Nifty update for 27-Feb-2013

Nifty continued its journey to the downward channel and it is expected to find some buying interest close to 5650-5700 zone and thus it is time to close the short positions and wait for the budget drama to get over. The correction was inevitable but the midcap stocks were butchered and it is better to stay away from that space. Except a few private banking stocks nothing else is looking good at this moment so don't try to catch the bottom. DLF is the only out performing name in the real estate space and stock is expected to cross 300 in the near term and any deep correction like this one can buy stocks like DLF as a short term bet. Base metals got hammered in the commodity space and we could see the result in equity market too. Stocks like Axis bank, ICICI bank are yet to find a bottom and bank nifty too can find some buying interest close to 11400-500 zone.Till 5650-5600 holds we could say it is a normal bull market correction and it was reasonable as it is logical to assume that any market moves with retracements and pullbacks.Options traders are advised to avoid buying contracts ahead of the budget day as the IV's are expected to come down drastically ahead of the event.

Nifty update for 11-15 Feb 2013

Nifty continued its downward move and met the immediate target of 5900 in the short term. As i said in the previous post the momentum indicators are deeply oversold and a bounce could be expected in the short term. Any bounce to 5950-6000 levels could attract lot of short build up and in the medium term it is expected to correct till 5700 with a reversal above 6050 levels.In the short term chart we have wait for 5th wave completion anywhere between 5880-5900 and let the bounce be over for any fresh short build up. Volatility index is showing buyers got trapped i a range of 5940-60 and it would be tough to get through this range and short positions are still lying at 5990-6000 levels. We could see a premium of 20-25 points even at the time of falling and it was an evidence that lot of buying has happened at 5950 levels and they are trapped as of now.A decent trade in the options segment would be to buy 5900 put and 6000 call at any bounce with a total cost of Rs.100.As per time cycle Feb 10-11 would be important dates and it could be a date for bounce from the current levels.The technical picture of nifty looks extremely weak and it has broken the long term channel pattern but the only thing that is promising a bounce is the oversold nature of cash flow indicators. 

Nifty update for 08-Feb-2013

Nifty is close to the mentioned target of 5900 and i am not expecting nifty to correct beyond 10th of Feb. The index is moving through a well tested channel and we are at the lower end of the channel at 5900. All the cash flow indicators are reaching the oversold territory but the momentum indicators are still in the sell zone. The gut feel says that nifty could eventually break the trend line and trap the bears below 5900. Thus any level close to 5900 can be an opportunity to cover the short positions and wait for an entry as a buyer. Though the correction can extend till monday don't wait till the final point to cover the short positions. Many of the large cap names have corrected a lot and it is better to limit the number of short positions. Some more downside many be left in stocks like YES bank, ICICI bank and LIC housing as these names have not completed their correction till now. Volatility index is showing more short build up close to 5990-6000 levels and we could see more addition in 5900 puts and 6000 calls. The tight range would be difficult to trade and we have not seen any huge build up in 5800 puts. Let nifty do some fighting within the range and no need to get into a trade as long as nifty is staying in the range. As per time cycles 8-10 Feb are dates for reversal and be cautious on your trades. If we compare momentum indicators Vs cash flow indicators i would prefer to go for cash flow indicators and they telling us to cover short positions on any sharp decline to 5900 levels