Indian Market/Stocks » Cash The Chaos

Technicals for Jan 16th 2012

Indian Market/Stocks, Premium Content 19 Responses »

Jan 162012

Well I had a nice holiday, hope you all did too.

Nifty(4866): Most of the BRIC markets have had a nice start to 2012 and India is up a tidy 4.5%. So, many of you might want to know if things have turned a corner. Here is my prop indicator which signalled the start of a bearish phase for India in November 2010:

India Barometer

As can be seen from the chart above, the indicator is continuing to clock lower lows and is accelerating lower. The best the bulls could hope for is that, this indicator this time is going to be concurrent rather than lead the market.

The pattern on Nifty still resembles a 5 wave down move followed by a 3 wave correction. This is still a bearish configuration. A drop to 4800-4775 will be a confirmation of this bearish set up.

Nifty Daily Charts

So at 4800-4775 , we will look for shorting opportunity. Frontline banks are likely to come under pressure. Support for Nifty 4800 and Resistance kicks in at 4920-4950.

Technicals Dec 22nd 2011

Indian Market/Stocks, Premium Content 20 Responses »

Dec 222011

Nifty(4693.15) Markets staged big rally of 3.2% from the important support of 4530. Remember, one day does not make a trend and sustainability and follow through are hall marks of a trend. Shanghai composite has hit yet another new 52 week low this morning. Let us see how long the window dressing for Nifty lasts. If Nifty heads below 4600, yesterday's low, it will be clear indication of a shallow correction having come to an end.

Nifty hourly charts

Before we get too aggressive on the short side, we would like to see additional clues for the short term. However, the medium term trend is strongly down. Resistance(marked in yellow) 4810-4840 is going to be formidable in the event Nifty manages to conquer 4730. Support is at 4530 and a breach of this would signal a move to 4380.

Open position: Short Indusind @267 (partial profits taken)

Technicals 21st Dec 2011

Indian Market/Stocks, Premium Content 31 Responses »

Dec 212011

Nifty(4544): We have a positive divergence on the intraday charts and the 4530 support has proven its strength for the moment. The SGX nifty is pointing to a nice 1.5% pop at the open.

Nifty hourly charts

Over the last several weeks there has been considerable amount price action around the 4720-30 zone. Watch for resistance to kick in this area. If market does stretch through this then expect the Friday high of 4820 to act as the supply zone. Due to holiday season, volumes could be thin and the year end window dressing by funds to prop up NAV may keep this market afloat for a while. Be flexible and stay nimble.

Resistance: 4720-30; 4820 and Support: 4530 and 4380

Open positions: Short Heromotors from 2025 (booked at 1938 and reloaded at 1910) and Short Indusind from 267 (partially booked at 239)

Technicals 20th Dec 2011

Indian Market/Stocks, Premium Content 24 Responses »

Dec 202011

Nifty(4613): The decline from Friday continued and Nifty pushed closer to our projected support of 4530. There was some erratic moves later in the day and markets saw a mild recovery and finished the day paring some of the losses.

Nifty intra charts

From the chart, we have not seen any divergence to indicate that the move is ending but we have to be a little flexible here about taking our profits, a little early. First, the momentum on the daily charts is yet to dip below the level registered when markets hit 4640 in November. Second, there is a hammer pattern on daily charts - this can fail and needs follow up buying to confirm. Third, in the smaller degree we are assuming we are in the fifth wave which is often known for failure to reach ideal levels. So let us keep these in mind.

In the bigger picture though, recovery if any, is likely to be temporary and the broad trend is still strongly lower.

Open Positions:

1)Long Nifty 4500 Dec put @20-21

2) Short Induindbank from 267 (covered and reloaded at 254)

3) Short heromotors from 2025 (covered at 1938, reloaded at 1910)

4) Silver short from $34.2 (booked part at $31.4 and reloaded at $30.65) - Please book profits today at $28.8. When silver breaks $28.1 short again

What’s with Heromotors and double tops?

Indian Market/Stocks Comments Off

Dec 162011

Heromotors seems to be having some sort of love for double tops. The chart below shows the recent chart pattern for this stock.

Regulars of this blog would recall from here that ahead of Heromotor's announcement of ending its tie-up with Honda there was a similar formation and the stock had a sharp drop to 1375.

Once again there is a double top pattern in this stock when the benchmark indices are set to fall further. What can also be seen from the bottom panel is a huge block crossed ahead of this lowest close of 1965 and a breach of 1910 on the daily chart. Also the stock seems to have completed its 5th wave on the weekly charts (labels not shown).

Disclosure: My premium subscribers are short here.

Technicals Dec 16th 2011

Indian Market/Stocks, Premium Content 22 Responses »

Dec 162011

Nifty(4746): Markets came within striking distance of breaking the 52 week low of 4639 but has seen a small bounce from 4673. So far it does not look like down draft has ended. May be the policy decision today will be the trigger for a sell off. The extreme short term technicals is a bit fuzzy but as far as I can decipher, it does look like 4843 or 4910 is the maximum upside if this relief rally continues.

No new trading bets was taken yesterday.

Technicals Dec 15th 2011

Indian Market/Stocks, Premium Content 11 Responses »

Dec 152011

Nifty(4763): In our last update we had expected Nifty to get a temporary reprieve from 4690-4720 zone and markets saw a temporary reprieve from 4728. It is likely that the this relief is over. Remember the 2 days Nifty hit 4640? Nifty bounced back and closed above 4700 levels. The lowest closing was 4706. Now, 4706 will act as a bull-bear divide line. Bears need to cross this line to signal that a new low is coming. As mentioned last week, new low on or before 21st Dec seems very likely.

The forces of deflation is taking control of the global markets, and it will spare no asset class. This is exactly why we are short on Gold and Silver. Even crude is a short but we will look for a low risk entry.

New open position:

Long Nifty Dec 4500 Put at 20-21, price objective 80-100.

Note: On CNBC today at 8:40 IST

Technicals 13th Dec 2011

Commodities, Indian Market/Stocks, Premium Content 12 Responses »

Dec 132011

Nifty(4760.60): It has taken just 3 sessions to retrace a little over 3/4ths of the move from 4640 to 5100. The probability that wave ii of wave 5 ended on Friday itself and the markets are progressing in wave iii of wave 5 is quite high. In simple terms, the markets are in the most powerful leg of the move within in this decline is very likely.

Nifty hourly charts

If this is the case, the minimum measurement for this powerful leg works out to 4505. In the extreme short-term, market could find support in the region of 4690-4720 and have a small relief rally or it may just plunge straight through 4690 and go for the breach of 4640.

In other markets, Gold has breached an important support .

Gold Daily charts

Ill keep this very simple - as can be seen from the chart above, a trendline has been established (blue dashed line) and Gold went below its previous support of 1667. Overnight, there was also a strong rally for the dollar index. If you want to short Gold, the stop is $1770 on the front month contract (a few points above Dec 2 high if you use any other contract). I expect Gold to hit 1410-1380 atleast in the first 6 months of 2012. To be honest, Gold has whipsawed me on a couple of occasions and that is the only reason for not having an official trade here but this is a clean set up, atleast for the short-term.

Silver: We are already short from 34.2 and have taken part profits. If silver drops below 30.65, add back the same quantity you booked at $31.4 and revise stop to 33 as stop for a target of $26.

Technicals 12th Dec2011

Indian Market/Stocks, Premium Content 9 Responses »

Dec 122011

Nifty(4866.70): Markets took eight sessions to rally from 4640 to 5099 but it has just taken 2 sessions to wipe out a little over 50% of those gains.

Nifty intraday charts

A relief rally now to something under 5000 mark would mark wave ii of the wave 5 (see chart). More specifically, the ideal level for this relief rally to end would be 4935 or 4980. So if our reading technical pattern of the intra-day chart is correct, a very powerful move (wave iii of 5) that challenges the Nov low of 4640 should evolve post this relief rally. As mentioned last week, a new low on or before the 21st of December seems likely.

Supports: 4810 and 4640 Resistance: 4935 and 4980

Technicals Dec 9th 2011

Indian Market/Stocks, Premium Content 13 Responses »

Dec 092011

Nifty(4943): The corrective rally of wave 4 is over and the next leg lower of wave 5 has begun.

There is a gap area between 4920 and 4866 and the markets are likely to find temporary support around this area. Yesterday's low was exactly at the top end of this gap range. However, this is not fatalistic and if the market were to plunge through this it would signify intensity of the weakness to come. Nifty took 9 trading sessions to bounce from 4639 to 5099 and quite often impulse move like the one we have assumed exceed the move in equal or lesser number of sessions. So if we are correct a new low should come through on or before 21st December.

New position: Short Siemens 714 for a price objective of 650 SL 736 (all cash levels)

Older Entries Newer Entries