Nifty update for 27-June-2013

Nifty is consolidating between 5500-5640 and it is expected to trade till 5750-5800 with a reversal below 5490. As of now it is giving lot many whipsaws and traders might find it difficult t trade these levels and this is happening mainly because of the volatility index and movement in dollar.As these movements are happening due to external factors there is no change in the bullish view in the short term. Dollar/INR has reached 61 and it is fair to believe that it is the final leg of this bull market in dollar and the heavy premium in the futures contracts is telling that.Volatility index gave a negative close and we could see July futures trading at par with the spot nifty and the interpretation can be traders have squared of some their long positions and i could not see any fresh short build up as of now. The world markets are at important support levels , let it be CAC , DAX , FTSE and Hongkong and it is wise to have some buying positions than initiating short positions at this level. The IV's of many options are at its peak but 5800 July would be a decent option at this stage as we can buy the risk only at a cost of Rs.40-50. If we compare the stocks YES bank and HDFC ltd are giving good trading opportunities. YES bank is a long above 460 and it can happen today or tomorrow and the stop is placed at 445 , expect a target of 490. HDFC is a buy on dips stock , stop is at 795 expecting a target of 840-845 in the coming days. As i had already stated we should consider it only as a bounce back to 5750-5800 levels as the world markets seem to have topped out. India VIX at 21+ levels would medium term traders very good trading opportunities for higher targets and i expect nifty has completed a 5 wave pattern on the downside , price and time wise. 

Nifty update for June-25-2013

Nifty followed what bank nifty was telling and that was major thing mentioned in my previous post. I did expect a bounce but only with the help of bank nifty and it broke below the crucial 11600 levels and went for a correction.The index has been sliding in a perfect 5 wave pattern according to the Elliot wave theory and it would be completing the 5th wave soon. India VIX is near to to its 2 year's high and all is well to expect a perfect bounce to 5700-5750 zone. In the June series 5700 can be the ceiling but if there is a bounce it could extend to beyond 5700 levels(in July series) too. I was mentioning about the distribution pattern in S&P below 1600 levels and it has given a correction of close to 50 points below that. Nifty has been giving lower top lower bottom formation in the daily charts and is expected to trade till 5200 in the coming months.On the downside we could see good addition of 5500 puts ahead of expiry and i dont see nifty breaking 5500-5700 range in the current expiry. I would like to go long on stocks like ICICI bank (stop at 1022) , Indus ind bank (stop at 440). It is better not to buy options as we could see lot of extra premium as the volatility has shot up. Nifty is trading at a discount and it would be a favorable condition for covered call writers to buy nifty futures with writing at the money call at the same time(for expert options traders).TCS would be another interesting stock at this juncture and it is getting resisted close to 1435-30 zone in the recent time. It would be a major break out for the stock on the upside above this zone. In the longer term charts we could see nifty breaking 5500 and coming down all the way to 5200 levels and S&P to 1470 levels. In a bull market all the indices would give a leading indication of moving up and many stocks hit new highs and the indian equity market is doing just the opposite.Thus the longer term picture is dull for equity investors and buy a pull back with a view of trading purpose.

Nifty update for 17- 21 June 2013

                                         

Nifty has retraced till 78.6% of the entire rally and is expected to trade till 6000 - 6030 with a reversal below 5640 "BUT". Lets talk about the IF's and BUT's in this scenario.Bank nifty should give a leading signal for any decent reversals which has not happened yet as both nifty and the banking index are moving almost with the same momentum. If we observe the charts of other indices including the small cap and midcap we could see they are making lower tops and in a good bull market all the other indices follow nifty and it has not happened yet. The small cap index has even broken 52 week low and it gives a negative picture regarding the market. In the short term the retracement was good enough on the downside and nifty is trying to make 5500-5600 as the floor for some time but it is ready to break  11600 in bank nifty. If we see the chart of nifty we could see lot many trend lines can be drawn to offer the so called 'support', but the chart of bank nifty gives only a level of  11600 to break the bullish pattern of higher top and higher bottom.Now coming to the US market S&P is finding decent buying interest at 1590-1600 zone but it is all set to break below these levels and as a trader who watches the global markets closely one should be aware of this danger and below 1590 -1600 can be considered as a break down point. Despite the heavy fall in dollar index dollar/inr futures could touch 59+ levels and it also gives a word of caution in the near term. I had mentioned a few stocks in my previous posts and those were JP associates and SBI. L&T is also driven by momentum and it can go to greater highs to 1530+ where the higher end of bollinger bands are placed. As long as there is no consolidation there is enough reason to consider the rally as just a pull back and we should see some consolidation before stating it as a bull market in the short term.

Nifty update for 11-June-2013

Nifty broke the previous low and it could be heading towards 5770-5800 where the 61.8% retracement of the whole rally from 5500 levels.As i said in the previous post about nifty i would not be selling nifty below the lows of 5850-70 and would be waiting for a buying opportunity.Among the bigger names start with JP where where close to 62 would be a decent buying opportunity for this high beta name and
wait for other stocks to consolidate. I would expect a stock like BHEL to find a double bottom close to 175 zone and it is worth trying to  buy this stock close the the previous bottom as the retest is happening after a long time.It is better to search for those stocks which are finding a bottom when nifty is at 5800 levels. If we see the largecap banking space SBI is approaching the previous bottom of 1950 which can offer a decent bounce back, reliance is yet to reach 760-770 levels.Volatility index is showing the fear of traders by hitting  new highs with the rise in dollar.I would say this is a positive factor for nifty as spike in the volatility index is a little too much  for the market at this stage. We could see 5800 put building maximum number of positions and 5900 call was adding lot of positions in todays  session too.Nifty is following a bullish technical pattern of ending diagonal which would not give a consolidation stage and would instead give a V shape recovery from the downside.Thus wait for nifty to stop falling and let the mentioned stocks reach the respective support zones  with a discount in nifty futures and that would be the best time to go long.

Dollar move to 58 zone as predicted on 03 - March - 2013

Dollar has finally surpassed the previous high of 57.30 and it is trading higher close to 58 zone. I had written a something about the upward momentum in dollar 3rd March 2013(search dollar in the blog , u'll get it!!!)The bullish stand in dollar is justified by the movement in dollar index too. If we observe the dollar index we could see that Dollar/INR was rising when the dollar index was not rising and the correction in dollar index seems to be over and it would give a long term bullish view for dollar. It can be in the last leg of up move to 59+ as the dollar index can move up after the current correction. Thus in this move dollar index too would offer the support for dollar and it can be dangerous for who are short in dollar. It gives a dirty picture of the Indian economy along with the rise in crude oil prices and the equity market investors should be a little bit cautious at this juncture

Nifty update for 06-07 June 2013

Nifty is somehow holding the lower end of our downside target of 5880 as per the technical charts. As per the options data we have a downside base at 5800 put strike. Thus if we combine both these data i would square of my short positions anywhere below 5900 and wait for a buying opportunity. As a trader i might lose a trading opportunity if nifty slides to 5800 levels but i am ready for that opportunity loss. We could see world markets giving negative close for the past two weeks but nifty is holding 5900 levels and most of the stocks are close to their support zone or we can say there is nothing to sell in this market.Axis bank is the only disappointing stock in the large cap list and all others and holding their support zones.One interesting stock at this juncture would be CESC as it is about to give a breakout on the daily and weekly charts . I would like to buy some above 337 and it is a good break out above 345 levels. Thus it is a good portfolio bet for 450+ in a year and would like to place a stop below 307. Cipla is another stock which is a decent portfolio bet close to 360-370 as it is a strong support zone and a previous breakout zone.

Nifty update for 05-June-2013

Nifty gave a smart bounce close to 6000 bounce failed to retain the momentum and ended at the lower end of the range at 5930. If we look at the options table we could see significant addition of 5900 calls and as i mentioned in the first day of the series we could still see huge build up at 5800 strike.On the calls side 6100 strike has seen the maximum build up. The technical charts are still showing the same old head and shoulders break down and the targets would be much lower to 5750 levels but the width of the pattern is really creating some doubts in me regarding the downside targets. As mentioned in the previous posts there would be a little more downside left in the large cap names like SBI, Reliance, JP etc and we should wait patiently for these stocks too to bottom out so that nifty could see a reversal. It would be important to watch the addition in 5900 call on 05th June so that we would come to know the depth of the cut and as of now i would not expect nifty to break below 5800 in the short term.Volatility index is still trading with a little positive bias as we could not see much positive move today and it is indicating that the fall in the final hours would be due to long liquidation than short build up. The premium has not come down and the indication is that futures trades are betting on long side but with the intention to average it out on the downside.Nifty is at the 40 day moving average which is considered to be a crucial support zone and it is yet to wait and watch whether it could hold this zone on the downside. A break below the 40 day moving average can easily lead to 100 points cut in nifty.

Nifty update for 04-June-2013

Nifty made a low of 5925 and gave a sharp bounce to 5960 levels. As said in the previous post it is wise to square off the first set of short positions close to 5880-5940 levels and wait for a bounce to 6000-6030 levels for further trades. We might be listening to many voices related to the head and shoulders break down in nifty and one should be watchful regarding the relevance of the break down only after relating it with the performance of the large cap stocks and options data. As per options table the base still lies at 5800 strike and all the higher strike calls of 6100,6200 have been written heavily. Thus as of now it is wise to expect a rebound due to the activity in 6000 puts. The volatility index is close to the recent highs and the bounce back from 5925 was with decent premium. It indicates traders are busy creating long positions close to 5900 levels. The H&S pattern in nifty can be a failure pattern because of the width of the pattern as it is comparatively small. The levels of 5925 is eventually going to break but if it is after a bounce it would be a good distribution pattern and a wave 3 on the downside. If we see the stocks there are some stocks which are waiting for a rebound and i would first go with the ones like Federal bank and Auro pharma. Stocks like Reliance, SBI, L&T, JP associates are close to the support zones but wait for some more downside in these stocks to be a buyer. Among the private banking space Axis bank and ICICI bank are close to their 40 day moving average which is a positive factor for these stocks. 62-64 would be a decent price to add JP to the trading portfolio and as it is a high beta stock the returns would be pretty good. Re/dollar might fight some profit booking sessions close to the previous high of 57.30 but the trend is still intact. As of now we could see nifty in a range of 5920-6010 with 5920 as a crucial support zone for the month of June