Nifty update for 01-05 April 2013

Nifty futures hit a new low on the day of expiry and was trading at a significant discount till after noon and as i said in the previous post it can most probably form a bottom whenever the index starts trading at a discount. The session was quite volatile and the index is expected to trade till 5800-5840 with a strong support close to 5550 zone. Most of the cash flow indicators were in the oversold territory and many stocks would continue the rebound in the coming week. There were no signs of bottoming out in many stocks but it is good to see that at least some of the stocks are waiting for a rebound. PSU banking space and metal stocks are were we could see lot of short positions and these are the sectors to focus on any rebound. Allahabad bank, JP associates and LIC housing would be the top pics for this rebound and i expect these stocks could give a cumulative return of 30-35% in the coming weeks. Banking index has broken from the Head and shoulders pattern on the downside and the pattern seems to be giving targets close to 10500 levels . Thus one has to be careful while choosing the stocks and concentrate on only 3-4 stocks and once you get the short term bottom never leave those until the bounce is completed.

Nifty update for 25-29 March 2013

Nifty might be consolidating in the mentioned range of 5550-5840 levels in the coming weeks and options writers could really make good use of the range. We could see a lower turnover day combined with a negative volatility index which shows squaring off short positions at lower levels. It opens up for a bounce from the current levels to 5800 levels within a week or two. The market itself is confused and the leading indicators like bank nifty and mid cap index are making new lows.There is a clear Head & Shoulders(a bearish chart pattern) break down evident in bank nifty which could make things worse for nifty to sustain any bounce. Bank nifty is most likely to break down to sub 11500 levels in the short term after spending some time in forming the neck line close to 12200. We could not see nifty in a discount till now and that is where we could say it has formed a temporary bottom. If we analyse the chart structure of nifty we could see that the up move started from 5550-5600 zone and there is nothing wrong in nifty retesting these zones. The European market charts like CAC, DAX and FTSE seem to be forming a double top than breaking out to new highs. For nifty 5800 - 5840 should be stiff resistance in the coming weeks too and stocks should witness mild pull back rally from current levels.The index is at the bottom of a trendline joining the previous low zones and many stocks are in oversold territory.

Short covering expected - Jindal steel,Sterlite,Andhra bank,Biocon

On the short side - Idea,Sbi (below previous low)

Nifty update for 21-March-2013

Nifty continued its downward move and is expected to give a bounce at any level below 5700. Lot many stocks have made new 52 week lows in the current downward move and it says lot more pain is left in the system. It might come to test the previous low zone but cover your short positions at any level below 5700 and wait for a bounce to 5790 - 5840 zone.The pain in the system can continue as lot many stocks have hit new 52 week lows in this process and it is not a good scenario for equity investors.As mentioned in the previous chart nifty would complete wave C between 5550-5680 zone and it would start moving up from there on. It can be a process and it is better to stay with high beta banking stocks like YES bank, Dena Bank and Allahabad bank during this consolidation phase. Bank nifty would be the one to support nifty's bounce back as it reached the support zone of 11200-11300 at a faster pace  than nifty and this can obviously be a leading indicator for nifty. I had mentioned a target of 300 for DLF in one of the previous posts and i was short of target by about 10 points as the stock reached a new high of 290 in the previous week. The stock is likely to top out close to 280-290 and it would be tough for the stock to surpass the previous high zone.As per the time cycle nifty is going through an important phase from 21-23 March and it can place an interim bottom during these days.

Nifty update for 13-Wen-2013

Nifty is expected to face a stiff resistance close to 6000 zone and is expected to trade in a range of 5800-6000 in the coming week too. It can retest the bottom zone of 5600-5700 and i don't expect a new bottom below this zone soon. Even if it breaks the lower zone it can be considered as an opportunity to invest in certain stocks for the final leg up to 6300+ levels. As per the hourly chart we have wave C pending on the downside with a target just below the lower zone of 5600 levels.It can be a time consuming process as the large cap stocks can still be in a range for some more time. Some of the major private banking stocks like Axis bank, HDFC bank and YES bank are on the verge of another big correction and this can give it a dull picture in the coming days.As of now 5850 would act as a short term support zone from where lot of buying positions have been created and we have got some important moving averages close to that.

Stock to watch

1- Dishman Pharma - The stock has completed wave 2 on the downside and the 3rd wave might be in process and it cannot be the shortest wave. The stock is trading at 75-77 level and it can touch 120-130 within a years time. Keep a deeper stop of 60

Nifty update for 04-08 March 2013

Nifty futures hit the mentioned levels of 5650-5700 levels and is expected to give range bound sessions between 5600-5850 zone in the coming week. The maximum downside i am expecting is close to 5550 levels and any break below 5650 is not an opportunity to go short and wait for the right moment to go long. One doubtful scenario arising right now would be the movement in dollar/inr. Dollar/INR is expected to touch 58 levels in the near term and one can buy it on any dip.Traders might have a wrong perception that it would inversely affect the movement with nifty but it is better to be long on dollar than nifty. Bank nifty has reached its strong support zone and as usual it gives the leading indication about consolidation at lower levels.Nifty has already completed a 5 wave pattern on the downside in the hourly chart and we could see some consolidation happening at lower levels and i would not be a short seller in the current situation. Stocks like JP associates and DLF are waiting for a decent bounce and have already given the indications of going up and i would be a buyer in these stocks for a bounce.Nifty could retest the bottom once again and it should be treated as a consolidation phase.