Nifty update for 30 April - 10 May 2013

Nifty is done with the mentioned upside target and it is fulfilling almost all conditions as per the wave count and the time cycle. After a sharp rally the market is going to be choppy and we cant expect a deep correction this time and it is going to be range bound this time and 5750-5970 can be a broad range for this expiry.Currency market would be good this time around if you are futures traders. As nifty is going to be range bound Dollar/INR and JPY/INR are expected to give good trading opportunities on the long side.On the stocks front Axis bank might have placed a decent top around 1500+ levels and the stock is expected to correct till 1350 levels in the near term. Two interesting stocks to watch would be Lupin and Indusind bank and these would be decent bets for investment on any correction. Lupin has a decent support close to 630-645 and i would like to place a target of 800+ in the coming year. Indus ind bank would be another stock i would like to try to bet on. We could see this stock not correcting as compared to its peers and this can be viewed as strength coming into this stock. 430-440 is a decent support zone for the stock and it is expected to touch 600+ in the coming year. As nifty has almost completed the bounce back it is wise to wait for a correction for any further buying positions. It is quite possible that nifty could spend long range bound sessions in the range of 5500-5950 in the coming months too.At this juncture i would be carefully watching two indices for leading indications ie; CNX midcap and metal index and both have to give good accumulation patterns for nifty to move up.

Trend           Time period                   Target              Reversal

Down            Medium term                5550                   6000

Nifty update 26 April - 03 May 2013

Nifty continued its upmove and it is expected to move up to 5950-70 which 78.6% retracement of the entire fall and i would not like to be a buyer at this level. As mentioned in the previous post i expected the upmove to continue till 5800 and i have liquidated all my long positions in nifty close to that level. DLF and HDFC bank gave a decent return in this current upmove and we could get the major chunk of this upmove. If we see the structure of nifty it has not turned into a bear market yet as it is some how holding 5500 levels on the downside. If we see the entire upmove we could see a V- shape recovery and these kind of recoveries will usually for top conformation because of the simple reason it is not attracting too many buyers. When we see the rollover data it is so poor and not much positions are getting added in the equity market too. After a decent run it wont fall that fast and lot of people would be waiting on the side lines to be a buyer. 5800-5820  would be a decent support zone in the short run and after this run up it is expected to give range bound sessions between 5700-5970 in the coming two weeks. Cyclically May is not a good month for equity markets and if you see the base metals in the commodity market they are still in a downtrend. Thus those short term bounce backs were helpful for metals stocks to rebound along with banking stocks and that was the reason for this sharp recovery. If we see the nifty cycles we are close to a date were we can top out in the near future close to the end of this month. 

Nifty update for 11-April-2013

Nifty bounced back from the days low and it got close to the mentioned target of 5450. The bounce is expected to continue till 5720 levels which is the 50% retracement of the whole fall. Nifty made a low close to 5476 which is an important number and it has completed a short term price and time correction and thus we could see that the lows would be protected in the short term. The medium term picture is still bearish and it would be a sell on rise market anywhere close to 5700-5750 where the important weekly moving averages are placed. I would like to place a medium term target of 5350-5300 for nifty after this short term bounce. It was good to see nifty completing a 5 wave decline in the hourly chart and bouncing back from the falling wedge pattern.The 40 weekly moving average is placed just above 5750 and that is where the bounce back can stop but we could not see any long addition in nifty futures as of now.Thus if it is a gap up it is better to focus on stocks rather than the index and there would be lot of good stocks to play for this bounce. The top picks would be DLF and HDFC bank which can give a cumulative return of 20-25% from the current levels.If we get nifty close to 5500 it would be a decent buying opportunity with an immediate target of 5660 on the upside and a stop close to 5450.

Short term trend            Target                   Reversal 

     Up                         5725/5750               5450

Medium term

 Down                          5300                     5950-70

Nifty update for 05-April-2013

Nifty futures broke the previous low which indicates a major break down on the downside for 5400-5450 levels.Though bank nifty did not break the previous low the major index broke the so called 200 dma and continuing the H&S break down. 5400 put(May) is still available at 50-55 and this can be the cheapest investment that can be made during this volatile time. All the mentioned stocks like LIC housing, Allahabad bank and JP gave decent returns in the previous bounce and it is wise not to make fresh buying positions as the bounce back is over. IT sector is showing some major weakness and stocks like TCS , Wipro and HCL tech are the weakest among the pack. TCS could retest 1400 soon and among the banking stocks like Axis bank would be aiming at 1150 levels in the current series.After the recent correction TATA motors is one stock which could bounce back from the lows and it is currently trading close to 61.8% retracement zone at 255 levels. The stock could correct upto 235-240 in the down trending market but it is always good to watch this stock on bounce backs. Volatility data is showing short build up at higher levels and at 20 points premium nifty cannot bottom out. It has to come in a discount with panic selling in midcap stocks and that is how we call a bottom has been formed.On the upside 5760-70 would be the ceiling for the month and it would be a tough task for nifty to break out on the upside