Wednesday, August 10, 2011


my last view on nifty stood wrong and again i must admit as i always do, Market always reacts faster than anything…

We saw a huge correction in “DOW JONES” on last Wednesday ahead of the news S&P downgraded U.S. debt from AAA to AA+ and is keeping it on a negative credit watch. This is a bit surprising if only because some European countries who are in worse shape than the U.S. (and without the ability to print their own money) now have a better credit rating. What this will mean for Monday is anyone's guess. People are guessing everything from a market crash to a rally (thinking it's already been priced in). One thing is for certain, this week will likely to be a volatile week.
Technical studies…
The first week of Aug had been quite disappointing for the global market so the “Indian stock market”. We witnessed huge sell off pressure from all the global giants like DOW, FTSE, SHANGHAI, S&P 500 etc. Quite interesting thing to notice is, in most of the indices there is a “head & shoulder” pattern break down (except a few one) though they are not so far from their target we believe. Which  indicates a short term bearish trend is going to resume.
Nifty…
This week is going to be very crucial for NIFTY as it closed last week on a very weaker note we believe, but most of the nifty-50 scripts specially Banking, FMCG, Pharma, Telecom, Auto shares (except tata motors) did not make new low despite of the fact that NIFTY made a 52 week low (on intra day basis it breached its low of 5177 made in the month of Feb’ 2011) but at the end of the day some how it managed to close above that level. But still it is the lowest ever weekly closing in this year so implication is “NIFTY bears are quite aggressive over bulls” Then which are the sectors took nifty down? Those are mainly Metals, IT and partly Oil & Gas mainly Reliance, we were always been bearish in Metal & IT pack and ultimately it came true. And we believe there is much more down side still left in these counters, specially in IT scripts they have just got into a corrective mode we believe, so stay away.

As we can see there is a triangle pattern break down in NIFTY at 5280 level. And the target comes around 4300-4500 level which is disastrous from every perspective. But the pattern breakdown  confirmation only comes if we get a weekly closing below 5170 level (monthly closing is most preferred), in that case the immediate down side target is 4800-4900 level where its 38% Fibonacci retracement level stands coupled with 200 weekly EMA.


And coincidently the target of head & shoulder pattern break down also finds the immediate destination of 4900 level and this has triggered the lower top lower bottom formation for nifty after March 2009.
Though NIFTY looks to be extremely over sold in short term and a technical bounce back might take it to the 5300-5400 level which will act as the major resistance for the NIFTY in coming days.
So investors are advised to stop finding buying opportunities in such market condition, strategy should be wait and watch. And traders… try short the market on every possible technical bounce back  keeping in mind 5300 to 5400 level shall act as the major resistance for the time being.
                               





Tuesday, July 26, 2011

 Yesterday's 50 bps hike in repo rate and reverse repo rate dampen the market centiment hugely but what i believe it is nothing but short term phenomenon and beneficial for indian mkt if i look into the broder pic. Looking at the over all macro economic scenario specially currency USD/INR (in a typical down trend)  is sparking some bullish indications for our mkt (hike in repo rate leads to hike in int rate- leads to increse in demand  of int asset class leads to appreaciation of Indian Rupee and ultimately USD/INR will get devaluated as it is happening now,,,,,,,) so in my view (from technicals) any deep in nifty around 5510-5520 lvl should be considered as a good entry lvl specially,,,,, go for banking, pharma, engineering, realty etc.



                                             

Monday, July 11, 2011

Trend Wind for 11-15 july '2011

"(SPOT) NIFTY" trend wind
Last week nifty failed to close above its downward trend line that stands at around 5720 level, so in days ahead nifty will face short term resistance at 5720-5750 lvl. However its strong support stands at 5550-5580 lvl which I believe would appear as the base for nifty for this week. Hence my trading strategy would be “buy on dips” specially banking , realty, auto, fmcg  and  pharma stocks.

"USD/INR" trend wind
 USD/INR closed at 44.30 level last week, from technical point of view which is a sign of further weakness in USD/INR I believe. USD/INR will remain weak below 44.60 level and it can retest 44.10 and 43.90 level in coming days,  which ultimately will act as the major bullish trigger for indian equity market. However any closing above 44.60 may take USD/INR towards 45 level.