dear readers,
welcome to the new year 2012 !!! I am posting this after a long long time. Since we were/are still in bear mkt therefore very few postings were made as blog largely put views for positional and long term investors that are on buy side. iam sorry for the inconvenience caused to devoted blog followers,well-wishers and friends because of the delay.
posting an old nifty chart of mine updated for recent moves. nifty has reached the weekly downtrend channel upper trendline again after respecting the 4700 lvl largely falling slightly below it for a brief period of time and bouncing on RBI governor's hint at peaking of interest rates and followed by crr cut more recently. a reaction at this point at upper end would be a natural profit booking of the glorious 10% rally on nifty. even though nifty remained in longer term downtrend, stocks were earlier mercilessly beaten down which in last month's rally have seen good buying by FII's and others and as such are looking good for a long term investment buy. however one should wait for the mkt to turn to long term bullishness too, else it would be just a trading kind of move.
near and short term resistance as seen from above chart is 5200 spot. short term support is near/above 5000.
(to be updated)
as has been said for last more than 6 months about the nifty reaching towards 4700 and a roadmap chart/graphs also been posted on the blog, finally we're here to near 4800 ! readers had been previously been asked to book investment positions with accurate tgt 6340 and for those left with open positions on long term investments later on were advised to profit booking on bounce upto 5900 where indeed it went and turned back downward. and on final dip and bounce nifty could not cross even the initial fresh upmove decider lvl of 5700-5750 which was mentioned in my posts, thereafter coming down again on large selling and profit booking to 4700.
have a look at march 2011 and before that forecasted map of nifty by me:
so dear friends/readers, most stocks have come down heavily and looking good at cheap and attractive valuations. and after this big correction, the nifty is oversold on both eod and weekly charts and is near to major support 4780 or whatever and there is expected to be a bounce sooner but pls wait before making fresh investmnt.
rate of inflation in india over a period of time and in some of the major economies of the world.
In India the inflation seems to have peaked back in early last year and is tapering off thanks to the steps taken by the RBI. But as can be seen we still have high inflation rate CPI due mainly buoyant food prices led price rise which is not able to meet the huge demand supply gap owing to many factors. some GDP growth rate got sacrificed in checking the inflation. however if the RBI and the govt remains serious in controlling inflation and due to the actual effect coming after 4-6 month of recent rise in repo and reverse repo rates measure if the inflation rates gets checked below 6-7 mark till first quarter next year then it will be better as a whole for the economy.
as i had indicated repeatedly before that some sort of profit booking or correction/reversal would likely happen near 5700/5725 etc.
finally we had near to short term reversal on triggering of 5600 spot on downside which was given as tsl for short term longs which were already in about 300 point gain earlier and so nifty is in near term downtrend with sideways consolidation in last couple of trading sessions.
the previously given supports of 5450 and 5400 in the last post may be still valid for the short term uptrend from june lows.
hence the broader near to short term range for the nifty seems to be in between 5400-5750 at present.
for the near term trade positive only if nifty trades above 5654. for intraday one can trade long if nifty starts trading above 5597-5600 for 20-30 points.
nifty underwent a sideways rangebound profit booking till 5600 which was given as stoploss/exit for near to short term longs without breaking down below it and made a suprise upmove on thursday and did close above 5725 but failed to close above 5700-5720 on last friday. hence a fresh bullish breakout on weekly charts was not done.
earlier a brkout tgt from 5500 of 5750 from earlier triangular consolidation pattern is completed which led to profit booking on longs.
so far a reversal in its uptrend has not taken place.
as pointed out earlier, it is facing resistance at 5700 and may be still in that bigger downtrend(a brkout from which it can be freshly bullish upto 5800 and 5900 intitially. 5900 will be final deciding level for downtrend to end and will keep possibility of lows below 5177 open. but will it really go 5900 or above it cannot be said with certainty just now). support for short term is near 5450 and short term sl is 5400 which is the support on the trend channel.
nifty crossed the crucial resistance zone of 5610-5620 too and and did well for itself moved to next big resis of 5700-5720 of July and can get a reaction here so be cautious as it might show some sort of reversal or profit booking also. one can keep a tight sl of 5585(support 5600) spot cl basis if they have rolled over their nf longs. nifty would be freshly bullish only above say 5725 spot.
the public sector oil companies stocks and other counters continued their gains and kept nifty up in yesterday's trade also.
in the morning nifty did come down but remained much above 5400 and again started its upmove to take out the profit booking zone 5510-5520 quite easily, remained steady and closed above it. minor resis near 5550 and it seems is well poised toward that 5580-5600 lvl now. the near term support seems to have shifted up in 5400-5450 zone.
the nifty price had broken below the neckline of the suspected H&S pattern earlier when it went down to below 5200, on eod charts. its not yet broken on the weekly charts.
on the back of short covering and buying in many frontline counters (due to oversold near term charts and positive impact of weak global base metals and commodities as well as some resolution to the Greece debt issue and crude oil moving to near $90/bbl etc) and other stocks of the order of net 400 cr in cash by fii's the mkt rallied up on last friday with about 2.8% gains in a single day and the nifty moving up to near 5480 finally closing at 5471.25. it was expected that it would touch 5500 the next trading day before profit booking would kick in.
but overnight a 1% downward closing in the dow, there is a possibility that the opening move on monday on nifty as a reaction and profit booking might bring it down to test 5390-5400 region. if that doesn't break then nifty might again move up to test resistance of 5510-5520 in coming days which may be difficult to cross. the sl for longs may be kept near 5335. the short term support for the mkt is 5200 and resistance is 5600. these lvls are clearly seen in the chart, the movement would be restricted within this range for some time.
sudden slide in morning saw nifty breaking down below 5300-5328 region and almost testing previous crucial low of 5177.
if in case it doesn't manage to respect 5177 then a test of 5050 etc may be possible. but if any bounce due to oversold nature on near term charts occurs would likely to be restricted to 200-250 points i.e upto 5500 lvl. sharp selloffs in stocks have also taken place.
so where did all the selling come from?
certainly not from cash , the net figure between fiis and diis comes to positive net 341cr !
and fii derivatives data is not very clear on sell off. so we might get some pullback in near term.
5600 was done again but 5700 was not reached since the bounce from 5328 just did'nt get pass the crucial resistances at 5600/5620 and profit booking coupled with net selling from fiis(net cash trading as shown in table below) ensured no more upside in the short term and brought it down again to lower lvls.
right now the nifty is again touching the lower end of our trend channel that has served its purpose of predicting supports and resistances accurately for such a long time. a testing time of 5300-5328 zone, since any break and stay below the channel for short term means bearishness till 5177. still some more time before we can call it out of danger in near term.
as already been mentioned many times much before, there is a good bias toward 4700 once that lvl also breaks. the medium term has remained in downtrend since april second week, that intermediate top was also forecasted accurately near 5900-5950 as also the time.
but maybe some pullback/bounce might stll occur from 5300-5328 region, which might give some respite.
found something that someone might call a probable head and shoulders pattern forming on the nifty eod chart. once the 5300 etc breaks and if it goes down then minimum downside tgt then becomes 5300-600(distance of head from neckline of pattern)=4700 again the same figure.
so trade cautiously and only in small lots. many stocks particularly from infra, telecom sector in smallcaps and midcaps do look attractive in near to short term but also keep overall mkt direction in mind while taking positions.
before nov 2010 i had given nifty tgt of 6340 and nifty reacted just 1.5 points below it and never saw highs again ! i had mentioned many times of lower tgt of 5400 after it broke below 5800 and thereafter a final tgt of 5200. as u have seen it went perfectly according to the script. thereafter i said a major pullback will occur and those long term investors that did not book profits when nifty was above 600 should utilize this major pullback to book profits and exit the market when nifty will likely go toward 5500 and 5800 lvls, at the most the pullback will go to the trendchannel upperside which was at 5900-5950 range. it was also given that medium term long positions could be taken near 5300 till 5800 etc.
as u have seen nifty reacted exactly from 5945 and came down again in early april 2011 and retraced its entire upmove from the low of march(5348). i had predicted this intermediate top max till 2nd week of april 2011 on this blog.
recently the dollar strength has made nifty continue its weakness bringing it below 5400 again and closer to the channel lower end near 5350.
all this intermediate to long term move was well projected in advance and written here on this blog and later posted a chart also showing the likely long term movement path of nifty and this view which is so far come 100% accurate again and again like so many earlier projections of mine. this one being based on long term upward trending trend channel.
pls also refer to feb and march 2011 and later posts and charts. e.g
https://lh6.googleusercontent.com/-glTejq0YqG8/TW2YwvEyLKI/AAAAAAAAA7I/zm5r0vGcpq4/s1600/nifty_trendchannel_02ndmar2011.png
(to be continued)...
the magic of two trendchannels(upward and downward sloping)
forecasted map(updated):
some bounce maybe from lower end of trendchannel due to near oversold on eod charts, may or may not be sustainable. however many months back since 5350 was then broken on weekly charts i had mentioned downside till 4800 most likely after pullback max upto 5800-5900, so were there after rallying to 5945 back to near 5350 again so lets see what happens from here on.
if bounce does occur now near lower end of the trendchannel 5500 and then 5600 may be possible, but too early just now to say that.
cash turnover by fii's and the domestic institutional investors in May 2011:
so the medium term downtrend from 5950 is still on.
short term still ranged between 5440 and 5605. this has helped our nifty strangle strategy given on twitter.
no fresh trades(long or shorts) as of now till the range is broken out on either side.
positive bias if nifty manages to stay close above 5530 through the week, 5593 needs to be broken out eod for any near term upmove. 5620 and 5670 remain near to short term resistances.
many months ago i had mentioned(probably in some comment section on this blog) that the dollar was just bouncing and no reversal had taken place, rightly so dollar index continued downward journey. but right now a nice pullback, looking at few days lagging data, from lows and divergence on usd-inr price rsi charts indicates that it may have already completed near to completion of its intermediate to long term downmove and chances of a reversal might be taking place, meaning a stronger dollar for short term(one month) is quite possible. and much stronger reversal if medium term weakness is also taken out(needs follow up in days to come to confirm on this). a stronger dollar-inr has recently meant money getting pulled out from the indian stock mkts.
the prev range roughly 5730-5950 was broken and a short to medium downtrend brought the nifty upto 5450 lvls(refer the earlier post on nifty for strategy).
in short term the nifty is consolidating sideways between 5450 and 5750 and in near term sideways between 5450 and 5670 roughly. therefore it is imp that nifty stays above 5450 for any chances to move upto resis lvls and beyond in short term.
immediate tgts to near term upmove is 5620 and 5670 but only if it stays above in intraday or closes above 5593 spot.
in intraday the imp resis to upside reversal 5580 is already broken above so as long as 5500 is respected as support the bias is still up(the upward movement will be there for today if it stays above 5560-65 in morning or above 5520-25 at the close).
since mcx gold has exceeded our intermediate to long term tgt of 22000 and no signs of profit booking. now raising the tgts to 22800 and 23800 and for very long term remains at 27500 or so. medium term support 21000 and sl below 20800.
rangebound trade in nifty(although its in sideways down short term) between 5730 and 5950. near term trade accordingly. fresh positional longs only above(with sl 5940) or shorts only below(with sl 5800) this range for medium term although its in a medium term uptrend since mid-feb of this year.
