Global Update

Hi Guys,
              Lets look at a few of the asset classes apart from equities before looking at the Nifty Chart and see how they are faring currently. Looking at different asset classes is a good way of getting an alternate perspective into things.


GOLD CHART

Spot Gold Prices after having formed a double top near $1790 have fallen by almost 10% to its current level of $1620. Gold prices continue to remain below their 200 day EMA and are expected to remain weak going forward after being dubbed a "Dead Asset" by countries world over.

           



SILVER CHART

Silver prices continue to remain weak and have fallen nearly by 15% from 37$/ounce to 31$. Silver prices continued their range bound movement  below the 200day EMA which lies at 33$. The outlook remains weak till silver prices can sustain above those levels.

WTI CRUDE

WTI Crude prices after having seen a good upmove have fallen by 8% in the recent time to sub 102 levels. However the prices continue to remain above the 98$ mark wherein lies the 200 day EMA. One can expect Crude prices to remain firm till those levels are held. Any sustained trading below the 98$ mark may considerably weaken crude prices.

USD/ INR

USD/ INR after having tested its support zone at the 200day  EMA of 48.50 have rallied by almost 8% to 51 level.  USD/INR prices are expected to exhibit more upside going forward. This in a way spells trouble for the Indian Equity markets which may show weakness on the continuing show of strength by the$.

US Treasury (10 Year US Treasury Note Price)

US Treasury prices have largely remained range bound over the recent time and is currently resting at it's support level of 200 day SMA. Holding these levels, one can expect the yields to soften on the US 10 year  Treasury note.

A First look at  things will show you that practically all asset classes have witnessed some kind of selling whereas the $ has gained in strength in the past  few weeks. One should be cautious going forward as this can be taken as Money or Liquidity Distribution and may be a sign of a Global Asset SELL OFF. One should keep a keen eye on these going  forward.




In the meantime our sell call on Nifty stands. Nifty has respected the level of 5750 has not managed to breach it. Timewise, i expect the Nifty to be rangebound between 5000 and 5400 for some more time before making the decisive move downards towards our target of 4200.

As per the above chart our Stop loss stands at 5750. Nifty is currently moving in a channel with channel support and the Fibonacci arc support at 5000 levels. This is a shorter term view for the Nifty. The arrow depicts that the break of 5000 will lead us into the lower orbit  towards  4400 - 4500. As long as 4950 - 5000 holds we can expect the Nifty to not break down and oscillate between the 5000 - 5400 range. The longer term view of Nifty  however remains bearish with targets of 4200.

Nifty Update

Hey Guys....
 Posting after a long sabbatical due to time constraints. Will keep posting more frequently now. Lets get straight to the point and talk market. The main reason to come back and post is due to this all important and crucial juncture the Nifty is currently at. It's make or break time for Nifty.

I say it's MAKE and then BREAK (the chart says it all)  :) Let's see in brief why.....

Nifty is in it's most interesting and crucial phase at this moment and juncture. Nifty has rallied from 4500 levels straight to 5150 levels, turning alot of people bullish.

The above chart explains and shows that Nifty is at its most important cluster resistance of 5170 - 5180 and the trendline resistance it has been facing right from 6300 levels. (please note that this trendline resistance is even present on a weekly basis for the Nifty. That makes it twice more important and significant)

Although there has been a false breakout a couple of times from the trendline, everytime it has happened Nifty has seen a decent cut off. THIS TIME IT MAY BE DIFFERENT!!!
 (look at the FII figures. The pace and strength of cash numbers definitely suggests of a breakout)

So the question remains, will Nifty give a breakout from it's all important resistance or will it respect it's cluster resistance and start it's downward journey again???

Well, there are a few factors to be considered.
1. Nifty has rallied almost 700 points and is extremely overbought even on a weekly basis. So the rally can exhaust at current levels. However, considering the strength of the cash being pumped in by FII's, we may see a break of this trendline and resistance this time and target the 200 day MA and beyond towards it's next resistance of 5400 - 5500.
2. Concerns are looming and flashing everyone in the eyes of a possible Greece default which may cause tremors in the global equity markets. A rally before the outcome of the news may have set  the stage for a big fall and cut in the global markets. A conclusive outcome may only happen near 20th March, 2012 though when the time comes for Greece to repay it's bondholders.
3. India VIX and the CBOE VIX are trading at relatively low levels and are quite oversold, leaving little space for them to drop further and thus for the markets to rally
4. The $ has retraced its stupendous rise and appreciation against  the Rupee to 50. 49 - 49.20level is a strong support for the $ against the Rupee. The continuation of uptrend in the dollar will put pressure on the indian equity markets.
5. Nifty might possibly be retracing it's fall from 5750 levels and till it does not cross the previous top of 5750  convincingly, it is difficult to digest such a fuelled rally on no extraordinary positive news. Therefore, this may only be a retracement of the previous fall and not start of a new rally.

Nifty is setting the perfect stage to CRASH!!!

An early signal will be Nifty's break of 5100 (this level will rise to 5150 - 5160 level in the coming week) and it's inability to sustain the so called conquered level in the new Feb series. We may however, see Nifty going past 5200 and more towards the 80% retracement of 5450 - 5500 before any weakness creeps in. (I am considering the far end of the retracement at 80% after looking at the way  FII's have pumped in money. Therefore that way it remains a low risk - high reward trade)

MY VIEW : Short Nifty after it gives a false break out from this resistance and closes beyond the bullish indicator of 200day MA in it's previous resistance region of 5450 - 5500 and roughly 80% retracement level of the fall from 5750. Lowest risk-reward ratio if it reaches there

THE TRADE : Short Nifty March between 5450 - 5500 with sl of 5750 and target of 4200.

Risk : 300 points
Reward : 1200 points

Risk :  Reward ratio of  1:4

Nifty Update

Nifty Breaks its Last Support

Nifty has moved down decisively below its last support at 5300. The count has changed. Markets may not see 5900 for a long long time to come now. We will wait for an adequate bounce to short into the markets.

This is no longer a market to buy into. Markets have geared itself to make new lows. The way all blue chip stocks have been beaten down with high volumes suggests that we are already in a bear market.

Brace yourselves. We are in for a speedy ride down!!!

Nifty Update

BUY NIFTY

Nifty has broken its support of 5400 triggering our stop loss.

Though nifty has broken the 61.8% retracement levels of 5400 (which is not a very heartening sign), there is still some hope for the bulls. The last frontier for nifty remains at 5300. Any close below that level will really trigger some major selling and then we will be forced to induce a change in our counts.

Those holding longs can continue to do so with the sl at 5300 or one may re-initiate a buy here with the same sl.

My bias still remains positive even though i may be the only one left so. Last support is 5300.

Nifty Update

Nifty has been oscillating within a range of 200 points and reached the bottom end of the range today near 5450. As mentioned earlier 5400 remains a crucial support for the market and only a sustained closing below the same will alter the bullish set up. Our buy at 5500 stands and we remain positive on the market for the medium term for target of 5900+.  The risk to reward here is highly favourable and i would advise one to go long with an appropriate SL.

P.S: - (This however does not transalate into any bullishness for the long term as our extremely pessimistic view and long term target of new lows in the market remain firm. I will be coming up with an interesting article soon on why one should be bearish on equities as a continuation of our BIG BANG post).

Watch this space for more!!!

Nifty Update

NIFTY IN SUPPORT ZONE

The chart shows a clear uptrend followed by a correction till the support zones. A 20-50 moving average crossover has taken place. Only a move below the support levels of 5450-5400 will alter the bullish set up.

Profit Booking at 5750 helped us lock in our gains and nifty reached near our buy and support level of 5500. 5400-5500 continues to remain a strong support area for the market and we may now expect nifty to rally towards our previous target of 5900+ after having corrected by 250 points (50% retracement) from the profit booking level of 5750.

So the view remains positive and we re-enter our longs at 5500 levels with the stop loss of 5400.

Risk : 100points
Reward : 400 points

Nifty Update

Markets on a linear upmove!!! Up 400 points from our BUY.
Nifty has reached the resistance zone of 5750-5780. I would recommend one to book their profits at these levels and re-enter at lower levels as markets are extremely overbought at the current levels. Nifty has moved up vertically by almost 550 points from its low of 5195 and it would be prudent to book out profits at current levels even though we maintain our  target at 5900+. Part booking is an essential tool in trading and provides one with more ammunition to trade in the market. So book profits and look for buying opportunities near the support regions of 5450-5500  i.e. if that comes :) (a 50% retracement level for the entire upmove provided nifty halts below 5800)