As I write this letter on Tuesday, April 12, evening, The S&P is trading at 1310, down 14 points,
about one percent, while Silver on the MCX is at 59,000 which is approx 2000 below Monday’s
highs. I assume that the small declines we are seeing are probably a correction after a sensational rally in Silver, and, a steady up move in Equity. But, for whatever it is worth, we do have a decline! Suddenly, people who were prepared to buy anything at any price became cautious. The message is: All markets correct. This is a theme that has helped me time and again.
When I extend the theme to the Nifty, here is what I get: A correction has started for the Nifty. This decline finds support at 5780 and then at 5550. It appears that 5780 will breakdown when markets open on Wednesday morning, therefore, we can expect a move towards 5550.
For the longer term, the Nifty has seen a rally from 2200 to 6335. This entire up move should
correct. But, we cannot say when this correction will take place. It could have started, or, maybe we will see new highs and then correct. Yet, if I believe that a deeper correction is inevitable, then I am holding back on investing in equity, waiting for lower levels.
Tuesday, April 12, 2011
Market Outlook 13 04 2011
The new week has begun on a negative note as Nifty slipped below 5800 on Monday. It’s a short
week as we have trading only for three sessions and that may have been the reason for lackluster performance on Monday. The volumes were also on the lower side. Crude continued to trend northwards while IIP data for Feb’2011 too failed to provide any positive surprises. Wednesday also might see a repeat of Monday as markets are again shut for trade on Thursday and on Friday trade opens just as Infosys kicks off Q-4 results season. So, we might continue to slide on account of profit taking. Nifty has support around 5750 but that might just be broken and we might see levels of around 5700. Most of the sectors are witnessing correction but one needs to watch out for IT and Banking sectors as these two could bottom out soon. TCS has support around 1045-50 while Infosys is trading just around its short term support.
Similarly ICICI bank has support around 1075-80 while Axis could find immediate support around 1370-85. Auto counters did see relatively sharp correction on Monday and this trend might continue. Here, early support is likely for Bajaj Auto and Hero Honda while some more correction is likely for 4-wheelers. Nifty has support around 5745-50 and then around 5685-5700 while resistance is likely around 5835-50.
week as we have trading only for three sessions and that may have been the reason for lackluster performance on Monday. The volumes were also on the lower side. Crude continued to trend northwards while IIP data for Feb’2011 too failed to provide any positive surprises. Wednesday also might see a repeat of Monday as markets are again shut for trade on Thursday and on Friday trade opens just as Infosys kicks off Q-4 results season. So, we might continue to slide on account of profit taking. Nifty has support around 5750 but that might just be broken and we might see levels of around 5700. Most of the sectors are witnessing correction but one needs to watch out for IT and Banking sectors as these two could bottom out soon. TCS has support around 1045-50 while Infosys is trading just around its short term support.
Similarly ICICI bank has support around 1075-80 while Axis could find immediate support around 1370-85. Auto counters did see relatively sharp correction on Monday and this trend might continue. Here, early support is likely for Bajaj Auto and Hero Honda while some more correction is likely for 4-wheelers. Nifty has support around 5745-50 and then around 5685-5700 while resistance is likely around 5835-50.
Sunday, April 10, 2011
TODAYS Quate
You don’t have to be a rocket scientist to be a trader. In fact, some of the best traders whom I
knew down on the floor were surf bums. Formal education didn’t really seem to have much to do with a person’s skill as a trader. – Linda Bradford Raschke
knew down on the floor were surf bums. Formal education didn’t really seem to have much to do with a person’s skill as a trader. – Linda Bradford Raschke
STOCK TO TRADE 11 04 2011
- APIL 607.85 Alstom Projects building a trading range. stop loss at 585, Target at 689.
- Bombay Dyeing 398.75 Bombay Dyeing building a triangle . stop loss at 370, Target at 452.
- Canara Bank 632.60 Canara Bank made a double bottom. Stop loss at 615, Target at 720.
- Core Projects 337.75 Core projects making a trading range. stop loss at 311, Target at 365.
- Bharat Forge 358.20 Bharat forge is trading in a narrow range and TA Insync (55,5) is overbought. Sell below 355 with stop loss above 360.
- Kotak Bank 442.55 NR7 bar pattern in Kotak Bank. Buy above 449, Sell below 439
Nifty consolidation continues
Earnings may influence Index for coming two weeks The Nifty has started a correction. Support should come in around 5820 / 5780. We had suggested that long positions should be held unless the Nifty closed below 6850. The Index closed at 5842, almost at the cutoff number. Therefore, we will take 5820 as our cutoff number for Monday. After the first 15 minutes, if the Nifty is trading below 5820, then we should close all trading position in the Nifty and wait for support to emerge.
Short Term Trades: There are a number of F&O stocks now breaking out of consolidation patterns. These trades usually work out. We have given the charts with stoploss and targets. It is important to follow the market and then take such trades. If the market is falling, we annot go and buy blindly. Look for a stable market, then consider these trades.
Short Term Trades: There are a number of F&O stocks now breaking out of consolidation patterns. These trades usually work out. We have given the charts with stoploss and targets. It is important to follow the market and then take such trades. If the market is falling, we annot go and buy blindly. Look for a stable market, then consider these trades.
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