Nifty update for 19-Dec-2012

Nifty held 5850 levels once more and it is expected to trade till 6150 levels with a reversal below the mentioned support zone. Volatility index gave a negative closing with an increase in the premium and it is indicating that long positions have been accumulated in todays trade and 5850 levels can be treated as a decent support zone in the short term. Metal stocks like JSW steel and TATA steel gave a fresh break out and it could help nifty to break out on the upside and we can still remain bullish till the end of December. Turnover data was good and is in favor over bullish counters , especially in metal counters. Among the banking stocks SBI broke from the consolidation phase and it is forming an inverted H&S with a target around 2750-2800 levels on the upside. Thus lets wait for nifty to break out from 5950-70 range to have a decent upside move before heading lower in January.

Nifty update for 17-Dec-2012

Nifty held 5850 and gave a quick bounce to 5900+ levels and some major large cap names also showed an upmove due to short covering. In the coming weeks nifty is yet to prove whether it can still hold 5850 levels or some more downside is left. If we look at the chart structure of major stocks there are no signs of major correction but clearly a sense of range bound market is evident. Some promising names from the stocks front would be SBI and HCL tech and the banking biggie is close to giving a break out. 2350-60 remains a stiff resistance zone for SBI and it could fly-200-250 points on the upside with a fresh break out. HCL tech is another stock which is holding the support zone for quite a few days and unlike SBI the stock is not a break out trade and i would be a buyer above the previous high.Another interesting stock is TATA steel which is also ready for a break out after a long consolidation.Above 400-405 it can give 10% return within a short span of time. Volatility data is showing some buying happening at lower levels and traders are very much optimistic in December series. Dec 20-21 would be crucial trend deciding days and it could give a major move on these days and till then the index can be range bound , thus it would be wise for an index trader to be active on these days. 6000 levels would still remain as a psychological level to cross and options writers would try their best to hold these levels. 

Nifty update for 13-Dec-2012

Nifty is facing stiff resistance in 5950-6000 region and it might head lower till 5800 in the near term before moving to higher targets. Bank nifty is giving a leading signal by reaching the trend line resistance and PSU banking space might see some correction in the days to come. The premium is still on the higher side showing the over optimistic attitude from the traders and these kind of situations should be handled with hedged positions. 5800 put Dec is trading at Rs.20 and that is one of the cheapest options available. As we have two more weeks to go for the expiry it can be a decent bet for this minor correction.Turnover data is still strong and we could not see any short build up till now and the medium term picture still look good with a bullish bias.Metal sector is yet to give a decent performance and that is the sector one should bet on if there is an extension of this rally. Thus i would be waiting for a dip below 5900 levels in nifty futures to be a buyer in this dip. It is not wise to build long positions in nifty and 5900 + levels and it is good to have a protective put with the long positions.

Nifty update for 10-Dec-2012

Nifty futures held 5970 zone and it is expected to see some profit booking in the coming days. We could see a negative close for volatility index and the premium still remained 35-40 points, thus it could be read only as a profit booking session. Usually when nifty is close to a resistance zone as per the derivatives data and the premium is close to 35 points one needs to be cautious.If we see the chart of bank nifty it has already reached the trend line resistance before nifty.Thus it can lead to a correction in the near term as we first track the respective index before going stock specific. At 5950-6000 it can act as a psychological level than a technical level and it is wise to take some cash from the market and wait for a good opportunity to get in. If we check the past data December has always been good for equity markets and we could see allocation of money from precious metals to stocks , that is seen as a good sign for the markets going forward. It is wise to book some long positions in banking stocks an we could wait for a better levels in banking space to re enter. The status is still 'buy on dips' and 5750 -5800 could act as a decent support zone. I would be a buyer in 6000 call feb options if there is any dip and that would be a much cheaper one than going for futures.Two stocks i would remain bullish would be TATA motors and Allahabad bank and one could use any dip to create long positions in these stocks. Among the metal stocks JSW steel is on the verge of a break out above the previous high of 780 zone and TATA steel would be a decent bet close to 380-385 levels. The strategy would be to wait for a correction to create fresh positions and the target of 6150 is still intact as the structure still looks strong

Nifty update for 07-Nov-2012

Nifty got decent support at lower levels and bounced back close to 6000 levels and is expected to trade till 6150 in the short term. As per the technical charts the target is 6150 but derivatives data is showing lot of options build up is happening in 6000 call options. Thus the market can take a pause close to 6000-6050 levels and short term traders can book their long positions close to these levels. Turnover data is still strong and institutional traders are all set to trap retail investors at the higher end of the channel. Thus concentrate on a few high beta stocks and keep the volumes in your control. Traders usually have the habit of getting excited when the market is  showing a strong momentum and once would have seen everybody has started talking about talking about a bull market when it reached 5900. One sector i'm hopeful for further rally is the metal sector which has a lot of potential on the upside especially the ones like Jindal steel, TATA steel and Hindalco. One should try to get into these stocks when nifty gives a small correction and banks would not be the choice. As i had already mentioned many times in the blog a bull market starts with the huge momentum in auto sector, banks would out perform in the accumulation phase and metals would outperform in the last leg of bull market. The current bull market would be much bigger as still have interest rate cut in the coming year but one should be able to identify the right sector to be in at each leg of the market.

Nifty update for 06-Dec-2012

Nifty is continuing its uptrend and any dip close to 5850 should be used as a buying opportunity and the target of 6150 is still.Volatility data shows some uptick in ahead of the FDI drama but the turnover data is still good and we could see good buying interest from institutional buyers.Among the stocks TATA motors and Gujarat fluoro are looking interesting and i am expecting a combined return of 18-20% from these two. 290 call of TATA motors is looking attractive at Rs. 4 and can double in the month of December and the cost is affordable. Gujarat fluoro is about give a break out from a descending triangle on the upside. Keeping a stop of 330 i am expecting the stock to touch 380-385 levels in the near term. Allahabad bank is another interesting stock which has some upside potential.I would be a buyer in this counter anywhere between 150-155 with a stop below 145 for a near term target of 175-180 

Nifty update for 05-Dec-2012

Nifty held the support zone and it is expected to trade till 6150 in the medium term with a support close to 5800-5820 level.The current FDI drama can have an impact in the medium term but as long as the fund flows continue fundamentals would take a back seat. One important development happening in the global markets is Dollar index is again going to test the previous support zone of 78.5 which has proven to be really strong till now and U S markets would be testing the previous highs again. Thus the hypothesis could be dollar index testing the support zone and bouncing back. Though a bigger head shoulder pattern is developing in the Dollar index it has to break below the mentioned support zone.Thus the bigger picture for next year would be clear only depending upon the move in dollar index too. Among the stocks SIEMENS, Dishman pharma, MOIL and DCB are expected to move up in the month of December and Maruti is giving signs of topping out at least in the short term.Volatility data is showing some long accumulation at lower levels and midcap space is performing really well ahead of any other sector.Turnover data was good too and it is giving the signals of retail participation too at these levels which is good sign and i expect the market to make a temporary top close to the first week of January 2013. 

Nifty weekly update for 3-7 Dec 2012

Nifty held the support zone and it is expected to trade till 6150 with a reversal below 5730-5750 zone and is expected to top out close to the first week of January 2013. If we have a look at the hourly chart cash flow is getting extended and it can result in a profit booking session in the coming week. The turnover data was strongly in favor of the bulls and should be considered as good till gives a lower turnover data.The premium in nifty futures got reduced by a few points and indicates some short build up at higher levels but the positive momentum is expected to continue and any dip close to the support zone should be treated as a buying opportunity. We could see an uptick in metal stocks like TATA steel, Jindals and Sail and would be giving the signals of a bull market and the patterns are suggesting that these stocks would give a much bigger upmove than banking names in the near term.Any profit booking session in the index would be a good opportunity to get into stocks like Hindalco , IRB infra and  TATA steel as the out performance is yet to come from these stocks. Dollar/INR has broken the upward slopping channel and started making lower lows and is expected to trade till 53.70 levels in the short term. If we see the cyclical charts any major upmove/downward move would last for 6 months from January to June and there would be temporary  move on the opposite side.Thus i am optimistic only till 6150 and expecting nifty to completed the top formation close to first week of Jan (4-5th of Jan). Some of the cement stocks like ACC and from the automobile space Maruti are expected to under perform the market in the near term(below the previous low). Stocks like Vijaya bank, Fianancial tech, Orbit corp, DLF are expected to outperform nifty in the short term.