows lack of demand from the retail investors and good accumulation would be necessary for any further up move. I expect nifty to trade between 4920 – 5030 in tomorrow in the coming sessions.

Among the stocks , Maruti Suzuki is showing some consolidation at lower levels close to 1115 – 1120 and the stock has retraced 61.8% of the previous rally. The current consolidation shows it can give 25-30 points on the upside. We expect nifty to trade between 4920 – 5030 in tomorrow in the coming sessions. 

Nifty update for 29-May-2012

Nifty did break the immediate resistance of 4950 and gave a decent closing above the resistance levels. We saw a dip close to 4930 levels but that dip was being bought and we could see the extension of this rally with a support at 4920-30 levels. Any levels above 5000 would give us a decent exit levels, let it be 5050 or 5070 and wait for a good accumulation pattern for any further up move. As said in the previous post some well respected resistance levels are placed above 5000 levels and nifty is expected to trade down till 4500 in the longer time frame. Banking stocks are giving some interesting up moves but apart from ICICI  bank and Indus ind bank others are just giving short covering rallies. On the downside remember the support levels of 4920-30 and any dip to that zone could attract some buying interest.The poor turnover data shows short covering ahead of expiry is leading the rally and not much buying is happening in equity market. Volatility index shows buying on dips happening in nifty futures close to the support zones. Lets keep a range of 4920-5030.

Nifty weekly update 28 May-1 June – 2012

Nifty is taking its time whether to extend the rebound or to go to further lower levels. As mentioned in the previous posts above 4950-4960 levels it could extend its bounce to another 90-100 points which should be considered as just an extension of a bounce back. Let’s have a detailed look into the components which can have an impact on the further moves in Nifty.If we consider the world economic situation it is really awaiting a recession or I would say it would be the second part of what we have seen in 2008. The rising dollar would be a real concern for all economies and India too would not be seen as decoupled a decoupled economy from this risk. This time the situation looks a little different for Nifty. Nifty was falling, crude was falling and dollar was rising and unfortunately the equity index could not make use of the falling crude because of the rising dollar. Thus when the crude starts rising nifty cannot go up in the same pace as the rate hike cycle can start again with the inflation rising again in the country. Have a look into the chart of Dow, it has made a bearish island around 13400 and would struggle to move up in the coming sessions. As an alternate hypothesis if it moves up and crosses 13400 -500 levels on the upside it can just be considered as an extension of the up move and not a fresh one. At this juncture Dollar index would give the first indication of equity markets bottoming out because I expect it is in the last leg of the up move. If we take the case of Dollar / Inr it is quite different as it is following Dollar index, thus if dollar index makes a reversal dollar/inr would follow. Now let’s have a look into the volume data, it shows a lower turnover data for the past 2-3 months and this shows the lack of interest from the market participants due to the policy paralysis in India. The selling in the equity market does not show any portfolio unwinding and that’s why I would like to stick to 4500 than any other lower levels.  Remember all the major bull markets happen when the pessimism at its peak and if there is no major selling happening it seems to be some kind of value buying happening at lower levels. It is surprising to see a petrol rate hike when the crude is cooling off from its high and I wonder how would they react when the crude shoots ups again. If the measure was to arrest the rising dollar they would get it wrong this time too as this would lead to major problems in the domestic front.

Nifty medium term outlook – As of now everybody is expecting a bounce back above 4950 which would be a 3^rd wave breakout in the short term, (for a chartist 3^rd wave usually gives a dream run).If we could see the chart we could see a well respected downward slopping trend line. The trend line shows levels of 5100 levels as the major resistance and if a short term bottom is in place Fibonacci number shows 5300. These are the levels one might get trapped on the upside as people start saying a bottom is in place and the market is undervalued, we could hear people saying about 7000 levels and from these levels nifty could most probably slip to 4500 levels. Read the market volume during this course of time and see what the smart money is actually doing in the market. In a new trend always look for three sectors Auto, metals and banking. Auto sector would probably give the first reversal, metals would trigger the move on upside or downside and banking would lead the index on any major move. Now it is a wait and watch game for us to see how nifty is going to react to the news flow in the market.

Nifty update for 25-May-2012

Nifty held yesterdays low and gave a sharp bounce back from the lower levels of 4800. It is expected to face some resistance close to 4950 levels and a good breakout above these levels with decent volume can be considered as a short term reversal on the upside.Dollar/ Inr gave some relief for nifty as it came down after making one more high. The question would be a strong rally like this would be met with high demand on any dips and why should not we expect dollar to continue the same ?. Thus the view still remains 4500 in June series and market can punish me anytime with its sharp upside move and i would be ready to accept that. If we see the world market charts let it be dollar index, U S markets or copper it gives me a dirty picture of a clear slowdown. I wish the markets would correct me and make it a better place for bulls but as of now there is no change in the opinion.I did mention about some stocks in the previous weeks post like Ranbaxy, Hexaware (on the long side 23rd May post) and Ambuja cement , TITAN  (exit calls for investors). Though Ambuja and TITAN are still trading flat both the long side calls could give a decent return of close to 10% return within 2 days. One interesting stock for investment (give it a try , the stop is just 10-15 points away) would be Indusind bank. The stock has a decent support at 290 levels and it is bouncing back from the same level for quite a number of times.The stop is close by and ie; below 290 , the moves may be slow but it is a consistent performer. If there is no slow down (as i expect) the stock could give handsome returns in the longer term. 

Watch out for Saturday's post and i would explain in detail why i expect Dollar / Inr at 60 in 2013. It might just be a view as i would be one among the few who gives a wild target like this. I dont wish to be correct this time but the charts say so...

Nifty update for 24-May-2012

Nifty broke below the immediate support zone of 4830 and made a low close to 4780. It is surprising to see  some of the major large cap stocks held high despite the volatility index shooting up to 27. All the major stocks look like waiting for some news flow to happen in the coming days. Dollar is registering new high everyday and reached a remarkable high of 56 which could drag the country to a much dangerous situation. As usual government and RBI could not utilize the falling crude price and the interest rate hike cycle is expected to continue in the near term. As i said in the previous posts time has come to lighten the trading longs and wait for panic bottoms as an entry point. It seems there is some more pain left in the system especially because of the half dead government. As the problem of Dollar/INR has to deal with more of fundamental factors it would not be easy for them arrest the current rise with any rapid action.If there is any downfall happening in nifty banks could lead the down fall and i would be surprised to see nifty in a positive mood in spite of bad news.Any rise close to 4950 could be considered as a short covering rally and only above that could be considered as a major trend reversal for nifty on the upside. Volatility data shows some fear among traders and the discount in nifty shows lack of interest among traders for creating any long positions. With a reversal only above 4950 nifty is expected to trade till 4500 if it breaks below today's. There would be sharp whipsaw's on both sides and traders are advised to trade with caution and wait for panic bottoms to be a buyer.

Nifty update for 23 - May-2012

Nifty tried for a new high but failed to move ahead due to the worry regarding Dollar and took a temporary pause at lower bands of 4830-40. Volatility data shows some profit taking happening at higher levels than creation of new short positions. If the support levels of 4830 are not holding instead of going short look for a panic selling bottom to be a buyer as the price is moving ahead of time. Nifty can take some support at lower levels and trade higher close to 5000 levels. Thus the support levels would act as a major play maker in the game.On the way up we might be playing for a bounce back in the larger downtrend and limit the trades on the long side only to that extent by squaring off the intra day longs.In the equity segment, Ambuja cement is at a major support zone and a break below the previous days low could take the stock to 120 levels.Ranbaxy and Hexaware would be stocks to watch out on the long side as they are getting good support even in a falling market. It can be a make or break for the market and trade the stocks only according to the market conditions. A break below 4830 could lead Nifty to 4750 levels where nifty could take a pause and the chances are high for a double bottom at least in the short term. 

Nifty update for 22-May-2012

Nifty extended its pull back to 4930 zone but we could see lack of confidence at upper levels. In the coming days it can take support at 4830-40 zone and expected to trade till 5030 zone. It would just be an extension of the pull back so it can be 5000 or 5030 levels and the upper bands are points to exit. Dollar/INR has registered a new high and that would be a major worry for equity markets to go up. Turnover data was one of the worst in the recent past and shows people are staying away from the markets till there is some clarification regarding the policy measures. Thus it is better to square off the buying positions on intra day basis. As per time cycle if Nifty has to surpass 5000 zone it has to do be on or before 25/ May. Thus till Friday this can be the maximum upside range that we can expect. The overall picture for nifty would be making a small range with some sideways move or whipsaws. After some sideways action it is expected to trade till the previous low zone of 4500 levels in June series. Volatility data shows some short positions are building up at upper levels so a sharp move can cover up all these positions. On the lower side 4840-30 remains to be a strong support zone and that region could be the stop for all long positions. 

Nifty weekly update 21-25 May 2012

Nifty made a low of 4767 which is considered to be a decent target on the technical charts and bounce back to 4900 levels. We had a downside target of 4800 and were waiting for a sharp recovery. It is expected to trade till 5030-5050 bands by taking support at 4800 zone. Thus the bounce would give some time for short sellers before the next leg to 4500. U S markets are trading close to the 200 DMA (the so called support zone) and can give a temporary bounce from these levels. If nifty is not trading till the upper bands and take out the low in the initial trading sessions itself we could see that as a buying opportunity as the degree of decline was so severe. If we have a steep fall like this market is likely to bounce but retest the bottom and make a double bottom at lower levels. Dollar / INR have made a new high and it would attract buying interest on every dip. Thus the structure of nifty actually supports a pullback rally and the most beaten down sectors like banking and metal could lead that. The overall structure looks like it is ready for dead cat bounces like this and expected to test the previous low zone of 4500 in June series. 

Nifty update for 18-May-2012

Nifty respected our upper band of 4910 and headed towards 4830.It is trying to make a base around these levels. It took support at 4830 twice and a break below this would create some more panic in the market. Thus it is wise to go for some bottom fishing in stocks in the coming weeks. Usually if it is a double bottom break out traders would not get much time to go short as it would be a gap down opening. The scenario would be same today also if it tries to break those levels as lot of traders expect 4800 levels would be a support and the more buying positions are there the more would be the selling pressure. I would like to have a look into stocks titan and delta corp. Titan is showing the same structure like the weaker stocks like Maruti and Orchid. It got time to distribute at the top and below today’s low investors are advised to get rid of the stock. The stock might get corrected to 190 levels below previous low. Delta corp. is trying to build a base around 58 levels. Wait for the base formation to get completed and get into the stock if it is forming a base around these levels and it could get completed within a week. On the upside the break out of 4910 can lead nifty to 5030 levels and if you are not getting an opportunity to go short below 4830 leave it and wait for a short term bounce. As I was mentioning about 12750 as a critical level for Dow and the index is trading well below that. Thus don’t rush into trading longs and be an investor at lower levels.

Nifty update for 17 - May - 2012

It opened with a gap and could not close the gap till the end of the day. Nifty has almost reached our downside target of 4800 as i said it is better to wait outside if you are index trader.As i said in the previous posts we could see short sellers getting enough opportunities for booking their short positions but the buyers are getting trapped at every level , let it be 4950 or 5000. Thus it would be interesting to see how nifty would behave when it is close to 4950 levels.In the stocks there would be some more downside if nifty cracks to 4700 levels.

Stocks like Indus ind bank and HDFC are at crucial levels and on a breakdown i could see 8-10 % cut from the current levels.As an investor it is better to do some shopping in stocks like Reliance at 630-640 levels on any panic selling days. Just add stocks in a systematic way so and Banking should be one sector that one should avoid at these levels. The worst is not behind us and it is yet to come , the volatility index is showing the amount of fear by rising close to 8%. It tells you uncertainty is here to continue as the rupee has also registered a new high. Lets keep a range of 4800 - 4910 and no need to create any short positions on the downside break out. 

Nifty update for 16 - May - 2012

It was a day for a much needed relief rally close to 4950 levels. As i was mentioning in the previous posts traders are getting enough time to close their short positions and any rally in nifty is happening due to buying happening at lower levels. On the way up nifty has to cross so many hurdles which are placed around 4980 and 5030 and it does not appear to be that easy.  We could see some serious short covering happening in stocks especially in L&T and some major large cap stocks. Though there was a bounce back, banking stocks were not in support of that rally and that should be considered as a negative factor for nifty.If there is an extension of this short term bounce stocks like federal bank and Voltas are expected to move higher. On the short side if nifty makes an upside cap the negativity would be visible in stocks like Axis bank and IDFC. As a trader apart from nifty and the mentioned stocks i would not like to go for any other and it can be a choppy market.Anyway as per the charts and derivatives data 4800 would act as a decent support on the downside and any fall close to 4800 should be taken as an opportunity to cover any short positions.Volatility data shows some short covering happening close to 4880 levels and never try to go short when nifty is trading at a discount of 5-10 points.

Nifty update for 15 - May - 2012

Nifty made a new low below 4900 and it was really a disappointing session for Indian equity market as the trading got stopped after 1.30 p.m. It made a low below the immediate support zone of 4900 and it is expected to trade till 4800 on the downside. Though it can give some relief rallies I don’t understand why it should come up in the near future as there is no good news in the market. It is always the pessimism that gives an opportunity for a bull market but even if the market discounts some bad news there should be good amount of positive news for a sustained rally. In the longer run it would be a good opportunity for investors to do some shopping in equity market and I would like to be a buyer in ICICI bank close to 650 – 700 level. As an investor one should show the courage to pick some stocks at heavy selling days and technically we call it as selling climax. Dollar and U S markets are on the verge of a break out and these things could trigger a major sell off in equity markets. Thus ideally it is not wise to short in the market below 4900 if there are no decent bounce backs. Bank nifty made a new low below the important Fibonacci zone and it again tells you that there is some more weakness left in banking stocks. Though the ideal target still remains 4800 if you are not experienced options trader it is better to stay away from nifty. If nifty starts coming down stocks like Axis bank and Union bank are expected to lower.

Nifty weekly post 14-18 May 2012

It made a new low at 4900 and tried for a bounce back but could not sustain at higher levels. On every rise lot of short build up is happening but it is giving time to square off all the positions at lower levels.On the upside we could see some of the buyers are getting trapped at 5030 and 4980 levels. If there is any rally on the upside i expect these buyers would get a good opportunity to exit their long positions and the upside will get capped around 5050. In the previous week we have seen nifty getting stopped twice around 5050 region and the zone should be considered as an important resistance zone in the days to come.After some side ways move it is expected to trade lower till 4800 with a short term trend reversal placed at 5050 -5060 levels. Bank nifty has also come down to 61.8% Fibonacci zone and instead of searching for short selling ideas it is time for investors to look for buying opportunities in banking stocks.There may be quite a few weak banking stocks like Canara bank, Union bank and Bank of India but wait for decent bounce to go short in these weaker names.As mentioned in the earlier post Dow is at a crucial support level and it could be broken any time, read the U S markets along with the Indian equity market. If you are an investor breaking of 4900 would give you attractive buying opportunities and wait for selling climax points to get into banking stocks. Lets keeping a range of 4900 - 5030 as the weekly range.  

Nifty update for 11-May-2012

Nifty did make a pause close to the mentioned upper level of 5050 and made a low close to 4950. There would be some more short term relief rallies and after some sideways move it is expected to trade till 4800 in the short term. It is testing the 61.8% Fibonacci zone many times and all the short term bounce backs till 5130 are expected to be sold into. Volatility index closed on a negative note an we could see a marginal increase in the premium. It indicates some short covering happening at lower levels and the indication is not many  short positions are trapped at lower levels. Thus we could not expect a short covering rally, and we could see some buying happening at lower levels. Though i'm not denying the buying happening at lower levels smart money is not entering the market and the lower levels in SBI is an evidence for that. If we observe the Dow chart we could see the secondary rally started from 12750- 12700 levels and traders should consider these levels as important as Dow could slip to 11000 levels once again after the support zone is taken out. We could see Dow flirting around the support zone in this week and it is yet to be seen whether it is doing a base building process or getting ready for a downfall. At this point we focus on Dow too because personally i don't believe Indian markets could be decoupled from the rest of the world.

Nifty tested its 61.8% level close to 4950 but the corresponding level in Bank nifty would be around 9200.The level is yet to be tested and with the fall we had in SBI after a quick bounce in the morning it is evident that no strength is there for a meaningful upside journey. One stock that i would like to get off would be Orchid chemicals (below the previous low) as the distribution pattern is getting dangerous and as an investor it is better to avoid this stock. A short covering rally in nifty could save the stock in the short run but the structure looks really disappointing in the longer term.

Nifty update for 10-May-2012

Nifty did one more low around 4950 which is considered to be an important level in the long run. Some of the major large cap banking stocks like SBI and AXIS bank are in the oversold territory and wait for a bounce for further short build up. Price correction is a little ahead of time correction and if it corrects further to 4800 without a bounce one should definitely search for buying opportunities.As per time cycles the actual dates are lagging and the price levels are leading thus a quick bounce is not ruled out from any of these lower levels. After some major relief rallies it is expected to trade lower till 4800 in the short run. Lets wait and watch whether the rallies could extend to 5050 or 5100. If it breaks down tomorrow itself we could see panic bottom in many stocks and in that case investors should have the mind set to do some shopping in equity market. Volatility index was still on a rise but decreased marginally during the final hours of trading indicating some short covering happening at lower levels close to 4950.Lets keep a range of 4910 - 5050 and use the upper bands as levels to exit.

Nifty update for 09 - May - 2012

The so called ' dead cat bounce' is over and nifty is again on its way back to form its final wave count close to 4950 levels. If we take the whole rally from 4530-5630 it will retrace 61.8% of the move around 4950 and if we take the final wave counts from 5350 levels it should stop around 4910 levels. Thus these are the levels to take off money from the short positions and get out of the market. As we all know below 5000 the whole trading community will turn bearish and this is the time to make some smart moves.Volatility index is again showing an uptick indicating every rise in nifty is getting sold off.  If the downward momentum strengthens we could see panic bottoms for many stocks and pick some stocks at these bottoms where many traders would not do anything. As of now i would stay with BHEL and expect an interim bottom around 190-195 levels,would like to accumulate other stocks at different levels of nifty purely from an investment perspective. When the whole world is turning bearish at one point of time there would not be any sellers in the system , thus logically these are the times to be really wise and make use of your intelligence to make the right move. Don't be in a hurry to grab all the stocks , be patient and make sure that you are selecting the right stock and do it as a step by step process (remember wealth creation does not happen in a day , it can take long time).As a nifty trader the coming days are to exit my short positions and get out of the market , you can wait for a panic bottom or the opening bell and it depends upon the experience of the trader. Lets keep a range of 4910 - 5050.

Nifty update for 08-May-2012

As said in the previous post Nifty cracked close to 5050-5000 levels and bounced back to 5130 levels. I would like to see it as a bounce back as per time cycle than a meaningful pull back. I did mention about the importance of date close to 5th May for a trend deciding move. Though it was a decent short covering rally based on GAAR news the banking stocks are really broken down and continue to be the worst performers in the short run. Stocks like Axis bank and ICICI  bank held their support zones but SBI did crack its support zone. The current pattern in nifty shows one more wave down to 4950 with a reversal placed only above 5200-5230 zone on a closing basis. Volatility index is showing some short covering happening at lower levels but no long accumulation is visible as of now. There is only bigger stock i was recommending from an investment perspective ie; BHEL (see the previous week post). Leave banking space for a better accumulation pattern and let the market consolidate or give a reversal for any upward momentum. Thus we have completed a 50% correction of the big rally (4530-5630)and it is considered to be an important support zone. It is expected to retest these zones in the coming days with the mentioned reversal levels.Lets keep a range of 5200 - 5050 and consider the upper band as an exit point for any long positions.

Time cycle - Important dates.

As per the above chart if 4950 has to be hit this would most probably happen on the 14-15 th of May 2012.Any up move would be resisted close to 5230-5250 so there is a good chance of nifty going up and trapping the bulls. If the mentioned level(4950) is not hit on the specified dates we can assume that the downtrend is matured and it might turn on the upside soon.

Nifty weekly update 07-11 May 2012

Nifty finally broke out from our support zone of 5180 and is on to a journey towards 5050 or lower. Most of the bigger stocks are still breaking down and they are not showing any signs of short covering. Anyway we are close to the 50%  level of the entire rally from 4530 - 5630, so i would like to square off my short positions and wait for a bounce back. Though the bounce back could extend to 5150-5180 levels it is expected to come down to 4950 in the short term. As per time cycle we had our date on 5th of May which is very crucial for a trend deciding move. The trend for the short term is clearly on the down side and any bounce back would be met with some selling pressure on the upside. Bank nifty has broken down from an important support zone and thus it cannot support nifty on the shorter term. Stocks like SBI and Axis bank are close to their support zones of 1950 and 980 respectively but ICICI bank seems to have a lot more downside than the other banking stocks. I did mention about the low volatility index before the previous expiry and volatility index was expected to rise.The volatility index came up from the lower levels of 17-18 to 21+ levels indicating lot of short positions in the market. Thus if you are short in the market wait for a decent bounce to trade on the short side.

Nifty update for 04 - May - 2012

Nifty made a pause close to our lower band of 5190 and some short covering could be seen in the final hour of the trade. As mentioned in the previous post stocks like SBI and ICICI bank have registered new lows and trading very weak. Though the structure is really broken down wait for a short term bounce in major banking stocks for going short. In the short term any upside move could attract lot of selling pressure close to 5300 levels. Thus nifty could come to 5050 levels where the next level of retracement is placed.  If we observe the charts most of the bigger stocks are forming a much larger distribution pattern and this could be a dangerous sign for any upmove.Some stocks like TATA steel , Orchid chemicals, ABAN, Sail, BPCL etc are quite good examples for this distribution pattern. As i mentioned in the previous weekly post the current down trend may continue till the 5th of May where it could make a trend deciding move and we are close to that date.The decline in some of the stronger stocks like TATA steel and HDFC are really disappointing for the bulls and these stocks would lead the decline if nifty starts coming down. If i want to be a buyer i would just try with a beaten down stock like BHEL as the stop would be close by. In the commodities market copper is taking a pause close to 448 levels and thus it could affect the metal stocks in a bad way. Volatility index was on the rise indicating accumulation of short positions on the rise.5180-5190 could still be a decent support on the downside where one could take off some money from the short selling trade but these support levels cannot not lead to strong upmove. We could keep a range of 5180 - 5240 where the break out of lower band is considered to be a major break down to 5050 level.

Catching the momentum

1. TATA steel - The stock was in a range bound mode since February and  got enough time to get distributed on the up side. Thus below today's low it could confirm the distribution activity and could lead the stock to 410 levels. If you want be on the long side it is better to wait for a confirmation on the upside. The same can be applied to stocks like ABAN, SAIL where we could see a much larger distribution pattern.

2. BHEL and POLARIS - BHEL is in severe down trend for quite a long time and the stock has got enough time for the distribution.Thus as an investor i would like to search for some buying opportunities in this stock. Buy in small quantities and as an investor complete the accumulation in a larger range of 40-50 points. Polaris looks like an oversold stock and it does not qualify to be a short candidate. If there is a short term bounce in nifty the stock could go upto 140 - 142 where lot of short positions are lying.

Nifty update for 03-May-2012

Nifty futures touched 5300 levels once again the extended short covering rally was sold off at higher levels. If we look at the structure of many stocks like ICICI bank and SBI we could see a reversal from the important resistance zones.Thus it is still a wait and watch game and as said in the previous post if you are a nifty trader exit all long positions at the upper band of 5300+ levels. Bank nifty is still struggling to find its upside momentum and the positive move in copper cannot be utilized by the metal stocks. Dollar /Inr may be targeting new highs and that would be worry for the equity market to move up. The premium in nifty futures has come down with a rise a the volatility index showing sell on rise and some short positions are accumulated during today's trade.The Indian government and RBI got it wrong every time when ever they took some decisions about rate cut and controlling the currency manipulation. RBI declared a rate cut a week ago and crude oil has registered a new high and it is still surprising to see how they are getting it wrong every time. The policy paralysis is affecting the market every time when it tries to rally. For a nifty trader 5300 + levels are still a major resistance point and if you are short in the market levels close to 5330 would be the stop. Though some bullish voices can be heard here and there i could not see any long accumulation happening in major large cap stocks.In these kind of tight range bound markets ,considered to be an options writers paradise it would difficult for futures traders to sustain. Thus concentrate on stocks which are offering you good trading opportunities.Lets keep a range of 5190 - 5330.

As per the requests from some readers i am starting a new session for stocks only from a trading perspective . (The views expressed here are personal and make your own judgement while taking the trades. Don't wait for targets to be achieved as the risk/ reward capability of every trader is different.I personally don't encourage trading in futures though the rates mentioned here are of futures contracts.)

1. TATA motors - The stock has completed an up move and a secondary rally too. Any downward move below previous day's low could lead the stock to 295 zone. Though it wont be a short trade for risk averse traders it is considered as an exit signal from the long positions.


2. JET airways - The stock is still in a range bound mode but a break below the previous low could take the stock to 295 levels where the next Fibonacci number is placed. The volume data is showing a distribution pattern and does not look good on the long side.

3. BPCL - It took some time to form a top and thus it qualifies for a candidate with a good potential on the downside. The stock is considered to be very volatile and a break below 650 levels (eq price level) could take the stock to 590-600 levels. 

Take your own time to analyse these stocks and trade the stocks only if you are satisfied with your own analysis.

Nifty update for 02-May-2012

As said in the previous post nifty gave a short bounce back on monday and can extend the bounce back to 5300+ levels. If we observe the charts we could see it only as a bounce back and not long accumulation as the stocks are still recovering from their downside support zones. In the commodities market there is an upward momentum in both crude and copper.Thus for the equity market to set off a new rally crude oil has to cool off and it does not seem to happen as it is making higher highs. As per time cycle we could expect a trend deciding move close to 5th of may (4th or 6th of May) and till then the range bound situation is expected to continue.In the equity segment banks are still not showing any signs of long accumulation and that would remain as a major worry (Indus ind bank would be an exception). Cement stocks have retraced from their previous highs and some of them are forming a base for a short term up move , so if there is an extension of the rally i would like to go long on these stronger ones.Thus lets keep a range of  5190 - 5330 and consider any upside momentum close to the upper band as exit points.

Positive bias (short covering possible)

Ambuja cement or ACC
Tech mahindra ( high volatile stock)
Sterlite Industries 


Negative bias 
Sail