Analysing the (Great) Indian Stock Markets

Nifty Long term Picture

2011-11-10T10:16:00.000Z

Apologies for the long silence - but there wasn't much to report as I had already disclosed my long term bias in my last post and the markets took their sweet time in doing the target. The lower target for the range -5400 has been achieved - (well, almost - as the high was 5399.7), and Nifty took resistance at that level as well - Going forward - if we can manage two consecutive non-inside day closes above 5405 then I would consider that as a sign of major strength - but till then it is likely to be a tussle between bulls and bears. Important levels to look out for as support are 5170, 5065 and 4935.

It is possible that 5400 would turn out to be a major high which will become difficult to take out but its too soon to say anything definitive - my gut instinct is that we will test it again. There are long term patterns (very long term actually) active on both the upside and downside, Therefore in the larger picture - if we see 5700ish in Nifty then that should be an excellent selling area - and I'll write more about buying zone when we get closer to that area - as it's quite far from where we are at the moment.

Meanwhile, be careful - these are choppy markets and there is no dearth of bull traps and bear traps in such markets. All the best.

The comments and posts published in this blog are NOT trading recommendations. They can not be considered as trading calls or advices. If you decide to use the information offered here for your real trading, it is at your own risk.

Nifty Trend

2011-09-09T16:57:00.000Z

Nifty bounced back from our support region (although it did go a bit lower than that) nicely. What can we expect going fwd? Although my longer term target of 5400-5600 is still valid - but obviously we are not going to do that in a straight line. Also, the global markets have not been helping - there has been a huge headwind blocking the progress of equities in the last few weeks - still Nifty has managed a pretty decent return.

Here's a trend chart (uploading a chart after a long time) - which can be helpful in picking out entries and exits. We have taken resistance at the top end of the channel - and depending on how Europe and US equities trade, we can expect support around lower areas of channel. From a strictly trend following perspective - we are in a bearish area - however the area near 4800 has lots of support as well - so expect a game of tug of war between buyers and sellers.

Nifty Trend Chart

The comments and posts published in this blog are NOT trading recommendations. They can not be considered as trading calls or advices. If you decide to use the information offered here for your real trading, it is at your own risk.

NIFTY NEAR BIG SUPPORT

2011-08-19T05:55:00.000Z

NIFTY has a big support near 4790 - with potential to jump back to 5400 - 5600 area.

All the best for your trading.

The comments and posts published in this blog are NOT trading recommendations. They can not be considered as trading calls or advices. If you decide to use the information offered here for your real trading, it is at your own risk.

Today's Chart - Hindalco

2011-04-11T13:46:00.000Z

HINDALCO Support Resistance FibonacciPlus Charts

HINDALCO Momentum Chart

HINDALCO Resistance + Levels Chart

HINDALCO Support + Levels Chart

An explanation of FibonacciPlus Charts is given here and here in previous posts.

The comments and posts published in this blog are NOT trading recommendations. They can not be considered as trading calls or advices. If you decide to use the information offered here for your real trading, it is at your own risk.

Today's Chart - Hero Honda

2011-04-08T13:41:00.000Z

Hero Honda Support Resistance FibonacciPlus Charts

Hero Honda Momentum Chart

Hero Honda Resistance + Levels Chart

Hero Honda Support + Levels Chart

Today's Chart - HDFC Bank

2011-04-07T14:58:00.000Z

HDFC Support Resistance FibonacciPlus Charts

HDFC Bank Momentum Chart

HDFC Bank Resistance + Levels Chart

HDFC Bank Support + Levels Chart

Today's Chart - HDFC

2011-04-06T17:21:00.000Z

HDFC Support Resistance FibonacciPlus Chart

HDFC Momentum Chart

HDFC Resistance + Levels Chart

HDFC Support + Levels Chart

Today's Chart - HCLTECH

2011-04-04T14:03:00.000Z

HCLTECH Support Resistance FibonacciPlus Chart

HCLTECH Support + Levels Chart

HCLTECH Resistance + Levels Chart

HCLTECH Momentum Chart

Nifty Outlook

2011-04-03T18:58:00.000Z

Sensex and Nifty have been quite bullish in the last few sessions - Sensex broke an important level at 18860 without too much trouble. The momentum charts have turned pretty bullish - as can be seen from the charts I have attached below. The previous significant high of Nifty at 6178 was a 76.4 retracement level. Therefore the next level to watch-out should be the 76.4 of the whole move down - now coming at 6064.

Today's Chart - GAIL

2011-04-03T18:23:00.001Z

GAIL Support Resistance FibonacciPlus Chart

GAIL Resistance + Levels Chart

GAIL Support + Levels Chart

Today's Chart - Dr Reddy

2011-03-24T17:30:00.000Z

DR REDDY Support Resistance FibonacciPlus Chart

Dr Reddy Resistance + Levels Chart

Dr Reddy Support + Levels Chart

Today's Chart - DLF

2011-03-23T18:45:00.000Z

DLF Support Resistance FibonacciPlus Chart

DLF Resistance + Levels Chart

DLF Support + Levels Chart

Today's Chart - CIPLA

2011-03-21T15:10:00.000Z

CIPLA Support Resistance FibonacciPlus Chart

Cipla Support + Levels Chart

Cipla Resistance + Levels Chart

Today's Chart - Cairn Energy

2011-03-18T14:51:00.000Z

CAIRN Support Resistance FibonacciPlus Chart

CAIRN Resistance + Levels Chart

CAIRN Support + Levels Chart

Today's Chart - BPCL

2011-03-16T14:28:00.000Z

BPCL Support Resistance FibonacciPlus Chart

BPCL Support + Levels Chart

BPCL Resistance + Levels Chart

An explanation of FibonacciPlus Charts is given here and here in previous posts.

Today's Chart - Bhel

2011-03-15T12:15:00.000Z

Today's Chart - BHEL

Bhel Support Chart

Bhel Resistance Chart

Today's Chart - Bajaj Auto

2011-03-14T15:48:00.000Z

Bajaj Auto Support and Resistance Charts (EOD):

Bajaj Auto Support Chart

Bajaj Auto Resistance Chart

Nifty Support & Resistance Charts

2011-03-13T14:50:00.000Z

Nifty Support and Resistance level Charts (End-of-Day) as per the current formations in the markets:

Nifty Support Chart

Nifty Resistance Chart

Today's Chart - Axis Bank

2011-03-11T16:05:00.001Z

Today's chart is Axis Bank. Just a little word about Red and Green lines on charts - these lines should ideally be used to get in on the trend - thus Green lines give you the best places (hopefully!) to get long during a confirmed up-trend and Red lines give you spots to get short during a confirmed bear trend. An alternative use of these lines is to use them for contra-trend entries - but obviously this is a much riskier approach and is suitable only for very short term traders - perhaps using such levels to get in and out of intra-day trades. As you might have noticed - these lines are not designed to tell you whether the trend is up or down (although there are a couple of helpful pointers) - The main trend is up to you to determine from other methods. I use a combination of methods - very short term RSI combined with longer term RSI or break of significant price levels.

Today's Chart - Ambuja Cement

2011-03-10T18:17:00.000Z

Ambuja Cement Support Resistance Fibonacci Charts:

New Chart Series

2011-03-09T17:50:00.000Z

I have been working on a Fibonacci based charting method - wherein the algorithm tries to pick up support and resistance levels based on a pre-defined criterion (not going to be disclosed - so please don't ask). I will be sharing some charts for some heavily traded stocks on Indian markets. There are two things that put the algorithm off-track - one of them is dividends and another is splits. I'll try wherever possible to adjust the charts for splits - but I am not going to be able to adjust for dividends - given the sheer volume involved. Understandably - my inability to adjust the charts for dividends takes away a bit from the accuracy of the levels - but overall I have found these charts to be very useful. Hopefully, all of you'll benefit as well.

For every script there will be two charts - One based on Bullish formations and the Second based on Bearish formations. I could have combined the two charts into one - but that makes it very confusing to look at - so I'll stick to two charts for each script. I have my one methods of looking at when a particular level is useful for trading purposes - but that's a fairly long explanation and I'll leave that for another post perhaps.

I do not wish to pick and choose charts which look good - so I'll be posting charts periodically starting in alphabetical order, regardless of whether the levels have worked in the past or not . So, here's the first chart of the series - ACC.

Net Oil Balance as % of GDP

2011-03-02T12:01:00.001Z

Found an interesting chart from Citi Investment research showing net oil balance as % of GDP. If Oil prices spike up due to ongoing geo-political events - you'd know which countries would be hit the most- India seems to be one of the more vulnerable countries.

Oil Vs Equities

2011-02-25T07:29:00.000Z

Interesting chart on relationship between oil price change and previous recessions.

Long term view:

2011-02-24T14:48:00.000Z

Couple of charts to begin with:

Sensex Daily with Support and Resistance

Dow Jones Industrials Weekly - Fibonacci Retracement Levels

First chart is Sensex EOD. The levels show my preferences for long term support and resistance levels. Sensex has been under a bit of grey weather lately - I do expect the slide to extend - however I expect it to be volatile for the equities over the coming few months. The green region at the bottom is my preference for a strong long term support area (15666 to 15080) - which should be held by Sensex - in case of a strong bounce - 18860 area is my preferred place to attempt a short.

The second chart is Dow Jones Industrials weeklies - I have been reading some stuff from a major investment bank's technical analysis team about the possibility of 76.4 retracement acting as a temporary top - so here it is - we hit it last week - and some strong selling has come in after that.

2010-10-04T05:11:00.002Z

Travelling for next 3 weeks - so irregular updates at best. At the time of writing - Nifty has touched the target of 6220.. let's see how it closes today..

The comments and posts published in this blog are NOT trading recommendations. They can not be considered as trading calls or advices. If you decide to use the information offered here for your real trading, it is at your own risk.

Nifty Weekly Analysis

2010-09-26T20:07:00.000Z

What a performance from Indian markets!! My sympathies for anyone who has been caught short in such an explosive move upwards - especially with the markets not even pausing properly to catch their breath! Moves like this typically tend to turn extremely volatile before settling down a bit - so I wont recommend trading these markets with small stops for the time being. When in doubt - stand aside and let the markets do their stuff. Improbable as it may sound - my next big level for Nifty on EOD charts is around 6230-6240 range. There are supports all over the place - however - the first couple of big EOD supports are at 5920 and 5720.

Nifty Weekly Analysis

2010-09-19T18:01:00.000Z

A small post this week - Even though I was expecting a quick up-move in Nifty, I was taken by surprise by the force of the move as our initial resistance of 5720-25 was broken in no time at all. In fact I hadn't even bothered to put the next level on chart - thinking it to be way too far. The next level is 5920 and we are almost there.

In global markets - Friday evening saw some bearish price action - Primarily in European equities & confirmed to some extent by US equities. The risk Fx and equities in Europe/US are at crucial levels - and if S&P 500 can conclusively break the region of 1130-1133 (meaning 2 consecutive EOD closes above the level), I feel that bears would throw in the towel en-masse exposing their... er.. underbelly. However, till that happens I think bears would put a lot of effort in protecting this crucial level - so we can expect some volatile price action around this area.

Nifty EOD Levels for week of 20-Sep-2010

Nifty Analysis

2010-09-12T20:27:00.000Z

Nifty ended the week slightly above the rising trend channel. If we see another weekly close above the channel - the break to the upside will be confirmed - till then we have to keep the possibility of a false break higher in mind.

Nifty - Weekly Trend Channel

On the daily charts - the next big resistance should come in around 5720-5725 - there are good near term supports at 5600 and 5525.

The way Nifty has traded so far this month - I think a quick test of the next resistance is possible followed by sideways/consolidation for some time. Amongst international indices - I feel that S&P 500 is likely to run in rough weather around present levels - which makes it quite interesting to watch the actions of Nifty as it is hovering on confirming a bullish break.

Nifty EOD Chart Levels

Nifty Analysis

2010-09-05T17:17:00.000Z

As mentioned in last week's post - 5351 proved to be a strong support and we witnessed a strong bounce from that level. Now however the onus is on bulls to keep the momentum going. From my perspective we need to see a couple of consecutive daily closes above 5525 to see some strength in the markets - until that happens this market will remain in no-man's land, although bulls have the upper hand for the time being.

Nifty Analysis

2010-08-29T20:02:00.000Z

Really short post this week - Equities did an about turn this week after breaking the previous highs - however - I am not extremely comfortable with this sell-off and there could be a swift and sharp test to the upside in offing. The level to watch is the low of 2nd October, 2010 - 5351 and in case of a bounce - the level where we could face resistance is 5490. More later.

Nifty Analysis

2010-08-22T20:37:00.000Z

The recent divergence in Nifty failed to deliver - with Nifty closing near fresh 52-week highs. Indian markets have continued to march upward despite a weakening of sentiment across major European and American equity indices - which makes it even harder to predict the short term directional moves. In Nifty and Sensex - there are various technical parameters which indicate the short-term strength to be overblown - however - with the Index at fresh 52-week high, we cannot discount the possibility of a sharp spike higher purely due to weak shorts stopping out in a rising market. There is some chance that Nifty might spike to 5700-5750 areas, however - it's not a high probability setup. Thus, for the time being I think it is best for risk averse traders to remain on the sidelines.

Nifty Analysis

2010-08-08T17:16:00.000Z

Nifty has continued its slow shift upwards during the last couple of weeks - but no major fireworks so far. MACD and Stochastics are showing a bearish divergence on Nifty EOD charts which is being confirmed by falling volume (as shown on the accompanying chart).

Nifty Divergence

To make matters worse - Friday's big jobs report in US came out worse than expected (130,000 US jobs lost in last month as against a consensus loss of 70,000 jobs). The only short term positive factor was some buying coming in towards the end of US session- which meant that the major US indices recovered most of the lost ground in the last two hours of trading and ended the day only 0.20% down.

So, what can we anticipate going forward this week ? Going by the technical evidence and the global macro backdrop - I think there is an increased likelihood of a sell-off happening from the current levels. I have adjusted my end-of-day levels for Nifty - and the first significant resistance on the daily Nifty charts comes in at 5466 - which we will consider broken if Nifty manages to close 2 consecutive days above it. The next big resistance (this one is from weekly charts) comes in at 5608 - which, although looking quite distant - can be touched in a spike scenario. First significant support in the daily charts comes in at 5366, followed by a much stronger support at 5220.

Nifty Levels

Some of my fellow traders, with whom I exchange ideas regularly - are anticipating some big moves this week/month - and I tend to agree with them. There might be heightened volatility in the days to come - so be careful - and as usual - all the best for your trading.

2010-07-25T19:52:00.001Z

No change in Nifty levels from last week. Economic sentiment remains broadly similar as well. Most of the US earnings in the last week have surprised to the upside - comfortably beating analyst estimates - Is that a sign of a confirmed recovery? I am not too sure about this as all the economic indicators are sending very negative signals making this a very mixed/confusing place for traders. I am sure that the bulls are as frustrated as the bears, as the US equity markets haven't moved much in either direction since the start of the US earnings season. This is the last week of the US earnings, and once this is done and dusted, we will see some more clarity about European and American equity indices.

The only other incident of note in the last week was the publication of results for EU Banks' stress tests. As expected by most analysts, these tests were a bit of a joke. You can read an analysis with some number crunching for the stress tests on Reggie Middleton's Boom Bust Blog.

In Nifty - our next big level (resistance) remains at 5505 - and the first support comes in at 5323-5325. As usual, all the best for your trading.

Nifty Analysis

2010-07-18T14:52:00.000Z

Last week's trading saw our 5323 resistance in Nifty being broken finally - but not with much follow through. Global worries are still weighing Nifty down, restricting its otherwise bullish undertones. For US and European equities, it was a mixed bag of events last week - with some of the earnings comfortably beating estimates (Intel, AMD, Citi..) while a few struggling a little bit (Google, BAC) - However, what really weighed on traders'/investors' mind alike was suddenly how weak had the economic data become. It was this weakness of economic data - ranging from inflation related data to consumer sentiment figures as well as leading indicators/Michigan/ISM etc., that finally prompted a sell off in Friday's equity session. As a trader, I have been following these economic releases over the last many years - and I was really struck by how uniformly negative the economic data in the last few weeks has been. I cant recall a time- except during the height of 2007/2008 sell off , when the data releases were coming out so bad week after week after week.

Keeping this in mind - I would suggest all investors/traders to exercise some caution in the coming weeks/months as consumer sentiment seems to be suddenly eroding, exposing the weak belly of western economy susceptible to sudden bouts of weakness.

Going into this week - I see the next biggie level in Nifty as 5500-5505. The first support now comes in at 5323-5330 (which was our last resistance level before being broken) and 5210 (which has already worked very well as a support in the last couple of weeks). Apart from that, in case of sudden weakness, 5140-5150 can be a possible support area. Looking at the chart formations in Indian as well as US markets - there is some chance that Nifty might test 5325 area and then bounce from there depending on how the US markets take support during next week. In any case 5505 remains an excellent resistance, and if reached, offers a good reward/risk ratio for possible medium-term short trades. I have attached a Nifty chart below highlighting the levels mentioned - and as usual - all the best for your trading.

Nifty Analysis

2010-07-11T17:30:00.000Z

A short post this week as not much has happened since my last post. Nifty has been dragging its feet between my perceived levels of 5323 and 5210 for the last couple of weeks (5210 being the exact low of the range)- until last Friday - when it closed at 5352.45. Now, if we close above 5323 on Monday - then I'll have to consider this particular level broken for the time being in Nifty our stance would return to wait and watch from the sidelines. There is a conventional resistance level at 5366, however, the next big resistance comes in at 5505 - which is quite some distance away at the moment.

Amongst the global markets - S&P500 and the European equity markets have again found some strong support - resulting in some vicious up-moves last week. This whole up-move/retracement has been in a short week - and a week without too many economic data releases - which is a bit surprising/frustrating as almost all the data releases in recent weeks had been coming in very bearish - and it seemed last week that traders were willing to ignore the bad news - for the time being at least. This week sees the return of a relatively busier calendar - and a few important releases - such as US Retail Sales figure and release of FOMC minutes accompanied by clarity on US corporate earnings- which should make things a little bit clearer.

Nifty Analysis

2010-06-27T13:33:00.001Z

Nifty has been much stronger than the US markets in the last few weeks with the US markets struggling to break the 1115 - 1125 area that I mentioned in my last post, however our resistance of 5250-5260 in Nifty was broken relatively easily. Given the world's financial interdependence - it is difficult to foresee a complete de-coupling of these two markets, however Nifty can outperform S&P for short stretches of time - creating an illusion of decoupling.. If anything - Nifty has been very similar to the German Dax 30 index in the last few weeks - which has shown similar strength - largely on back of a weak Euro - which is supposedly good for Germany's export oriented economy.

So - as usual, being traders, our biggest concern is - what can we expect going forward in these markets and are there any pockets of good risk/reward that we can possibly take a position on.

In the chart given below - I have outlined my major Nifty levels on an End-of-Day time-frame. The big resistance from my perspective is 5323 - and Nifty needs to close above it for two consecutive days in a row for me to consider it broken. Given my bearish stance on other world markets - I think going short on Nifty with a stop above the break of 5323 is a good risk/reward trade. There would be some volatility depending on the outcome of G8 and G20 meetings this weekend - which could give us some exaggerated moves in the coming week's opening trade. The big areas of immediate support in Nifty - as I see them - are 5210, 5100 and 5030 with 5030 being the strongest of these three. As usual - all the best for your trading.

S&P 500 and Nifty Levels

2010-06-16T11:41:00.000Z

I last updated about S&P 500 taking support and the levels did work nicely in the US markets. Now however, it looks like S&P could run into some resistance / drift into 1115 -1125 area - and there is a relatively high chance that this area could turn out to be a major top. In addition - watch 5250-5260 in Nifty as this is a big level for the Indian markets in the hourly charts.

On another note - I have been reading a LOT of negative stuff by seasoned economic commentators. One of the biggest reasons for worry being cited is ECRI's (Economic Cycle Research Institute) weekly leading indicators which have turned negative since the bottom was hit in March - and even then ECRI's indicator was one of the first to signal a recovery in the markets. ECRI (run by Lakshman Achuthan) has a tremendous track record in predicting macro trends for the economy and you should ignore them at your own peril. To be fair though - ECRI has not confirmed that they see the recovery as stalling, as typically, they'll wait for a few weeks to see if the leading indicators remain in the negative zone.

2010-06-07T20:17:00.000Z

Apologies for the long break - have been busy with some family commitments. I do not currently have access to my usual charts - therefore no updates on Indian markets. However, today the S&P 500 has closed at an interesting level - which could develop as a support depending on tomorrow's trading, and similarly if we are able to break lower from this area - then this move down could become more serious and next stop would be around 975 in S&P - (20% down from the top).

The comments and posts published in this blog are NOT trading recommendations. They can not be considered as trading calls or advices. If you decide to use the information offered here for your real trading, it is at your own risk.

Nifty Analysis and Levels

2010-05-23T19:46:00.003Z

As discussed last week, the momentum on daily charts in Nifty continues to be negative. The global story is unfolding at its own pace and is putting further pressure on the Indian markets. The macro-economic situation continues to be extremely volatile - and traders in Europe and US are not really sure how things are going to settle. In short - it is the perfect recipe for a heightened dose of volatility. Although, India has been relatively unscathed so far - any major movements in US and European markets are bound to affect the Indian equities eventually.

So far, Nifty has held our support of 4895 - In the week ahead, the first major resistance in the short-term hourly charts is at around 5010 followed by more resistance in daily charts around 5065 - 5075 levels and then a very strong resistance around 5175 level. 5175 is a crucial area that Nifty will need to break if we are to see a reversal in daily momentum. Till that happens, the momentum will remain bearish and I'll personally continue to look to trade from the short side.

On an unrelated note - Gold has been a bit weak in the last week. However given the level on uncertainty in global markets - I think there might be some good support around $1160-1165 levels in CME gold futures.

I am not updating the chart as there hasn't been a shift in any major levels apart from short-term hourly chart levels. Wish you all the best for your trading.

Nifty Weekly Analysis and Levels

2010-05-16T21:05:00.000Z

Momentum in Nifty long term charts (weeklies and higher) is still bullish - however, the momentum on daily charts has turned bearish - largely owing to negative global sentiment - and aided to some extent by a strong Rupee. Another area of concern on S&P 500 is that during the last week - the sell-offs happened on better than expected economic data releases - which is usually a sign of some forthcoming weakness - as it could signify large players offloading long positions on the back of increased activity during positive news flow.

I am updating my levels for Nifty (as shown on the attached chart). Red lines at 5175 and 5220 show significant resistances and green lines at 5065, 4895 and 4615 show significant supports - with 4895 and 4615 being stronger supports. The shaded area between 5330-5345 - although unlikely to be tested in the near term - is a highly significant resistance area, if reached.

In weekly charts (not shown here) - there is a very good support near 4740 - which increases the possibility that 4615, if tested, would be a very significant support on the daily charts.

This is all for the time being - I'll update the levels as the situation warrants. Meanwhile, have a good week and all the best for your trading.

Nifty Weekly Analysis and Levels

2010-04-25T19:38:00.001Z

As we discussed last week - the support areas were kicking in at 5160 and 5090 respectively - and Nifty did bounce back strongly from the first support at 5160 - printing Monday's low at 5160.90. In addition - S&P 500 and Dow Jones composite index ended the week on a high note taking the US markets into fresh high territory for the current year.

Looking ahead for the week - we have various long term support and resistance areas lined up for us. On the supports - as mentioned in previous post - 5160 and 5090 continue to be strong areas of support. On resistances - we have the area of 5350 - 5388 (76.4% retracement). In addition - I have been speaking about 5490 being a good long term resistance as well. Therefore, if we break recent highs - the next reasonable target zone for Nifty is 5460-5490 - where the index should take a breather. As for the time being - the markets have been able to maintain the bullish undertone - and all recent dips have proven to be decent buying opportunities . (However - there is a strong chance that the highs for the current year would be somewhere in this general area.)

Attached is a Nifty chart with all the levels discussed. As usual, good luck.

Nifty Analysis

2010-04-18T08:25:00.004Z

On Friday, SEC charged Goldman Sachs with fraud ( bottom line being that Goldman Sachs failed to disclose relevant information related to the structuring of CDOs it sold). If you need an in-depth analysis of the same - you can find it on Kid Dynamite's blog. There was a moderate sell-off on the back of this news in the European and American markets, with S&P 500 spot closing -1.61% in the red.

Since the Indian markets were not open - it is only natural that there will be some reaction to this new piece of info on this week's open. Not being a CDO expert by training, it is quite difficult for me to understand the intricacies of the issue at hand - however it does seem that there is a bit of witch-hunting being carried out by the US administration - which is desperate to portray itself as the upholder of moral values in the financial markets.

Such musings aside, more relevant for us is the price action in the Indian markets - On a longer term perspective - it is quite possible that we are in the general area for the top for this year, as Nifty has retreated from a strong long term resistance ( see my last week's post). However, in the short-term, the momentum is still slightly bullish, irrespective of the recent lull in upward advances.

Keeping that in mind - my immediate areas of support on Daily Nifty charts are 5160 and 5090. Both of these should prove to be strong lines of defence - and if 5090 is taken out 2 days in a row, then the bullish pattern is not valid anymore. As usual, good luck.

The comments and posts published in this blog are NOT trading recommendations. They can not be considered as trading calls or advices. If you decide to use the information offered here for your real trading, it is at your own risk.

Nifty Analysis

2010-04-11T19:04:00.004Z

Not much has changed in terms of levels given in my previous posts, I still think Nifty can touch 5490 in a blowout scenario. However, in terms of long-term charts, Nifty has reached an important level - which has the potential to act as a huge resistance on weekly charts. As can be seen from the chart attached - Nifty has retraced up to 76.3% of the whole move down - the level is at 5388.5 .

Back in April 2009, when Nifty had broken through the 23.6% level - I had mentioned the possibility of Nifty reaching this level to a trader friend of mine - plus the possibility that this level would then act as a big resistance/support. The reason for my being so keen on this level was that I had spotted an interplay 0f 23.6% and 76.4% levels on Nikkei long-term charts - meaning that in a retracement, if 23.6 acted as a good level and then the prices reached 76.4 % , the chances of 76.4 acting as a good support/resistance increased exponentially. Now that Nifty has actually managed this seemingly improbable feat - it should be quite interesting to see how the index behaves in this region.

On a separate but related note (hat tip: - You Buy The High, I Sell the Low) the P/E ratio for the index is back at the regions which have traditionally marked the top of strong rallies.

2010-03-28T17:50:00.002Z

A very short post this weekend as really dont have too much to add to my last week's post. I mentioned long-term trading levels last week and so far, there have been no changes in how things stand. Will update if any levels/opinions shift.

Nifty Analysis

2010-03-21T20:17:00.003Z

Nifty has now finished its expected target and once again sitting in a tight resistance zone. BankNifty index on the other hand didn't really behave as I hoped it would, but is still at a risk of a big pullback. I do expect the Nifty to take a breather/pause here (especially, if it closes Monday's session below 5235). Still, in case it moves higher, the key resistance levels are 5285, 5363 and 5490 (on daily charts).

In the larger (and more fundamental) picture, inflation remains a big headache for the Indian government - as no economy in the world is capable of dealing with double digit inflation on a sustained basis. Therefore, even though the move to raise interest rates by 25 bps was unexpected, it was not altogether surprising.

In an textbook world, the interest rate hike should act as a dampener on relentless equity advances - however, we do not live in an textbook world - and we have to watch the equity market beyond the first knee jerk reactions. From a trading perspective, I consider it much safer to go short on currency pairs which are closely correlated to equity markets - such asAUDUSD rather than go short on equities themselves.

I am not a economic analyst by training - but my personal belief is that Indian and Chinese economies would gradually come at par with western economies through a combination of currency adjustment and inflation - (my definition of par is the value placed on similar labour and skills ) i.e. - In 10-20 years or so, one hour of labour should be worth roughly the same amount in India as well as China, USA or Europe, thus bringing everyone on a level playing field. However it is a shift of the magnitude of movement of tectonic plates - and can only happen ever so slowly.

In terms of short-term trading levels - as mentioned earlier in the post - the big levels ahead are - 5285, 5365 and 5490 - and out of these - 5490 is likely to be the most difficult to break, and if tested, it could provide a decent shorting opportunity. On the support side - the levels are 5235- 5205, 5160 and 5090. Out of these 5160 and 5092 are likely to be the strongest areas of support.

BankNifty at resistance

2010-03-07T17:28:00.005Z

The bullish undertones have crept back in the markets over the last couple of weeks. On Friday - The non farm payroll figure released in US was "less negative" than analysts expected it to be - supposedly leading to a rally across board in the equity indices.

There is not much to do in Nifty from a position trading perspective at these levels and as mentioned in the last post the next big level is around the 5200 zone. Therefore - This week I have turned my attention the the BankNifty Index - which I believe is at a very strong resistance area (beginning around 9045) and could see retracements up to 8865 to 8755 area. If correct, this could indicate some weakness to follow in the banking stocks over the next few days.

I am attaching the chart for BankNifty with the levels. Have a good week.

NIFTY Update

2010-03-02T13:10:00.002Z

Wish all my readers a very Happy Holi.. Hope all of you had a good time..

Not much to update.. as no new patterns have been formed.. As suggested in my earlier posts 4689-4738 was an important support and it has held nicely. The big struggle area remains at 5200 region. However - minor levels exist at 4934 and 5065.

More interestingly - we are approaching the first Friday of the month - which is the usual date for the Non-Farm jobs data release in the US and will dominate the tone for the short-term.

As for S&P 500 - the area I am watching keenly is 1130-1132 - and I feel it is a good place to open a long-term short position with stops above recent highs of around 1150.

Not attaching any charts as not much to update on NIFTY charts - apart from minor levels.

Support held... what next??

2010-02-14T19:15:00.003Z

We have been following the support zone of 4738-4689 for the last couple of weeks and the support seems to have held nicely so far. Not just that, S&P 500 seems to have taken a breather from the recent sell-off.

The big question for me is that whether this is a golden buying opportunity or a bounce from here should be used to fill your pockets with some short positions?

Technically, my central scenario is that Nifty could see a bounce up to around 5200 region (chart attached) and then we have to wait and watch to see if it takes resistance there or not. Looking at the Sensex chart and the way it has behaved at major levels (not shown), I am inclined to believe that any rally from here is a chance to sell. As a part of this scenario, there is some possibility that we could see a sharp sell off taking out last week's low (but hopefully not closing below 4738 for 2 days in a row) and then make a fresh intermediate high again.

In global indices, it is a similar kind of story - although S&P 500 has not made a break through the really crucial levels - charts from the much faster Dax (German Index) suggest that we are in for some prolonged bearish action. However, I have to add that all this analysis is from daily charts - in the weekly charts, the bullish formations are not quite over yet.

2010-02-07T17:03:00.003Z

As we expected last week, markets did come down to touch our support zone. In our post a couple of weeks back, I anticipated this support to be super-strong - and I'll watch the markets eagerly in the next few days to see how well this area holds. If we see a bounce in Nifty - potentially we could go as high as 5220-5240 (marked on chart).

Many traders are predicting an end-of-run for the equity markets - particularly the S&P 500. One of the most significant levels to watch for in S&P 500 is 1035.40 - which is the 10% drop-level from the recent highs of 1150.45. A 10% drop is an indicator for many traders that a bull run has ended and a 20% drop is the sign that a bear market has started - although these are just rules of thumb, these are useful levels to watch, as many traders keep an eye on them.

The attached Nifty chart shows my short-term levels of choice on it.

4855 has held... so far!!

2010-01-31T18:32:00.002Z

The big support of 4855 has held so far.. but the bigger support still is at 4738.

Looking back at the charts, it appears that the region of support extends to around 4690. Since Friday was largely a bearish day for US and European markets - and the fact that most of the selling action happened late in the day - when the Asian markets were closed - makes it very possible that we will test these levels this week. I am attaching a updated chart. If the levels of support that I have mentioned are taken out decisively - then I think the trend would have turned again - and we are likely to see traders and funds approaching markets from a seller's perspective again.

Happy New Year ( Belated!!) and Update

2010-01-23T17:17:00.003Z

Hi all,

First of all, wish you all a very happy new year and loads of success & wisdom for the coming years.

My apologies for the looooong silence, have been busy with development and launch of a automated trading strategy for a trader that I work with. The work consumed more time and effort than I could have ever imagined. However, most of the work is done now, and all that remains is trading the strategy!! (which should be automated pretty soon as well.. leaving me nothing to do but watch the charts the whole day.. Bliss!!) .

The current situation in the markets warrants some thought.. Indices have sold off aggressively for the last few sessions and dollar looks likely to gain strength (especially against AUD, EUR and NZD). The face that currencies sold off before the equities did is a negative sign for the equities.

Nifty has pulled back from the highs and I was trying to figure out possible areas of support - the first support (not huge but nonetheless significant) as I could see is at - 4935, followed by a BIG support@4855 and HUGE supports at 4738 and 4538.

Out of all these, my personal favourite is 4738 (meaning worth trading) . Having said that these could change as trading progresses and new areas of support and resistance develop in the markets. This time, I'll try and update charts much more regularly.

A chart with the levels is attached below:

2009-09-17T12:18:00.003Z

Apologies for not posting due to

A) Busy schedule and mission-critical stuff going on professionally
B) Markets confounding any attempt at rational analysis..

will be back soon though..

In the meantime, chew on this fact:

From 10th March 2003 to 16th July 2007 - S&P 500 index did not have a single 10% retracement! chart attached.

NIFTY Divergence on daily charts

2009-08-17T16:46:00.002Z

Nifty has developed a nice bearish divergence on daily charts. Here's the chart:

Interesting market levels

2009-08-11T07:12:00.003Z

Over the weekend I was reading some stats about market history and came across an interesting piece. In 1929 - Dow Jones Industrial fell 48% from the highs, it then rallied 48% from the lows and then collapsed 78%. There were other examples from various other markets like Nasdaq and US treasury yields, but the basic idea remained the same, that the markets in these examples tended to rally back by approximately the same amount that they had fallen (or rallied) before resuming their primary direction once again. I thought I would apply this analysis to major markets in the current environment and share them with you.

First, our home market - NIFTY has already bounced way more than it fell - NIFTY fell 64.5% from the highs and the 64.5% rally from the lows was achieved at 3707. The level of 3707 itself is quite interesting in itself as that's where the NIFTY stopped before the election results came out and it is now a very decent looking support on the daily charts.

S&P 500 fell 57.7% from the highs and a rally of the same amount from the lows will take it to 1051. Dow Jones fell 54.9% and a rally of same amount from the lows will take it back to 9975. Similar targets for other markets are:

Dax: 5597
FTSE:5148
EURUSD:1.5179
GBPUSD:1.8387 (phew!!)
NZDUSD: 0.6828 (quite close to it now)
AUDUSD: 0.8350 (done last week)
AUDJPY: 81.86 (done y'day)

All in all - these are very interesting levels - and at least in case of NIFTY the level coincides with a natural support on the charts - which could make it something to watch very closely.

Have a good week..

Weekly Markets Analysis

2009-08-02T19:49:00.003Z

There is not much to add this week.

Up-trend is still intact in NIFTY as well as all other major indices in daily and weekly time-frames. The points that I raised in last week's post are still valid - especially risk currencies not getting as bullish as equities and in addition Bonds were quite strong on Friday - which makes you scratch your head and think that something is not quite right here and has to re-adjust.

Whether that re-adjustment takes place in equities or something else remains to be seen - in long term - I think equities (especially in mature markets like US, UK and Eurozone) will have to readjust to the fact that debt induced booms are simply not going to reappear all of a sudden - So, no matter how strong S&P 500 rallies in the short-term, it's going to be shown the mirror sooner or later by the fundamentals of the market - i.e. consumer spending and income - which are not going to recover in any hurry.

In the short-term though - it is a completely different picture and shorting this market is like standing in front of a high speed freight train. I would request all of you to go through one of my previous posts - which outlined long term scenario for S&P 500 and is more relevant than ever. Here is the link.

That's it for the time being and wish you all the best for your trading.

Weekly Markets Analysis

2009-07-26T17:20:00.003Z

The much touted Head & Shoulder failed miserably across all equity markets and most of the blogs I read are littered with stories of frustrated (and wounded) bears. The sentiment seems to have done an about turn in the equity markets and the most talked about pattern these days is the reverse head & shoulder in weekly S&P charts!! talk about reversals!! The reverse H&S pattern has now been triggered going by the traditional technical analysis. However, I would like to see a close above the blue line for second week in a row - as shown in the chart.

There are a few things to keep in mind though: The first counter-signal that I see is coming from forex markets - With renewed strength in the equity markets - US Dollar should be getting murdered by currencies like Australian Dollar and New Zealand Dollar - which doesn't seem to be happening at the moment. The second counter indication is coming from Bond markets which should be getting sold-off the cliff with so much strength in equities - again this is missing at the moment and at best there seems to be some half hearted attempt to sell Bund and T-Notes - but no fresh lows for the time being at least. Another strange indication is the weakness in soft commodities like Soybean Meal & Wheat . These markets took support along with equities in March: however, the rally in these markets stopped in the beginning of June and Wheat made fresh lows after that.

To sum up - there are plenty of inter-market signals which make the strength in equities a bit difficult to understand - but to generate any serious short-interest - Nifty would have to close below 3900 - something which looks quite improbable at the moment. For the time being - we just have to play this market on a very short term basis and roll with the momentum.

All the best for your trading!

Nifty head & shoulder and how to play it..

2009-07-12T19:52:00.003Z

Last week, I discussed various markets and developing H&S patterns across a range of markets. During the course of last week, all of these signals were confirmed (Although S&P 500 futures have not closed below their left shoulder for 2 days in a row - something which I always look for).

Coming back to Nifty this week, we have our own home grown version of head & shoulder as shown below. As we can see - the formation has been confirmed by two successive closes below the upward sloping neck-line. The first partial target is at 3765, and the final target taken in the traditional manner is at around 3600. The first big resistance is at the low of left shoulder - which comes in at 3515.25. Second major resistance comes in at the neck-line itself. In case we break up without doing even the partial target - then the big resistance can be expected at 4335-4340. I have put down all this on the chart itself to make it clearer. As usual - all the best for your trading this week.

Weekly Markets Analysis

2009-07-05T19:26:00.006Z

It looks like exciting times could be back for equities this week. I am avoiding any positions in Indian markets before the budget - the chances are that everyone is expecting a good - pro-market budget - so if there are any surprises they would be on the downside. (As a complete opposite to the election results - when all the expectations were for a middling, negative result and the force of a clear mandate took all investors by surprise).

However, there is plenty of action happening in other global equity indices.. S&P 500 has a clear head and shoulder pattern, so does Dax 30 index. Amongst the risk currencies (which tend to closely track equity markets) - NZDUSD is definitely looking very toppy. I'll keep the words to a minimum this week and let the charts speak for themselves. All these charts are attached below. Only one word of caution - do not jump in too early, as none of these patterns have been confirmed yet - wait for the confirmations to occur - In other words - do not be driven by either fear or greed and remain objective. As usual - all the best for your trading this week.

Weekly Markets Analysis

2009-06-28T19:46:00.003Z

In the last week, Nifty has resolutely resisted any effort at sustained selling and there are very little clues in the short term movements to be sure of a solid trading opportunity. The only clues lie in the movement of other global indices such as S&P 500, Nikkei and Dax 30 which have been pointing downwards for a couple of weeks now. Therefore, in the shorter term I am maintaining a downward bias - but only based on movement of other markets..

In the longer term charts - there are a couple of things which are noteworthy -

In this chart the distance between the points 1-2 has been extended from point 3. The resulting extension has been shown on the chart. What is notable in this chart is that so far all significant Fibonacci levels have worked quite well - 61.8, 100, 161.8, 200. The 261.8 level coming in at around 5090 is the next logical choice in the long run. Another noteworthy thing is that if we take the Fibonacci retracement from 2252.75 to 4693.2, the 23.6% retracement (not shown in the chart) comes in at 4113 - roughly the same as 4106 - which is the 161.8% extension shown in the chart above. It may not mean much but usually if a level has been reached by two different Fibonacci formations - it usually turns out to be a strong level.

Weekly Markets Analysis

2009-06-21T19:34:00.005Z

As anticipated, equities retraced some of their gains last week. However, Nifty and S&P 500 started showing some signs of renewed strength in Friday's trading session. Let's look at the possibilities going into this week.

First - let's take a look at S&P 500 (spot) 60 Minutes chart:

In case a continuation of Friday's move occurs this week - the best resistances for S&P 500 (spot) should be in areas of 936 and 944 - based purely on standard Fibonacci retracements. However, looking at the price patterns made by the index on its way down and subsequent movement - I would consider 944 as having higher possibility of working as a good resistance based on the fact that 916-917 (23.6 retracement) worked as a good resistance initially - indicating that 76.4 retracement could be significant as well.

Now, let us take a look at the Nifty hourly chart:

In case of Nifty, it actually closed Friday on a good resistance as can be seen from the chart.

However, not discounting the probability of a break higher, If Nifty was to test higher levels, then 4450 seems to be the best possible resistance to me - considering that it was a decent support on the way down and it is a 50% retracement higher. Any substantial break above that and I'll be worried about the down move. In case we go straight down from here and do not test any higher levels before making fresh lows (this is the crucial bit) - then downward targets for Nifty could be in range of 3850 - 3900.

Weekly Markets Analysis

2009-06-14T22:12:00.005Z

The short-term NIFTY chart is showing a big MACD divergence on 60 minute chart as shown in the attached image. Although not a guarantee for a sell off, it does suggest that the prices may retrace a bit before deciding on the next big move. It's also worth noting that Nifty has displayed bearish divergences in the last month (marked in blue) - which did not result in any significant sell-offs, but markets did remain subdued for a few days in a consolidation.

In the medium term - which is the next couple of months, I expect the NIFTY to cross 5000 before running into stiff resistance. I'll try and explain the rationale for NIFTY's medium term target in a separate post this week.

As for the global equity markets - both the S&P 500 and Dax 30 index have been showing a bearish divergence on MACD daily charts for some time now, which suggests that prices need to take a breather. However, if the S&P 500 index manages to break the recent high this week, then this has the potential to result in a sudden and sharp upwards move as there seem to be quite a few short-term bearish trading positions riding on the divergence and breaking of the highs will result in a mass exodus of these positions. From a longer term perspective - anything close to 1000 in S&P is definitely worth a medium to long term short.

Weekly Nifty Analysis

2009-06-07T20:05:00.004Z

Nifty broke through the recent top of 4509 this week, but the momentum has been lacking somewhat and no real buying has emerged on the break. Nifty has also come close to hitting a level at 4650 which was a significant high in August 2008.

In European and American markets, Friday saw the release of Non-Farm Payrolls data. This release is always eagerly awaited by the markets as it gives an indication of employment situation in USA. This Friday, the payrolls data came in much better than expected . However, the equity markets sold off a little bit after an initial rally on the back of the figures. This price action suggests an unwillingness of participants to hold longs over the weekend and perhaps a liquidation of some long positions close to previous important high of 950 in S&P 500.

Last week also saw a minor (in actual money terms) but nonetheless a potentially important development for the markets - On Wednesday 3rd June, a bond auction for $100.7 million conducted by the Latvian government failed to attract any buyers. Here's what the Financial Times reported on the auction failure -

"A failed Latvian government debt auction on Wednesday sent tremors across financial markets as investors feared that emerging nations round the world would struggle to find buyers for a huge wave of sovereign debt issuance.
The auction failure revived concerns about the economies of central and eastern Europe and triggered a sell-off in the shares of Swedish banks, which have invested heavily in the Baltic nation. The currencies of several east European countries fell sharply against the dollar.
The failure to raise any money in the auction of short-term treasury bills was due to fears that Latvia would have to devalue its currency, the lat, because of its economic woes. The government had hoped to raise 50m lats ($100.7m)...."

Many analysts have been predicting an unavoidable devaluation for Latvian currency with potentially damaging consequences for Swedish banks, which have a high exposure to Latvian currency loans. The big unknown in all this is the potential snowball effect once bad news starts coming out - so it will pay to keep a close eye on situation which could grow rapidly worse.

This is all for the time being - I still have not been able to take time out to write a post on Fibonacci levels that I have been meaning to write for some time but I'll try and do it soon. Meanwhile, all the best for your trading!

Nifty weekly analysis

2009-05-31T21:32:00.004Z

As we discussed last week, the element of surprise after the post-election rally had already been lost by the start of last week and the chances of a sharp downward move were decreasing with every passing day. As the week showed us, prices continued to tick upwards after an initial exploratory move down last week. We are now quite close to the previous high of 4500 and as I have mentioned earlier, if that goes, many bears would start waving the white flag which would create a psychological back-drop for a significant top to form. At this moment, given the price patterns that have already formed - I have a fairly wide range as a target zone in case of a possible break above the recent highs. I expect Nifty to test the range of 4900-5180 in case of a break higher. The only other significant resistance is at 4794 which is the 61.8% retracement of the whole move down.

Once again, as with everything else, if Nifty spends too much time close to the recent high of 4509.4 without breaking it significantly, then the element of surprise would no longer be there and then we could see some time spent in a consolidatory phase.

On a separate note, I will try and share some interesting aspects of bear markets in my next post sometime during the week ( time permitting) . I have been noticing these patterns across a range of long term charts and it will be interesting to share them with all of you and get your comments. Till then - all the best for your trading.

P.S: I watched this video today - among other things it has Bob Prechter discussing his long term outlook for the markets :
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=alfMvPsjQiXA

Nifty P/E Ratio

2009-05-24T20:26:00.003Z

This afternoon, I was discussing Nifty's recent price movement with another trader friend. His reaction was the same as mine - disbelief at recent price movements!

Even though he is relatively more bullish about overall prospects of Indian markets in the short term -he agreed that the recent one way price action was simply unsustainable over any time frame. Both of us were just thankful that we were not caught with any short positions when the election results came out!!

He showed me his chart for Nifty P/E - which I am reproducing below,. The chart itself is self explanatory - to read the full article please follow the link.

http://you-buy-the-high-i-sell-the-low.blogspot.com/2009/05/indias-nifty-50-too-fast-too-soon.html

That still leaves us with a question as to what is the best way to trade Nifty in the short term. The downward retracement after the initial burst high has not been sharp enough - Sure, we could still see it this week but the best moves typically come almost immediately after the big move up.. and the probability for a sharp down move decreases with every passing day as the element of surprise is no longer there.

The way I look at the recent price action, there was a lot of open short interest in the markets before the election results were out, as lot of people were expecting a close result with no clear mandate for any party. More than anything else, the insane price action that we saw on the day after election results was a result of the shorts stopping out of their positions rather than anyone entering the market with fresh longs. Moreover, this rally had the effect of short positions having changed hands from one set of traders to another set, who were not short to begin with but saw this rally as a chance to get short at inflated prices. Typically, in absence of fresh longs coming in the market - Nifty should have retraced most of its gains within 2-3 trading sessions of the rally. Since this has not happened, I suspect that there has been some retail long positions entering the market. Now there is still a small chance that downward move could gather steam this week - especially if S&P remains weak during the week as well, However, more importantly, a break of these recent highs would mean that the last of committed bears would throw in the towel clearing the way for a move towards 5000 level.

In terms of immediate levels, please keep an eye on 4185-90 levels - If Nifty closes above 4190 this week as well, then the chances for a break higher would increase dramatically.

My favourite blogs

2009-05-18T11:23:00.004Z

Yesterday, an acquaintance of mine mentioned in an email that this blog was rated as one of the top 15 Indian business blogs on inforum.in.

Curious to see the list, I went on their website to see the rankings and saw that the list did feature this blog. In response to the list, there was a bit of a heated discussion about the suitability of some of the blogs in the list (this blog included) to be included in the top 15..

Since I did not compile the list and was not aware of any such list being complied, I cannot comment on the inclusion criteria for the list. However, I would like to share my personal blog list with readers of this blog. I follow most of these blogs/news sources quite regularly - there are some Indian blogs in the list and the rest are mostly concerned with macro-economic analysis or discussion of specific trade ideas.

1. Macro-Man: Primarily covering macro-trading ideas, economic news analysis, blogger's own views and (sometimes) funny poems/prose/snippets from a trader's perspective. Updated daily.

2. Todays Macro Trading Focus: Although not updated as actively as Macro-Man, the quality of ideas presented is top-notch. Covers macro-trading ideas and macro-economic analysis.

3. Bank of New York Mellon: In-depth analysis of economic data releases. Updates multiple times a day depending on data flow.

4. Bare Talk by V. Anantha Nageswaran: Although not a blog, I find analysis in his column very helpful in forming a longer term view of the markets and not get overly excited by short-term noise.

5. The Indian Investor's Blog by Deepak Shenoy: Covers fundamentals for Indian markets and also keeps the global perspective in mind. Very informative and timely blog.

6. GalaTime by Kaushik Gala: Very informative and stimulating blog for discussion/analysis of fundamentals of Indian markets while keeping the global perspective in mind.

7. Gaurav's Blog by Gaurav A Parikh: Valuable perspectives on Indian market's from an insider.

8. BWS Capital Partners: Provides a nice and succinct summary of relevant news and some analysis. Covers US and Pacific markets most of the times.

9. Cross Connections by Farzana Versey: The only non-markets blog in my reading list. Farzana writes with a passion and intensity that most of us can only dream of.. Often amusing and almost always provocative - her blog is my refuge when I feel sick and tired of markets.

Elections over - A fresh wave of euphoria??

2009-05-17T15:59:00.003Z

The anticipation surrounding the elections is finally over and the results may have surprised quite a few people.

Even though there was a lot of bullishness already built into the markets going into the results, I think these results are quite significant from a long term perspective. More than any other recent elections, these elections have given a reasonably cohesive mandate and have put the Congress party firmly behind the steering wheel for the next few years at least and perhaps more.

At this juncture, taking a short-term view about the market's behaviour would perhaps be a bit defeatist by its very nature. There may or may not be a steep sell-off after a steep rally ( As a trader, I have seen a sharp sell-off a number of times, just when everything was looking extremely bullish.. almost invariably it takes everyone by surprise.). The important thing to remember is the bullish back-drop of a stable and capable government, especially when stock prices start to come off once the initial euphoria has subsided a bit. For me, it's still time to sit on the sidelines and wait for a chance to get on.

In terms of levels - if we see a sharp rally - the next big level to watch in Nifty is around 4185-90. As usual - all the best for your trading!

Weekly Markets Summary.

2009-05-10T12:07:00.014Z

The strength in stock market continued this week - gathering momentum in S&P 500 while NIFTY continuing to hover close to recent highs. NIFTY, however, has closed below the 3645 weekly level that I had mentioned in my previous posts, having spiked through the level during the week. For me, the biggest development of the week was S&P 500 finally breaking free of the trend channel that I have been discussing for some time now. In the short term, the next stop for S&P seems to be around 950 and perhaps 1025(phew!) based on fibonacci extensions, the level of 950 being close to previous highs made in January this year.

The situation in US is a curious one - looking at all the economic data released over the last month and assuming that they have not been manipulated by the government( a big assumption in itself!!) - it seems that the rate of deterioration of economy has slowed down - which means that economy is still headed sothwards but at a slower pace than before. Market participants are seeing this as a sign that things are back on track to being hale and hearty. To put this price action in perspective, I have been looking at long term charts. especially trying to see price action for previous bear market of 2000-2002. There were two major pullbacks during that bear market as I am showing below -

1) First big pullback happened between March-May 2001 (3 Months), in which prices retraced almost exactly 50% before turning sharply lower.

2) The second big pull back happened between September 2001 and March 2002 (7 Months) and this time price retraced almost exactly 38.2% from the top.

Now let's look at the situation in the current bear market:

1)The big pullback was between March-May 2008 with prices retracing more than 50% but stopped just shy of 61.8%.

2)The current retracement - which is still short of 38.2% but has broken through 23.6%.

So, looking at the structure of the last bear market, recent price action and a wonderful article by Jeremy Grantham (which I came across on Gala Time - an equally wonderful blog, especially for readings on market fundamentals) - I think the following two possibilities present themselves:

A) The retracement in S&P 500 can continue up to 1015 area (38.2% pullback) or even 1120 area (50% pullback)
B) The retracement is likely to be a sticky one - deep in price as well as time.

Which brings us to the next big question - if S&P goes through a sticky retracement - what the heck is NIFTY going to do??? Any ideas?? Please feel free to express any views that you might have..

Markets weekly analysis

2009-05-03T14:21:00.005Z

Last week was a short week and without too much directional action. My opinion of things has not really changed from what I thought last week, when I said that Nifty was getting ready for another move up and S&P 500 was still enclosed within the trend channel that I had tried to foresee. To get a better idea of how things might move in this week, I looked at the chart of NSE500 - which gives us a much broader view of the Indian markets - and it looks like that the up-trend in broad based markets is cooling a bit and has entered a more sedate, consolidating phase - I am attaching the chart of NSE500 - Please have a look. Apart from this - my idea of next big level in Nifty remains unchanged - 3640-3650 is still the area to watch in case of an upside break and depending upon your long term view of the markets - this could be a place to open a long term short or cover a bit of your long positions.

S&P 500 continues to be held by the channel and it's facing some good resistance on the top end of the channel. I'll consider changing my views for US markets only when I see a clear break of this channel. To make things clearer - for me a clear break would be when prices close above the trend line for 2 consecutive days. I am attaching the S&P daily chart as well. As usual, all the best for your trading.

Weekly Markets Analysis

2009-04-26T16:44:00.005Z

Nifty spent the last week consolidating giving a hint of its intentions in Friday's trading. The attached chart shows it clearly, the fast averages are once again attempting to crossover signalling the start of another leg up. Despite all this, I continue to be reluctant to dip my toes in the water from the long side as I remain unconvinced that this rally will hold long term steam. On the weekly charts 3640-3650 still remains a formidable target for Nifty and for me it's a place to attempt a short.

I am also attaching the chart of S&P 500 showing the progress of the Trend Channel that I had tried to anticipate a couple of weeks back. As we can see from the attached chart - prices have already taken resistance once and could approach the outer line of the channel now. As usual, all the best for your trading this week.

NIFTY Analysis

2009-04-19T16:11:00.003Z

For NIFTY, the charge upwards continued this week, although the momentum of the charge seems to be slowing down a bit. One of the things that I continuously strive for is to judge how the structure in a market might evolve and last week's post covered my idea about possibility of a downward sloping trend channel evolving in S&P 500, suggesting that the markets are still in a downward trend although the intensity of the trend has softened quite a bit. This week, I have tried the same exercise with NIFTY and the outcome that suggests itself is that NIFTY might be in a slightly upward sloping channel. In a fundamental sense this suggests that India is on a slight recovery path whereas US is not. I am quite comfortable with the idea of a gradual decoupling of Indian and US markets and technicals seem to be confirming that. The channel is not as straightforward as the one in S&P, but the coming test of the resistance will tell us whether the channel is valid or not, interestingly enough, the test of the channel might come at around the level that I mentioned last week - around 3640-3650. I am attaching the screenshot for NIFTY with this post.
As usual, all the best for your trading this week!

Nifty and S&P 500 Analysis

2009-04-12T19:59:00.004Z

Nifty rally shows no sign of abating!! Am I the only one who finds it weired that markets are rallying in face of parliamentary elections - Whatever poll predictions I have seen so far predict another mixed bag of results with no party gaining a clear majority.. Madness.. I guess that's what markets are!!

Anyways.. as I said in my previous post - I am not tempted to open a NIFTY long positions at these levels - not with so much uncertainty looming over the markets. Actually, I have another reason for not going long in equities - which is - S&P 500 coming up to an area of super resistance. The chart below shows my thinking on S&P - in short - I am anticipating formation of a downward channel in S&P. In my view - S&P 500 has not turned a corner for good - it is still going down in the medium term - but at a much reduced slope - and the current rally is kind of a slope adjustment rally, if anything. In NIFTY, I still feel 3300 has the potential to turn into a level - however it is a level on weekly charts so needs a very big margin in terms of time. The next significant level in Nifty is around 3640 - 3650 area, again on the weekly charts. I do not have any current NIFTY positions (or any other significant position for that matter) - as I will be off most of this week on a holiday. The chart below gives probable areas of resistance (highlighted) and the middle lines give possible support - in case we turn back from here.
As usual - All the best for your trading.

Does the Nifty rally have legs??

2009-03-29T18:52:00.002Z

Nifty has remained strong for yet another week, and the big question is - how sustainable is this sudden improvement in the markets. As I mentioned last week, I do not have any current position in Nifty and I am not in any particular hurry to open a Nifty long at these levels. The most likely scenario is that we are witnessing the leg"A" of an A-B-C correction and the leg B should provide me with an opportunity to go long. Even then, as per the list given last week, I shall be looking to open longs in cash for a long term haul and not in the futures segment, as I think the markets could play the sideways range for some time to come. However, if we see 3300 in Nifty this week, then I shall try a cheeky short with a reasonable stop loss.

So that, in short, is the game plan for this week as far as Indian markets are concerned - In case markets go higher Short Nifty @ 3300 - In case we see a good sell off - I would start cherry picking on individual stocks to go long - but no derivatives - strictly cash. More on individual stock levels later.

As usual - all the best.

Indian Markets Analysis / Weekly Game Plan

2009-03-22T14:29:00.002Z

At the start of the week, Nifty provided a little bit of resistance around 2800 level, but has ended up becoming a muddled area with no clear sense of direction from the area. All in all the resistance is most likely broken and we do not have a trade in NIFTY at the moment. Having said that, the time is perhaps right to take small cash positions into some of individual stocks and monitor such positions on a weekly basis. I am outlining some of the stocks with their respective support points which may act as a low risk entry positions. Pls note that if the prices close lower than the support suggested, it is perhaps a sign to exit again. These are not meant as trading recos, it's just a list of some popular stocks which are showing signs of bullishness on weekly charts.

Tata Motors - 138.65

Tata Comm: 390.1

Sterlite : 244.85

Sail: 76.05

Reliance: 1169.9

ONGC: 672.9

National Aluminum: 197.5

M&M: 281.55

Hindalco: 38.65

Grasim: 1345.8

GAIL: 200.30

DLF : 145.8

CAIRN: 160.85

Indian Markets Analysis / Weekly Game Plan

2009-03-15T12:04:00.005Z

This was a short and crazy week.. quite suitable for the Holi mood.. as if the markets had a bit of Bhang :)

What can we expect this week? The effects of Bhang should wear out this week and I expect the Nifty to run into some serious resistance around 2794-2800 area and quite possibly that may mark the end of this short bullish run. However, if we see two consecutive hourly closes above 2810, then we may have to throw in the towel for the time being. In case the resistance around 2800 works, then one possibility is that we witness some strong selling and resume a journey towards 2410ish level. Another possibility is that we do not see too much movement and the markets take support at around 2635 level. We have to wait and watch for that to develop, but for the time being 2794 is an attractive level to sell. In case we do not reach 2794 and start pulling back before that then 2565 is a very good support for Nifty.

As usual, all the best for your trading!

Indian Markets Analysis.

2009-03-08T15:01:00.003Z

Markets continue to trade with a bearish bias, although, I was surprised to see the Nifty rally on Friday, just before the non-farms data release in the US. It sometimes feels as if Nifty anticipates movements in S&P.

S&P 500 has now formed a decision point at 724 and 2 consecutive daily closes above this level will give the markets a bullish tinge - at least for the short run. Conversely, this level will also be a resistance for the markets. If 724 is breached (while maintaining Friday's low), then the immediate targets should be at 759 and 780.

This week, I started to look at individual stocks again to see if any good formations were visible. While there were a lot of potential bulls, I could only find one script which was looking comfortably poised as of Friday's close. Maruti (Friday close:649.65) has a good support coming up at 639, with potential to reach 765 & 845 in the medium term.

All the best for your trading and wishing all readers a very happy and colourful Holi.

Market Analysis

2009-03-01T19:55:00.002Z

As has become the norm, the fundamental data coming in from all over the globe is pointing towards a big mess. The last significant data release was that of US GDP, which came in at an abysmal -6.2% (Annualized) for the last quarter in 2008 . Markets did end a bit down on the day( S&P 500 made an 11 year low in the process), but have taken the data releases more or less in their stride so far. An even greater problem is raising its head in Eastern Europe, where whole countries are at the risk of defaulting on their loans. It increasingly looks like we are sitting on a ticking time bomb - which will eventually result in a complete sell off in many asset classes - particularly equities.

Monday is a crucial day for US markets to see whether they can stay below the previous low for 2 days in a row as that will have some significance. Other markets - as I see it - are waiting to take their cues from US markets. In addition, this Friday sees the release of US non-farm payroll data which almost always creates big moves in US and European equity indices.

Even though Indian markets have been more resilient than US and European markets in the last few months, if the tide turns decisively lower, there is not much Nifty and Sensex can do but to follow suit. There is no trading recommendation for the time being and we are standing aside as of now.

Indian Market Analysis

2009-02-25T15:32:00.003Z

The levels in Nifty have changed, and the inability to close significantly higher today - especially on yesterday's very strong performance by American indices, suggests that Nifty is loosing short term strength. 2798-2806 is a key resistance area now, and should hold for short term. In supports, the big supports have now changed to 2694, 2639 and 2550.

All the best for your trading.

P.S : I have changed the blog design again.. I wasn't very satisfied with the last one as the readability was quite poor. This one seems much easier on the eye.

Cross Markets Analysis

2009-02-22T18:44:00.002Z

First of all, I must say that the recent price action has been a bit confusing, with a lack of any clear direction so far in the last couple of weeks. Looking to the future, there is one thing I can say with some degree of confidence.. that equity markets are likely to see fresh lows... at some point this year..when will that happen, I am not too sure (which is a real pity!).

To clear the fog, this weekend, I have been looking at various other important charts and am trying to form an overall picture of the markets. So far, from what I have seen, a few things emerge:

S&P 500 has hit a decent support (753-755)on Friday evening and bounced back from there.
Dax 30 (German Equity Index) is very close to a big mid-term support (4002) and is likely to hit that on Monday. In any case, in after hours trading, Dax futures went below this support by a little bit and came back up.. (pleased with themselves for undertaking a dangerous journey successfully :) )
Bund (German 10 year Bonds) has finished a upward formation and has no targets pending at the moment.
Both S&P 500 and Dax 30 have long term targets pending for the bear move.. 670 for S&P 500 and 3510 for the Dax.
Gold futures are close to a mid-term resistance at 1009 (if taken out, the next one lies at 1085)
Nifty's next big support, if this week's low is taken out, is at 2612.

If we look at all these things collectively.. I am inclined towards a bit of a bounce in equity markets, as quit a few supports have been hit together, which is a bit rare. In case the bounce does happen - The first BIG resistance for Nifty is at 2882 (small ones at 2818, 2843 2858), and if we start pulling back from 2882, then 2807 would be a good support. In case the bounce does not materialize and we start plunging down.. then likely supports based on extension targets are at 2715, 2612 and 2444.

So, that's it for now and all the best for your trading.

No fireworks but mood swings likely

2009-02-18T12:13:00.002Z

Nifty ended slightly up on the day, a commendable performance when viewed in the light of heavy European and US selling in yesterday's session. Nifty did break the support at 2755, however not with any conviction.. Even so, technically, the level has been taken out as Nifty did spend a bit of time below the level having a sniff here and there.

After the level was taken out, I was pouring over the charts to see if I have been missing something as I expected more of a jump from 2755. A light bulb lit up when I compared the charts for Nifty Spot Index and Nifty Futures. The corresponding level in Nifty futures chart has not even been touched!! This points towards the important lesson that perhaps short term charts - especially intra-day are better analysed on Futures markets and Spot charts should be used for End-of-Day charts and for longer term analysis.

At this point I have no bias in Nifty - although S&P 500 charts are showing continued downward bias.

All the best for your trading.

Quick ALert

2009-02-17T09:18:00.000Z

Nifty close to its big support at 2755

Nifty has broken resistance

2009-02-15T20:23:00.003Z

Hi..
Nifty has crept up above its resistance this week and even though the fundamentals remain weak, there could be a temporary respite in the days to come for the index. Monday opening could well be a bit weak due to S&P's subdued performance on Friday, but overall, I think, there'll be some buying over the week.

First meaningful target/resistance is at 2990, then 3079 and then 3224. Meaningful supports are at 2901, 2880, 2846 and 2755. The attached chart shows the break of weekly lines over the monthly ones which confirms the end of bearish trade.

Short term Nifty Chart for Friday 13/02

2009-02-12T11:52:00.003Z

Levels for Nifty (Short -term) Valid only on 13/02/2009

Indian Markets Analysis.

2009-02-08T16:08:00.005Z

The accompanying chart says it all... Still in a downward trend (weekly and dailies still below the monthly), but has not really moved all that much. The monthly charts' resistance comes in at 2882.

When I try and look at the global picture, it looks like there are chances of this rally fizzling out this week. S&P 500 has a strong resistance in the 880 area. A lot of this rally has been to do with the new rescue package for banks in USA, the specifics should be out sometimes this week and even though initial reaction may be bullish.. if we see a sharp reversal after that, then that will most probably be the top of this rally. On a more fundamental basis, the news coming out the world over has been very pessimistic. The highlight of the week was the -597,000 jobs lost in US in January figure. The markets have seemingly shrugged off the bad figure but this week remains the key and if we do not see a follow through this week, then bearish hopes would be rekindled.

All the best for your trading week.

Ready to go down again??

2009-02-01T20:17:00.003Z

Nifty has hit a level at 2877.. I think it will find it difficult to break the level at this point.. if it manages that then the next level comes in at 2904.. the big daddy support (in the short term) is at 2834 and then a bit smaller one at 2776.

Looking at what American and European markets did on Friday, I think a weak week is on the cards. It is still a sellers' market as the news is showing no signs of improvement. We are again coming upto the important economic release of Non-Farm payrolls in US (on 06th Feb), when we will see how many jobs did US loose in the last month - another half million??

2009-01-26T21:17:00.002Z

NIFTY's first target - as per the January 11th post - 2665 has been done.. this is a strong support area and supports are working in European and American markets as well.. Therefore, shorts need a bit of caution in the markets. The weekly and daily averages continue to be below monthly T3 averages (our long term indicator).. In addition the NIFTY VWAP (Volume Weighted Average Price) for this year is currently at 2827 (approximately), therefore to talk about bullish sentiment returning would be premature, but shorts do need to be careful for the next few days, till a clearer picture emerges, if the 2665 level goes, the next level would come in at 2421.

2009-01-26T08:53:00.001Z

Wishing all readers a Happy Republic Day and hoping that the country goes from strength to strength in the coming years...

Nifty Crossover

2009-01-18T16:01:00.001Z

The attached chart really says it all..
Before I go on to discuss the chart, let me first explain what the chart contains. The chart is of daily NIFTY along with 2 daily T3 averages in red and blue, weekly T3 average in yellow and Monthly T3 average in bright green.
This week, the weekly T3 has slipped below the monthly - an occurrence which has spelled gloom for Nifty in the last year. The last time when this crossover did not work was in October - November 2005 - and we were in middle of a roaring bull market at that time.. Therefore, given the propensity of this crossover to work - I would be very apprehensive about holding any meaningful longs in the Indian markets for the near term.. On the other hand, if this crossover fails to bring a sell-off, then markets should display bullish tendencies on the reverse cross-over.

Oye Satyam, Satyam Oye...

2009-01-11T16:52:00.003Z

As I said in my earlier posts:

"The first meaningful resistance in NIFTY lies at 3140 and it will provide clues about what to expect in future."

"HINDALCO has been doing well and look to take partial profits if scripts does 61-62.. for RCOM 261 is a decent short term resistance."

Well Well.. whenI wrote these lines, I had no idea how well these things would work...

Looking forward again, I expect Satyam's fiasco to have a more long term impact on the markets.. If I was a hedge fund manager with an exposure to Indian equities, I would be under a lot of pressure from my investors to reduce my holdings as there would be justified worries about similar stuff happening in other Indian firms.. and consequently, would want a lower exposure at least till things became a little clearer..

On a more technical note, the upward trend channel in Nifty has been broken and US / European markets are showing a lot of weakness as well which may add to Indian market's woes..

Therefore, although I am a bit reluctant to short at these levels.., I would not be going long in this market for the next few days, the risk involved simply does not justify the trade..

If we continue going down - The next supports in the NIFTY are at 2665, 2421, 2027 (This is quite close to the general area of 1950 which I favour as a great support)

2009-01-04T16:56:00.002Z

The markets are continuing to look strong, but be a little bit careful towards Monday's close as European and US markets have been going up for 3 days in a row and usually there is a pullback on the 4th day to retest the waters..

Most of the NIFTY fifty scripts are looking good on the charts EXCEPT HindLever (and to some extent Hero Honda), which is a bit of surprise as HLL was quite strong on the way down, perhaps money is flowing from HLL to more aggressive plays.

HINDALCO has been doing well and look to take partial profits if scripts does 61-62.. for RCOM 261 is a decent short term resistance.

2009-01-01T17:18:00.002Z

Hi,

Wish you all a very happy 2009. Wish you all the success in your chosen goals.

The markets are looking fairly bullish now, with both Hindalco and RCOM doing well.. The first meaningful resistance in NIFTY lies at 3140 and it will provide clues about what to expect in future.

I personally feel that there is a bullish sentiment in place and we could go as far up as 3700-3900, but it's only a gut feeling, not based on any chart readings. Needless to say, I will keep posting my views as the price action develops. In the meantime, keep the Trend channel from the last post in mind, the break of trend channel will provide many clues about further targets.

2008-12-27T22:23:00.002Z

Hi,

Wishing all of you a merry X-mas and a very happy new year..

The news coming in the markets is not showing any signs of improvement, however, technically, markets are ripe for a rebound. The accompanying Nifty daily chart shows a upward sloping trend channel, the prices are at the bottom of the channel which makes for a good low risk buy at these prices, the dotted lines represent support in case the main channel is broken.

In single stocks, HINDALCO is at major levels, and a decent technical rebound is definitely a possibility here. RCOM is another stock which is at historically important levels.

I wish you all a very good coming year in 2009 and look forward to hearing from you.

2008-12-10T20:04:00.003Z

Apologies for the big silence, but Nifty wasn't going anywhere.. and it's the first time today in so many days that I saw something of note..

Nifty has tentatively broken, what was a crucial level at 2860, and this level should now act as a support, as long as NIFTY does not closes below it tomorrow. The next big resistance is 3160 (between 3142-3160 to be exact), and before that there are minor resistances at 2951 and 3024. I expect some decent resistance at 3142-3160 region.. Another big support close by is 2832 which should act as a strong base as well..

2008-11-12T12:02:00.000Z

I was not entirely clear on the difference between Deflation and Disinflation, so I searched the net and found this lucid explanation. I am pasting it here because of the topic's relevance. Secondly, the article that set me thinking about Deflation Vs Disinflation was an article by Mike Shedlock, in which he presented evidence supporting the case for deflation. The link to this article is http://globaleconomicanalysis.blogspot.com/2008/11/industrial-bond-yields-strongly-support.html

"

What is deflation and how is it different from disinflation? How long a period must the general price level fall before it would be called a deflation? What are the main causes of a deflation? (09/1999)

The MIT Dictionary of Modern Economics defines deflation as "A sustained fall in the general price level."^⁽¹⁾ Deflation represents the opposite of inflation, which is defined as an increase in the overall price level over a period of time. In contrast, disinflation, represents a period when the inflation rate is positive, but declining over time.

Deflation, inflation, and disinflation represent different behavior of the price level. The price level is commonly measured using either a Gross Domestic Product Deflator (GDP Deflator) or a Consumer Price Index (CPI) indicator. The GDP Deflator is a broad index of inflation in the economy; the CPI Index measures changes in the price level of a broad basket of consumer products. The Chart shows the monthly percentage change in the CPI (all urban consumers, all items) over the prior 12-month period, and includes periods of deflation, inflation, and disinflation in consumer prices.

Two brief periods, the first from approximately mid-1949 to mid-1950, and the second, approximately from the fall of 1954 to the summer of 1955, shown in Chart, indicate brief periods of deflation in the consumer price index. Other than these two brief periods, the CPI Index shows inflation in consumer prices over nearly the entire 1947 to 1999 period. The period from mid-1980 to mid-1983 indicates a period of disinflation, a period when the rate of inflation was declining from month to month.

Periods of deflation typically are associated with downturns in the economy. The two temporary periods of deflation corresponded to recessions in the U.S. economy. However, periods of deflation need not be as short as these two brief episodes in the 1950s. During the Great Depression of the 1930s the nation experienced a long period of deflation. As noted by Samuelson and Nordhaus (1998), "Sustained deflations, in which prices fall steadily over a period of several years, are associated with depressions, such as occurred in the 1930s or the 1890s."^⁽²⁾

References

Pearce, David W., editor. The MIT Dictionary of Modern Economics. 1992. MIT University Press.

Samuelson, Paul A., and William D. Nordhaus. Economics. 1998. The McGraw-Hill Companies.

(Taken from http://www.frbsf.org/education/activities/drecon/1999/9909.html"

2008-10-28T09:38:00.001Z

Wishing all the readers a very happy Diwali.

2008-10-26T18:24:00.002Z

Only 3 questions which need to be kept in mind.. (for NIFTY)

1. Is this the low?
2. If not, what's the next stop/support?
3. What's the next resistance in case we see a bounce?

1. Looking at the charts at this moment in time.. I doubt that this would be the low.. bottom picking at these levels may seem attractive, but as many experienced traders know (and who keep getting sucked in to try and pick the bottom nevertheless, yours truly amongst them..) that it is not a very good idea and is not unlike trying to catch a falling dagger.. however, the only thing which will make me change my mind is a very good bounce in price and time.. notice the emphasis on time, that is more crucial than price actually.. meaning that we need a bounce lasting a couple of weeks at least.. even more important, is the fact (or my opinion) that if this happens to be the low, even then we will almost definitely test it again.. so there is no point for long term traders to dirty their dainty hands at this moment.

2. Which bring us to our next question.. if we continue going south.. where is the next support? I think.. the next big long term support/target is (hold your breath!!!) at somewhere around 1920.. having said that 2000 is a crucial psychological level.. (markets being what they are these days.. bearish traders will always look for stops below this level..)

3. Our third question.. What's the next resistance in case we see a bounce? is the comparatively easier one.. I think the first big resistance will be around 3025..

2008-10-19T19:59:00.002Z

Well, 3415 has indeed been broken finally and although there was a slight pull back in some global equities, US stock indices gave up all their gains in the end session to close in the red. All in all, I do not expect this to be the bottom of equity markets. The big question for me at these levels is that whether the markets will put up a brief rally before going down again or will continue their southward journey without pausing for breath. The only sure thing that we have at this point is that if the markets continue to move south without a rally lasting at least a few days, then the next target in NIFTY would be 2590-2600.

Light relief

2008-10-09T13:08:00.002Z

The Levels seem to have worked for the time being.. I do not want to think of the places NIFTY could go to if we close below 3415 two days in a row.. so here's something to smile at and ease the pressure a bit.
(by the way - I think, Alex cartoons are simply wonderful.. you can see more at www.telegraph.co.uk)

2008-10-06T10:02:00.001Z

3420 - The next big support..

3540 - Minor (comparatively) Support

2008-09-14T20:10:00.003Z

Hi,

We are back again to the range lows in Nifty. We have been seeing this range for the last month and a half. Again, the level of 4158 comes into play and we have to see whether this holds or not..

For the next few days, the tune of the global equity indices would be determined by the outcome of Lehman proceedings. Some news items suggest the Lehman might file for bankruptcy tomorrow.. yet other reports suggest that talks are ongoing with Bank of America and a last minute deal is possible before markets open on Monday. Either ways, there is likely to be a huge impact on the markets. Interestingly enough, Federal Reserve is refusing to write a blank cheque this time and is not going all out to ensure that the buyer of Lehman does not suffer. Perhaps Fed realises that lately, it has been writing far too many blank cheques and some of these will be cashed sooner or later.

2008-09-01T18:38:00.004Z

Hi,

As I have been saying for the past few weeks, that NIFTY is volatile in a range but not really going anywhere. As can be seen by the attached image, it needs to break one of the two levels as shown by the horizontal lines. The oscillator (not shown) has again turned up although is still in negative territory. All you can do between these two lines is buy close to lower line and sell close to upper line, that ways, your risk is limited with a potentially good trade.

The trade I mentioned last week in S&P 500 worked beautifully and has done its target at 1295, S&P has experienced resistance after doing that level and S&P is again sitting in a range bound action and we have to await further developments.