#207 Nifty Update: Ab ki Baar, Nifty ko Maar

Indian Cricket stadium has always been electrifying for IPL but this time whatsapp and social media are more electrifying with youth taking interest in Election starting tomorrow. All the media apps, atleast on my phone, are flooded with Ab Ki baar, Modi sarkar one liners and Funny quotes. But on markets for next few weeks it could be dangerous slides that is why 'Ab ki Baar, Nifty Ko Maar'. We have seen none stop electrifying run from 5933 to 6776 but now its time for some profit booking. In our last post i mentioned that 6780 is strong resistance and Nifty on Thursday resisted at 6777 which was just at the stop we mentioned. What made markets weak was bank license announcement which was just out of the box what traders expected. Two Finance company IDFC and Bandhan Finance were lucky enough to get the license. Many rejected applicants were dissappointed with the decision and why not as they were more financial sound than the approved applicants. This could bring some profit booking in the Finance space which had moved in anticipation of getting banking license. On global front, US payroll is increasing at a steady pace which could lead in cutting more stimulus as market seems to have been improving. Russia may enter recession if capital outflow continues due to political tension over Crimea. Coming back to Technicals, Nifty daily charts suggest a highly overbough markets. As we all could notice on the charts above it was in upward channel which could now be breached on Monday to give us steep downfall. It has closed below 5 day moving average for the first time in recent time to show biasness towards downside. Monday opening could hour would give a clear idea. If the opening of NIfty is below 6705 on Monday and if it even trades below that level for 5 points too than downside breached is confirmed. 

Our Recommended Strategy: We recommend traders to go short on nifty CMP: 6694 with tgts of 6586/6453/6350 SL: 6810 (closing basis)

Note: all levels are of Cash Nifty and we would recommend to book 20% profit at 6586 50% at 6453, 30% at 6350 to all are traders. Please rely on our recommendation after consulting your advisor and at your risk

#10 Article: Drifting Nifty

Nifty has been driving investors and analyst crazy in last months and in November it was drifting around the crucial turning points on the index.  We had advised to go long at 5833 on 29^th September or to say October issue. We recommended Hold with tgts of 6212/6370/6500 but we could only achieve 6212 and then we retraced from 6342 to hit a trailing SL at 6200 as we recommended in last issue. Safe traders got a 367points on our nifty call. On our blog we had seen some negative signs and initiated a short call for risk takers but the SL triggered the next day. Nifty is driving really crazy!!! What is making it so??

                Fundamental earning season has been better than expected on the Indian grounds but markets have not yet reacted in line with results. Sept IIP was below expectations at 2% and IIP august has been revised to 0.43% from 0.6%. But it was better on YoY or to say MoM basis. But the rising fear was of October CPI which has rose to two digits to 10.09%. Food inflation was the main reason for increased CPI.  So currently are economy is in confused state where one side we are noticing improvement in Industrial side while Inflation is at the peak. GDP which was announced yesterday after markets was at 4.8% better than last 4.4% but less than expected. RBI is also confused about economy and not sure about hiking rate.  Now markets are waiting for two things. Firstly, new banking license announcement. A new story has built up and was confirmed that TATA group has backed off from the fray to Banking sector. My eyes now are on Reliance Capital who is emerging as strong contender for the license. I would recommend going long on the stock from the view point of 2-3 years.  Secondly, people waiting are for the political results which are still difficult to predict. So gloomy picture of economy is now more biased towards bull after GDP data last evening and a strong breakout yesterday on Index. Looking at global markets they are at life time high. QE tapering is eyed by many analyst and I am also supporting the same view. As the report says Treasury yields are increasing in US and the thumb rule says stock index is inversely related to bond yields. Job data are improving in states. So now what we could expect is that FED would announce taper soon which would taken as profit booking on equity around the world. Even the financial end in stated next month could have profit taking effect.

                                Coming to Charts on Nifty, we could notice a Double bottom formation which has a neckline at 6212 on daily charts. On breakout of the pattern we could get target of around 6480. Indicators on daily charts are expecting a up move.  Nifty is well above 50/100/200 EMA. Index has been taking strong support at 100 EMA which is currently at 5960. On Friday it crossed above a resistance line making a complete U-Turn with a drift. Weekly indicators are negative but Elliot wave suggest a move of around 300 points from here while monthly chart suggest that a top is nearby with max up side around 6500. Taking all three time frames we are getting a strong smell of 6400-6500. Currently nifty is no trade zone of 6000-6200 for safe traders.

Our strategy: Risk takers go long on Nifty while safe traders go long above 6212 only, with tgt of 6450. SL comes at 6000 and trailing SL at 6100 once it crossed 6212. On downside SHORT ONLY BELOW 5950.

For short term traders view follow us on our blog http://Chartechnician.blogspot.com  ,on twitter @chartechnician and FB page www.facebook.com/mavjihari

Note: All the data and graph is as of 29 November 2013 closing

Disclaimer: I may have personal position in index and above mentioned stocks. Views and News mentioned above may have Errors and omissions. My views are biased more towards technical analysis. Please read and study the market carefully before investing on my idea. For any suggestion contact me on my email. Some words mentioned in article don’t mean their actual meaning. They are correlated for market.

#161 Nifty Update: Sign of Relief for the traders

A "Bullish Harami" pattern in term of candlestick is the turn around or can say reversal sign from a bearish trend. NSEL has been the talk of town since last week. Question still remains can it pay it dues?? Most of the traders or market people believe they will. PMI data of india has been weak but we can gauge our economy only on one data. Inflation has been zig zag while rupee depreciation is hurting the most to investor sentiments. But i feel that this could be the low of near term. Looking at chart, a short covering on nifty is due a high tym. Since my last few posts i have been mentioning to go long on each dip with sl of 5632 and this is the best price or can say least value for the stocks to buy. Technically we may face resistance near to 5760 levels were 100 and 200 EMA are situated but we are confident that if we see a turnaround thn this time a new high of 6400 is inevitable.

#6 Article: Markets at a glance

Nifty has still been trading in the downside channel. In last month issue I did mention that the market was in crucial range between 5855-6118 and could go either. Unfortunately it was on the downside. India was under-performing its western peers. Last month was full for global events which had some profit booking effects on all equity markets. But all the events have some long term good sign of economic recovery. Fed announced that it may stop easing money inflow to the markets as they believe a recovery in US economy is back on track. Consumer confidence number, retail sales number and Home sales number have been increasing significantly in the US while somewhat similar trend has been witnessed in Europe.  But Asia was little hazy last month with their economy and money market. Japan’s Nikkie was on lower circuits for couple of days as yen got stronger while Shanghai compositie also saw more than 5% cut for 2 days as People bank of China plan to squeeze liquidity in markets by making loan approval a stricter way. Overnight money market rates in China had shoot up to 6% when PBOC stated about squeezing liquidity. But overall US and Europe are sighting some recovery in the economy but yet not completely out of recession.

Coming to our market, most talked about last month was USD/INR. Our currency was at the life time low to around 61. No one could have even imagined that we could get to this low in just few months. On my blog http://Chartechnician.blogspot.com I had posted on 30^th October 2012 that we might see Rupee at 62.80 but most of them laughed off but now we are not much far from that level. We might now not see 62.80 ryt now  as RBI has stepped in to protect our economy. Gold import duty was hiked to restrict gold imports and save CAD (Current Account Deficit) but I feel we can save it easily by exporting more goods rather than restricting imports. Technically now as seen in the chart below we May see Rupee strengthening with tgts 59/57.30/55.75-56.20 before making a new low at 62.80. YES!! STILL IN LONGER TIME TGT OF 62.80 ON USD/INR IS INTACT.

Coming to our precious yellow metal, Gold, it still in a downtrend. As I had intimated on my blog on 29^th Jan 2013 that we need to short gold with minimum target of 25000 and we got that target. But looking at the monthly chart of the gold we may see some more downside. In dollar terms we have already seen some downside but in rupee term we may see downside in coming days for the reason I mentioned above that I am expecting our rupee to be strong which could bring down gold price. Last week Morgan Stanley has downgraded the gold targets to $1300 upto 2015. So now gold could not be a preferred investment asset with a medium term view of 3-5 years. Our strategy would be to short gold on every rise with SL of Rs. 28000

Coming to Nifty technical, it is still in a secular bull trend but we are experiencing some reaction within. But monthly chart is moving exactly as per the standard Elliot wave pattern. Now we have a strong support at 5678. 100EMA is 5844 and 200 EMA at 5757 which are crucial levels on nifty nearby.  You all should consider these levels to add longs as we might see some downside upto 5678 but now take that as the opportunity for long term investment. Strategy would be going long on Nifty at CMP and add longs on downside at 5757 and with strict SL of 5632

Note: All the data and graph is as of 28 June 2013 closing

Disclaimer: I may have personal position in index and above mentioned stocks. Views and News mentioned above may have Errors and omissions. My views are biased more towards technical analysis. Please read and study the market carefully before investing on my idea. For any suggestion contact me on my email. Some words mentioned in article don’t mean their actual meaning. They are correlated for market.

#152 Nifty Update: Channeling on Nifty witnessed

Nifty has been witnessed riding in the channel since last 2 months and today we saw low at that support line for 3rd time in same channel. 5750-5794 is the strong support range on the nifty charts as many technical points are clustering around the same level. Still i am not seeing much downside to gain if we short from current levels. So right now risk takers are advised to go long with sl of 5750 and safe traders are advised to take long position over 5883 with short term targets of 5960/6080

#5 Article: "Fragile-Handle with Care"

                          Tremendous performance by Nifty last month!!  Last Month issue i did mention to go long with targets of 6045/6150 on Nifty and we achieved it with no stoppage. But now nifty is packed up with a box and its delivered with sign "Fragile-handle with Care". Bank Nifty was surely the outperforming index as intimated in my last month issue. Now its time we may see some profit booking ahead. We might not see some vigorous downside but we may seem some range bound movement of nifty between the range of 5855-6350.
                     
                         RBI's rate cut anticipation was the reason for the nifty's start up run while rate cut on 3rd May bought more fuel to run up nifty chart. Even the inflation and WPI had improved in favour of the economy which got investors into much of confidence. But we are still not full recovered from crisis. Talking about global markets, they all are inching up at the life time high. US had jumped up on better employment numbers but a bloomberg issue mentioned that bureau of labour statistics in US had said that employment at real level hasnt inched up as suggested by numbers. Ofcourse number arent manipulated but they show only the educated class of labour where as the uneducated which accounts for major chunk of employment in US is not considered fully. Employment of lower class profiles has not picked up and many labors are facing problem for their living. So yet we cannot say that US markets have fully recovered from 2008 crisis though their financial market depict it. US companies have announced good set of numbers this quarter which was the strong base for the move along with numbers. Talking about Europe indices, they are urging up but their economies are at the state of double recession. Nothing have improved much in europe but they are driving themselves along with their western counterparts. Nor Industrial production nor employment have improved in Europe. China on other hand have halted imports of base metals as their are experiencing a slowdown. China's is facing problem of shadow loans (which is unregulated loans) which is accounting for almost 200% of GDP while regulated loans are just mere 30% of GDP. Due to strict formalities even  local government have relied upon shadow loans. If the slowdown continues than this could be another bubble like in that of US. Japan had also devalued their currency for the first time which was the only reason for upmove in the financial market index, where as fundamentally their economy has not recovered from Tsunami crisis. So we could conclude that fundamentally still all the economies need strong reason to be considered recovered.
 
                                                 Coming to technical's on Nifty chart,we have seen some bearish characteristics last week. After a rally upto 6230, we saw a Bearish engulfing pattern on weekly chart as seen on the attached graph. This pattern is considered to be bearish sign on the top and we were on the top when this occured on the chart. But taking into elliot wave, nifty has already retraced 38.2% from the top with respective to last third wave rally. It suggest consolidation phase on the chart. All the indicators are in no-man land suggesting the move either way. Secular trend is ofcourse bullish on monthly chart but daily and weekly are suggesting some profit booking with is in-line with fundamental view. That’s why I meant that nifty is fragile at the moment and could go long way but on either side. Our strategy on nifty would be wait and watch and take position on either side of range 5855-6118. I expect commodity stocks to outperform next month and my picks would be TaTa Steel, JSWSteel, Coal India and Ster.

Note: All the data and graph is as of 27^h May 2013 closing

Disclaimer: I may have personal position in index and above mentioned stocks. Views and News mentioned above may have Errors and omissions. My views are biased more towards technical analysis. Please read and study the market carefully before investing on my idea. For any suggestion contact me on my email. Some words mentioned in article don’t mean their actual meaning. They are correlated for market. 

#4 Article: Traders are betting on IPL players

Indian Premier League is the most trending topic, as of now, for discussion all over the social networking sites as well as social gatherings. Interesting to note that even stock market traders are talking about them but for them IPL is “Index Premier League”. Almost every day (for investors every month), they try to find which sector index is out performing NIFTY and they try to bet on the best stock from that index. 

Looking at the NIFTY’s track since my last month issue’s article for “V-share” magazine, it has been a dream run for the stock market. I had mentioned that India was struggling with politically instability but within that a turnaround in the form of lowered inflation and better IIP numbers brought some life to bulls. Banking sector analysts expecting a rate in next month’s bank policy as inflation has cooled off. Policy was to be announced on 3^rd May but financial sector has already shown their interest or biasness towards the possible rate cut. On 13^th april I did posted on my blog that banking sector will lead nifty and we noticed that it outperformed it with a return of 9.9% while NIFTY has returned 6.2% over the same period. This was  surely in anticipation for the rate cut but now markets need some other reason to move on.

Since expiry yesterday we saw some profit booking in banking stocks and nifty dropped down today with sweeping 44 points. Earnings season has started and many frontline scripts have announced their result but IT has been disappointing street. Last decade i.e., 2000-2010 was IT boom for the markets but I feel next decade it going to be banking decade for Indian market upto 2020. Reason?? We have seen that Internet or computers have reached almost each state and to be specific even few villages but Banks?? Yet to be reached villages. Private sector banks have started entering villages and that will be reflected on their balance sheets in coming years. 70% of the GDP constitutes of Agri products and we have seen government announcing subsides to farmers. But now recently they have agreed for special “Kishan Credit Card”, loans etc which all will be credited directly to end user i.e, farmers bank account. So primary need for all farmers is to have bank account and for this we need banks in villages. With this facility farmer would avail many other banking facilities which would benefit them as well as Banks balance sheet. For this simple economic reason I feel next decade is going to be banking dominated. 

Now as per Elliot wave bank nifty has a long term target of 21000 with leading private sector banks such as ICICI bank, Axis bank and HDFC bank, while on small banks we can bet on DENA Bank. Last time I mentioned that nifty was in no trade zone from 5400-5630 and bullish above 5630-5850. We have seen some strong bottoming out around 5600 and I hope traders and investor were long over that level. Herewith the attach graph is Nifty’s month chart and we could notice that it has strongly shown characteristics of perfect Elliot wave. In technical terms we are in 5^th Wave of the larger third wave of the super 3^rd wave of Grand 3^rd wave. I know terms are lil tricky but to say in simple terms we still are in secular bull market. Every dip is a buy for long term

Strategy on NIFTY: Nifty could see some profit booking now upto 5773 and max upto 5610 but take this as a buying opportunity rather than to short for those who missed it. I expect markets to say consolidated above 5770 but 5610-5655 should be respected. So buy on each dip before 3^rd may with short term targets of 6045/6150 on nifty with a medium term target of 6500.

Note: All the data and graph is as of 26^th April  2013 closing

Disclaimer: I may have personal position in index and above mentioned stocks. Views and News mentioned above may have Errors and omissions. My views are biased more towards technical analysis. Please read and study the market carefully before investing on my idea. For any suggestion contact me on my email. Some words mentioned in article don’t mean their actual meaning. They are correlated for market. 

#151 Nifty Update: Traders are up on the toes!!..5710-5734 achieved on Nifty

Reliance industries as well as TCS, two major giants, have announced their results in last 2 sessions and both were in line with the expectation. We might see some profit booking to continue on both the stocks as people are disappointed or rather do not expect companies in future. But as i have been mentioning since my last two posts that Banking sector will out perform the index and we saw that for 3rd consecutive trading session. Mid-Cap and Bank Nifty ended in +ve zone while nifty closed marginally on negative side. As i have mentioned yesterday that some cool-off in inflation and a marginal recovery in the IIP has changed the mood around the tables of brokers. On other side banking sector will announce results pretty soon starting with HDFCBANK in 2 days and its expected by many brokers that pvt. banking is expected to post results above expectations. Talking about utilities sector such as power and energy than they might post poor results but that will be good opportunity to buy for long terms as rate hike is expected by almost all state by this quarter so that will bring some cheers to power companies in next quarter result.

Coming to technicals yesterday i did mention nifty to resist near to 5710-5734 and today we saw profit booking exactly from the intraday high of 5732. BINGO!!!! So what next for short term traders ??? Technicially nifty should take support at 5663 (closing basis) while on intraday basis 5610 may act as a strong bounce back point. So if you have exited in the range of 5710-5734, its tym to enter back at CMP to every dip to 5610...Keep a positional stop loss of 5550 with targets of 5850 upto 6150-6170 

#3 Article: When on a tip of the Ice-Berg......

                         Just Imagine yourself on the tip of the Ice-Berg!! When you look down you will feel that ice-berg ends at the water-level but the basics says the height inside the water is more than above water. Nifty traders are exactly standing at the tip of the iceberg. Today we saw nifty closing below 200 EMA for second consecutive day which is weakening the bull run. Political surprise + Cyprus banking freeze has made nifty chart take a u-turn. Three Charts above are of three different markets which are inter-related. Top left is USDINR, Top right is GOVT 10 YR BOND Yield and down center is NIFTY Chart. Bond Yield and USDINR are inversely related to Nifty.. But Nifty may lag in reacting to bond yield. Or you may say that bond chart shows the signal early. Now check out the yellow line on bond chart, it made a top at 7.96% on 4th Feb and it has closed at the same level today which is acting as a resistance. But now we see a rise in yield from monday or next week than that the sign that Nifty may seem downfall. Now taking USDINR chart, it has also the same implications. USDINR has been in the symmetrical triangle formation which could breakout on either side but indicators suggest this time it will break 55.40 which has acted as support thrice but before that 54.95 is a small breakout on the way. Now weakening rupee is another indicator adding to the weakness to Nifty chart.

                       Coming to our Nifty chart we have seen two things breaking at the same level. First, a trendline as seen on the chart and Secondly, 200 EMA (Not plotted) at 5672. So technically we have got some weakness in the markets. On my Last article 3..2...1..Go!! i mentioned that 5630-5690 is strong support and we did see 300 points rally from that point but than Political instability came as the shock to the country. All the technical and fundamental analyst were made to think other way round and now it seems gates have opened for 5447. In my article i did mentioned that below the support range of 5630-5692 we may see the level of 5447 and now chart has shown signs that IT MAY move towards that level. To support my view, we even have a unfilled gap at 5447 which could be the support to be filled up.
                     
                      Next week is gonna be important for our markets as Cyprus case would have a final resolution plus financial year ending and top of it holidays in trading session. All the three market moves on next week should be closely watched to predict the future of our market.

Strategy: As i had mentioned in my last article on 25th Feb that 5400-5630 is no trade zone for the long term investors. Yes ofcourse that could be the low but you never know as i said that iceberg could be more dangerous than it seems, so its better we sit quite. 5560 is a small but important hurdle that may act as a key reversal point after 5630 but before 5447. So now add longs only above 5850 or else just hold your position. To hedge you porfolio Buy 5500 PUT Option of MAY expiry at 68. So right now we are in no trade zone. If we see political stability than we may see new high in month of May.