What the Market looks like. We are in an uptrend after a sharp decline. This should be considered a relief rally. But, as rallies go, the market can go up and give a lot of relief. However, the long term trend remains down. We should expect lower levels in the next few months. Nifty Watch:- The Nifty opened at 5566 with a gap of 16 points. The Index quickly made a high at 5589, and then moved down to its day low at 5436 with a decline of 153 points to its day high and finally closed at 5468 with a decline of 98 points to its open.
Today’s market decline may be a correction of the ongoing short term up trend. As we have discussed yesterday, traders should have taken partial profits in the morning when the Nifty was touching 5600. Any remaining short term positions should have been stopped out at 5500.
Trend:- The short term trend is remains up despite today's correction. A close below 5350 is required to change this trend to down.The Intermediate trend remains down, with the Nifty trading below its 200 days and 50 days moving average. We may see choppy market conditions next week with markets responding randomly to various pre-budget events. Fresh buying is suggested if and when the Nifty closes above 5550. These levels will change over time.
TA Insync(55-5) is now above the level of -45 and still moving up. This indicator is suggesting upside momentum.
Level:- Looking for support at 5460, then 5350. Major resistance comes at 5550. After a rally of 414 points this week (from 5175 to 5589) nifty may start a consolidation. Thus coming few days may be trading between the ranges of 200 points - 5350 to 5550
Summary:- As Budget will come in next month thus the market may start consolidation before the budget. This can lad to choppy market conditions. Below the fibonacci retracement down levels are shown in the chart. We note that the Nifty has corrected 38% of the up move. This was the minimum requirement. We could expect a correction towards 50% - 5382 or even 61.8% which will be 5333. Therefore, it is wise to wait till the Nifty either moves up above 5550 or
remains stable at any one of the retracement levels.
Sunday, February 20, 2011
Market Outlook for 21 02 2011
The ongoing 5 day rally was cut short abruptly and violently on Friday as Nifty slipped more than 150 points from its intraday peak of 5600. Nifty had rallied another 50 points in the morning session before selling in most heavyweights pushed the indices lower. Selling was seen across the board as bears pounced upon the opportunity. The infra and realty were the first to lose ground but even the banking counters encountered a drubbing. Still, Nifty ended the week with a gain of around 2.8%. Banking index emerged as the biggest gainer with Capital gains and metals index following closely. All sectors finished the week in green. But, as we enter the expiry week for the Feb series the momentum may have shifted towards the bearish scenario as the volumes on Friday were huge. 5350-70 would be the first significant support zone on the downside and while it was broken without much sweat, it is expected to provide some strong support this time around. But more than the technicals, it’s the other happenings that could impact the markets. Monday happens to be the beginning of Budget session and traders and investors would be watching it with anxiety and nervousness. If the parliament is not allowed to function properly then it would provide more fodder to the confident bears and would be a big negative. Then, the CBI enquiries into 2G scam is another event that’s causing much nervousness and there’s always a question hanging in air, ‘who’s next’. Even Friday’s session was hot on various rumors and that may have added to the unwinding/short selling. And then, we have not even touched upon the various international events, be it Middle-east crisis or tightening by China. So, overall next week is expected to be extremely volatile and it would be foolhardy to anticipate anything. As for technical levels, as mentioned earlier 5350- 5370 should be the first hurdle for bears while more support is seen around 5280-5300. Drop to the second support could be utilized for some bargain buying in banking and Capital Goods/infra counters. On the way up, 5510-25 would be the initial hurdle while strong resistance is likely around 5575-5610.
Thursday, February 17, 2011
Todays sentence
To truly master trading, an individual must be open to evaluation and change, and to adjustment if necessary, based on the observations and recommendations of those who have been successful over time. – Jake Bernstein
Stock To trade 18 02 2011
- PIRHEALTH :- Piramal Health stops the decline. Ready for an up move.
- Reliance Inds :- Reliance is coming out for a trading range. keep stop loss at 930.
- Sesa Goa :- Sesa Goa is consolidating for last 3 days ready for an upmove. TA Insync is showing over sold, ready for an up move.
Market rallies towards resistance
Nifty Watch:- The Nifty opened at 5496. The Index made a low at 5460 with a 36 point decline, and then moved up to its day high at 5550 and finally closed at 5550 with a gain of 54 points to its open. As we have discussed yesterday about a big move, that move did come about today due to yeterday's NR 7. This 90 point up move rally from its Intraday low to high shows, there is enough bullishness in the market. However, all markets correct. The Nifty has retraced 100% of its down move that started from 5550. It is quite possible that the market may now face resistance at current levels. A pullback could see a correction of 100 to 125 points.
Trend:- The short term trend is up. The Intermediate trend remains down, with the Nifty trading below its 200 days and 50 days moving average but these averages are coming closer with every advance. The 200 DMA is at 4637 therefore, it is now within strking distance of the current close. The average should act as resistance, at least initially. There will be many funds that are probably wanting to sell out, having missed the previous opportunity. These funds may step in to liquidate. If the Nifty continues to move up, crossing the 200 DMA, then we will have a strong buy signal. Let us wait and see. Meanwhile, buy on dips. TA Insync(55-5) is now above the level of -45 and still facing up. This shows us that the up move continues for few days more.
Level:- Looking for support at 5460. Major resistance comes at 5550. Today 4 times Nifty touches this level but could not able to break it and at last nifty closed at this level. So this is a significant resistance for nifty.
Summary:- Today Nifty recovered all the losses of previous downside decline which started from 5550 to 5175. Traders should take partial profit in their long position. 5550 is a resistance for the nifty. If Nifty strongly breaks it tomorrow then we can see a new high also.
Trend:- The short term trend is up. The Intermediate trend remains down, with the Nifty trading below its 200 days and 50 days moving average but these averages are coming closer with every advance. The 200 DMA is at 4637 therefore, it is now within strking distance of the current close. The average should act as resistance, at least initially. There will be many funds that are probably wanting to sell out, having missed the previous opportunity. These funds may step in to liquidate. If the Nifty continues to move up, crossing the 200 DMA, then we will have a strong buy signal. Let us wait and see. Meanwhile, buy on dips. TA Insync(55-5) is now above the level of -45 and still facing up. This shows us that the up move continues for few days more.
Level:- Looking for support at 5460. Major resistance comes at 5550. Today 4 times Nifty touches this level but could not able to break it and at last nifty closed at this level. So this is a significant resistance for nifty.
Summary:- Today Nifty recovered all the losses of previous downside decline which started from 5550 to 5175. Traders should take partial profit in their long position. 5550 is a resistance for the nifty. If Nifty strongly breaks it tomorrow then we can see a new high also.
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