Opening: Screaming Traders: Nifty 8305 (-67)

Greece prime minister resigning and weak PMI Chinese numbers have given our asian peers a red mark on D-Street. Nifty too is opening with the mark which would leave our traders with a Scream and shock. Overall Indian markets are not concerned with that global news but rather domestic concerns like GSTBIll/LandBill/Weaknening rupee/Monsoon deficit. So of the four two later ones are not in our hands while former two can be resolved and i guess it wont be done untill winter session. Technically, markets are expected to give a strong profit bookin with upside capped at 8650 while downside gates open to 7600. Nifty is no trade zone for intraday. AVOID INTRADAY for today. Nifty R-8425,8445 S-8310,8276

#195 Nifty update: "Double Toppings on Nifty"

We all get excited when we get double toppings on Icecream or Pizza but i guess after todays close bulls wont be happy with the ''Double topping of Bearish Engulfing pattern on Nifty's Weekly chart". On other side Bears would be happy of the toppings. Now time will say who can digest this double topping..Bears or Bulls...Volumes on Nifty had dried up as Americans where on Christmas and New year celebration holiday. Yesterday we saw a basket selling and people had two reasons in mind 1) Rumors that Manmohan Singh would resign today (but he didnt) 2) People in Europe and America were booking profit after High NAV recorded on Financial Book Closure on 31st dec. Whichever reason you choose technical had indicated on 13th Dec Weekly closing and we did post on Blog to be short. Bond Purchase has decreased by $10 Billion/month which could also squeeze out  some liquidity gradually from market over some time. High Inflation is persisting in India which could trigger a rate hike in next RBI policy. On other hand Auto Sales have decreased for major companies in Dec which may be due to Inauspicious days as per Hindu belief. IIP are still pitched at lower levels which is not cheering for our economy. Earning season is about to commence and we expect intact growth and not much of flourished profits as our rupee had been stable around 62 which wouldnt have bought much profits for IT and Pharma sector which are dependent on foreign income. So we expect some profit bookings by short term traders on Nifty but we cant measure the extent of profit booking on downside i.e., it could be deep or even consolidation. Only good thing going around in Indian economy is FDI reforms. FDI in railway could be a surprise for markets and good for Indian railways. Parliament even approved some of the investment such as TESCO and vodafone 100% hike in Indian unit. Linking some inter market analysis, Gold chart is showing some bullishness which is a sign of downside in equity though not directly correlated in short term but it could trigger some bearishness on stocks. Coming to technicals, if we consider a bull wave to end at 6415, than we can see some extreme downside as we mentioned on last nifty update post. But for short term we have again got a chance to Sell nifty with some stop loss. Nifty is taking strong support at 50 SMA at 6193 on daily chart. RSI has turned negative. So now it seems Daily chart is also supporting negative biasness seen at weekly chart since 13th dec.

Long Term Traders Strategy: We are intact with Short call initiated on last post with tgt of 5970/5750 and SL 6415

Short term Traders straegy: We recommend to go Short (CMP 6211) tgts 6072/5970/5895 SL: 6360


*Note all levels on nifty are Cash levels and trade at ur risk with careful study. We might have recommended this strategy to our clients and we dont have any personal position. My analysis is biased to technical analysis.

#194 Nifty Update: "Dark Cloud" covers Market and 430/688 points rain expected

Rain in winter is unusual but for the markets this COULD happen, so now carry a RAINCOAT i.e., put option to protect you portfolio for new 2-3 months. Last five session has been continuous downside and that was like a slow poison to traders as slide was a bit everyday. Looking at 'Weekly chart" after today's close i was shocked to see a strong negative candlestick pattern "Dark Cloud" cover. This pattern suggest a reversal to bullish trend and this time its more relevant as its at a "Clear top". Indian Economy hasnt improved as expected or as market has discounted. Yesterday IIP were worst than expected at -1.8% while inflation was at the peak at 11.42% (approx). RBI is expected to hike rate in upcoming monetary policy while FED is expected to start tapering of Bond buying which will squeeze some liquidity from the markets. One more reason to see some profit booking around the world and India is the financial year end for US which makes FII liquidate their investment to adjust Balance Sheet. But one good thing for me is that a new high was in December than rather November because History says if a new high is in november than we see a downside for a long term but this was not case for us this year. Earning results would be announced next month and i am expected a little hazzy profits as auto industry hasnt seen sales as expected in diwali festive. Now coming back to technicals, Weekly chart has surely given a negative candlestick pattern while indicators are also bending negative. Nifty took strong support at 5 Week EMA which is also a strong support was next week. On daily chart we may see some short covering as we have seen 5 straight down side. On monthly chart nifty is trading below the resistance line. For bulls in power this expiry should close above 6288. From the elliot wave point, this was end of Wave 1 from 4624-6415. Now we expect correction of 430 points minimum to maximum 688 points if nifty trade nxt week below 6145-6152.

Our Strategy: SHORT Blindly below 6152-6145 and Sale on Raise with SL of 6450.. Downside targets for next few months 5950/5750/5470