Nifty update for 03-07 June 2013

Nifty has finally confirmed the top of 6120-30 levels and is moving down to immediate target of 5880-5940 zone. It is logical to assume a bounce back between these levels because of the multiple support zones. Options data is telling as a range of 5700-5800 but it can be reached after a substantial bounce back to 6050-6060 zone.If you see the institutional data we could see that they have started selling index futures and buying stock futures. The large cap space still held its head up by not reacting to the negative sentiment in nifty. Thus for traders it would be a little bit confusing  whether to take a short position or not. Options traders have to be careful while reading the volatility index too as they might end in buying expensive options contracts. If you see the pattern in nifty the hourly chart we could see a symmetrical triangle pattern with the lower end lying close to 5970 levels and a flag pattern with the lower end lying close to 5870 levels.The width of these patterns are larger compared to the normal ones and it could help nifty to bounce back from these levels.I would not be surprised to see dollar close to 59+ levels in its final leg of up move. These bounce backs can be justified just because of lack of time for a distribution pattern but if we see the options data we could see the maximum build up was at 6100 CE along with the build in 6200 and 6300 strikes on the expiry day. It is telling us that going ahead 6100 would be a stiff resistance and it would be a sell on rise market with a downside target close to 5940-5870 levels.Traders need to wait for a major break down as it needs decent distribution pattern which has not happened yet.

Nifty update for 30-May-2013

Nifty is done with 6100 level on the upside and it is trying to conquer 6125 levels but failing every time. We could see advance/decline ratio in favor of declining counters but the huge discount in nifty futures presents a worrisome picture for short sellers. If we analyse the stock specific data we could see that some of the banking stocks are close to the support zones or breaking down.Axis bank is one such which has broken down from the support zone of 1440 and the stock can move to 1360-70 levels if nifty is not offering any support.It is wise to trail the stop losses in nifty close to 6050 than creating a new long position. If we check the options data maximum build up can be seen in 6300& 6400 call options and 5800 put options. The range seems to be a little wide this time and it seems to be a consolidation month than giving wild movements.Most of the large cap banking names have already gone through a correction phase but nifty is not reacting to this by closing above 6100.Though some of the stocks are in the negative territory index has not come to a selling mode till now and it is clearly telling us that nifty is not taking the negative sentiment in the broader market and moving alone.The volumes are less and lesser premium is showing the lack of demand and instead of buying one just needs to trail the stop loss and move with the market

Nifty update for 27-28 May 2013

Nifty continues to get decent support close to 5970 and it is expected to trade higher till 6100 with a reversal below 5930. The recent high of 6230 levels can be an interim top and i would like to update my medium term target of 6350 to 6230 levels. Nifty needs decent consolidation close to 5860-5930 to to break into new highs in the coming months. The bullish momentum can continue for some more time as the nifty futures is still trading in a discount and i have mentioned this fact a number of times in the blog.As the volatility index is at a higher level and the index futures is trading at a discount it is difficult to go with the bears. Long term investment call of Lupin has already done with the target of 800+ and i would like to shuffle the stock with Ranbaxy at this juncture.(29 april 2013 post) Weekly charts are saying that the stock is close to a good support zone and we could see smart money coming into this stock close to these levels. I would like to buy the stock in small quantity with a stop close to 380. It is always wise to test a bottom by buying some and not in bulk. TATA steel is another stock which is worth mentioning and both these stocks could give 10% return from current levels. I would like to hold onto Indus ind bank as a portfolio bet for 600+ and remaining ones as trading bets. Bank nifty is another factor which is in favor of a quick bounce in nifty as it could retest 13000-13050 levels once more and a rounding bottom formation in the hourly chart of nifty and bank nifty is suggesting that. Options data is suggesting 5900-6100 as a broader range for nifty in the coming weeks

Nifty update for 13 - 20 may 2013

Nifty has crossed the reversal point above 6000 and is expected to touch 6350 in the coming months with a strong support zone close to 5860-5900 levels. At this juncture we have to be cautious on stocks and I would like to stick with only two mentioned stocks like Lupin and Indus ind bank (see the previous post). If we see the derivatives data nifty futures is trading with a marginal premium and that cannot confirm a top in the short term. Volatility index is trading with a positive bias indicating retailers are going short in the market but their stop losses are being taken out. Stock specific data is telling us that there are lots of stocks yet to participate in the market rally especially from the metal space and PSU banking space. Thus we should watch out for the moves in derivatives data at this juncture than stock specific ones. Options data is suggesting 5900 as a strong support zone and technically too this can be a decent support zone. I would not like to place a top at 6100 levels unless and until the premium reaches close to 30-35 points. Turnover data is also suggesting low volumes on down trending days and that shows the intensity of real selling in the market. This is a market to initiate positional trades near the support zones and stay with it until 5850 is taken out. Thus it is better to get out of private banking space except indusind bank and enter long in the PSU banking space.