mkt ahead...20thsep2010...

the upwardly sloping trend channel which the nifty was following for quite a while has a width of 660 points and the channel was broken on the upperside near 5600. so the tgt around 5600+660=6260.



hold the positional long positions with near term support 5750 closing basis.

mkt ahead...13th sep 2010...

and again 5350 held like a strong support which prevented any further fall to the 5200 lvl and nifty bounced off on short covering and overall mkt buying and we had a straight 16 day uptrend which was so good that infact the feared 5585 resistance on the previously respected uptrend channel was also convincingly taken out on the upside.

most likely the nifty may now follow the new drawn channel as shown in chart with resistance coming at 5712 plus in the short term, crossing which a near term tgt may be about 5780/5880 or so.

on the valuation front, we are already in expensive zone(5550-5730) on nifty50(refer 12th july 2010 post on this blog), anything above this is euphoric and prone to sudden large moves and may not be suitable for investors but good as a fast trading play.

the resis for the day is 5666/5676 and a rough sl for near term may be kept near 5600 on closing basis.

larger picture: nifty is still in firm uptrend so far and the intermediate to long term tgt is about 6000 to the previous high, and large profit booking in between cannot be ruled out on stretched valuations.

short to medium term investors cl sl is 5345 whereas intermediate to long term investors in stocks/nifty etf's etc dont have to worry much and can keep holding although they can also book profits partially anytime the sl for 5350 is convincingly broken consistently or whenever nifty reaches euphoria or touches the upper end of expensive valuation zones.

mkt ahead...19th aug 2010...

so the medium term trend remained strongly up holding 5350 tsl solid as a rock, as i had mentioned earlier these nifty positional longs were initiated in the zone 4900-4950. no change is tsl required as of now.

the tgt is raised from 5530 to 5578 which is a resistance on previously drawn channel and nearly achieved.

as the quarterly results have been mixed so far, no upgrades have happened on the nifty50 stocks index. therefore there is no change in our 5550-5730 expensive zone on p/e basis.

perhaps we are entering a risky zone above 5500 now the with first resistance coming at 5545.

with all these factors one can consider booking partial profits in the medium term positional longs when the nifty reaches the upper end of the channel. the profit booking if comes can easily take the nifty to 5350 and then to 5200 which can be maintained as sl on closing basis.

mkt ahead...23rd july 2010...

so as per view, the medium term uptrend continues after taking support near our tsl of 5200!

there was a -ve div on the eod charts indicating some sort of potential near to short term warning to the upward rally. but with yesterday's movement, it has come down a bit.

nifty has also done the much needed breakout above our 5400 lvl and taken out its two year high. it can therefore proceed to 5550(near to short term tgt) kind of lvls once the small resistance near 5467 is taken out.

by p/e analysis i had already mentioned that anything above 5500, nifty enters an expensive valuation zone of 5550-5730. and above 5750 etc it enters the euphoria zone.

but that itself is not a reason for a big sell-off in the mkt, but it would be a time for taking some profits off the table.



as shown on weekly chart, the nifty is moving in a rising trend channel with upper and lower limits currently placed at or above 5530(resistance) and 4872 or above(support) respectively.

the tsl (or more appropriately tpbl, let me coin the term here, tpbl!, the trailing/partial profit booking lvl) for the short to medium term positional traders can now be raised to 5350 from previously 5200 lvl and sl to 5200 from the previously about 5100 lvl. all as per eod closing basis.

i do hope the tgts, sl, tsl and overall mkt view for positional traders/investors is clear to the blog reader from the above paragraphs.

mkt ahead...12th july 2010...

nifty positional buy on dips advice was given in initial stages of the current upmove from 4800.

in the last post the tsl of 5200 given was also held perfectly for the positional short to medium term long positions! thereafter we have seen a further rally 5350 and more.

how much more?

once the april 2010 high of 5400 is taken out it can continue upto resistance from 5530 onwards as shown in chart above.

valuations can start getting expensive in the region i mentioned earlier on my nifty p/e charts .i.e., band between 23-24. on the current upgraded eps that comes to a range 5500-5730.

the caveat is valuations is not by itself a reason to completely sell/exit from positions and miss a leftover rally, say in any euphoric situations, which is not seen yet happening now.

US stock market valuations...

updt 05th july 2010:

an improved earnings estimate for next year can make the p/e valuations a bit attractive for next year.

one can also see the inverse relation between div yield and p/e ratio in above table.

technically the dow and nasdaq have broken down below their respective significant supports(9888/1040) of recent times. as such the outlook becomes bearish for medium term and it seems has potential to go down as much as 900-950 if 1000 lvl is also convincingly broken down in s&p500(us).

while a short to medium term bounce or pullback can occur anytime due to oversold lvls, but any such reversals from very recent lows is yet to appear on the charts. when such a pullback/relief rally does come, may be quite a significant one on the upside and might get sold into if 1145 is not decisively crossed and closed above.

pls go through my accurate analysis/view on dow jones and s&p500(us) in following links 16th march 2010 03rd may 2010 11th may 2010

mkt ahead...23rd june 2010...

there's no bearishness, however profit booking may continue for sometime.



as seen from spot nifty chart above, today's support is near 5300.

for positional short to medium term longs, the support(tsl) can be kept below 5200 and tentative sl can be about 5100.

because of the sharp run up in recent times, these lvls are a bit deep. but remember the advise on cutting shorts and going positional longs was given in comments section at 4950 after which time our downward tgt of 4800 etc was also achieved.

mkt ahead...16thjune2010...

5200 tgt for short to medium term traders done in style holding the recent lows!

nifty is moving nearly as per the tentative channel lines i had drawn in previous eod nifty spot chart, right now its touching the upper tline:


right now the near term upside is seen anywhere between 5250-5340 as seen from chart above where some resistances are placed. but with dow and the us mkts also moving up, there should not be much difficulty and dips toward the 4950 looks like a buy on dips kind of mkt for short to medium term. the 5300 plus lvls may not happen immediately.

there is another bullish brkout yday and its probable that perhaps the correction starting from 5400 might be over. some large profit booking can always come but if gets retricted to 4950-4980 region will be fine(and not more than 4700 in medium term).

mkt ahead...08th june 2010...

nifty trading lvls for today(chart):


quite large volatile opening moves we are getting mainly due to the US mkts irrational overnight moves.

but the near to short term trend is still up.

hopefully we might be able to hold on to the recent lows with 4780 as sl for the completion of tgt 5200 and more if nifty remains stable in next few sessions.

mkt ahead...31st may 2010...

what a splendid bounce we had from 4700-4800 lvls in last 2-3 sessions. it was anticipated that we get a support there. we did see some amount of buying and short covering there. there was a net cash buying by both fii's(410 cr) and dii's(342 cr) on friday.

scenario fits perfectly in my ew case I given much earlier. can't confirm at this stage if all the corrective/down waves are complete. looks like perhaps a process of short to medium term bottom formation is taking place.

monday or tuesday nifty may undergo slight amount of profit booking upto 4930-4950. near to short term traders may utilize this dip(if it occurs) to buy positions with a tgt of 5200/5220 with cl sl of 4780 or so.

if any large selling comes say after nifty reaches 5200 etc towards 4700 with a large cash buying support from large fii investors, it would be one of the clues to be utilized for buying for medium term investors later, or whenever such an uptrend gets established.

till then its an intraday to near term trader's mkt.

mkt ahead...20th may 2010...

the global mkts continue to be in turmoil.

10800 was a crucial breakdown lvl on the dow jones. current dow jones movement is only a continuation of the pullback from its deep lows of 9800 lvls.

it is restricted within two down candles. broadly it is sandwiched between its 50 and 200 sdma's breaking out neither on the up or down side.

the bearishness after its earlier huge fall makes it remain in sideways with a weakish bias. therefore basically it has become a trader's mkt with no clear direction.

the weakness in US mkts has had a significant impact on global stock mkts particularly emerging mkts and crude which is just trying to hold $70/barrel lvl.


in just 11 trading days the nifty has twice bounced from its 200 sdma, but it was finally broken closing basis yday and downside lvls like 4800/4850 now can be possible.



(tables above are indicative of the almost continuous and relentless profit booking/selling largely by the fii's in the cash mkt)

it is to be noted that downtrend on nifty remains intact and every pullback is getting sold into.

it is important that it recovers quickly above the 200 dma and sets up some sort of a short to medium term uptrend, when downmove gets over, to keep hopes from the investors point of view. some good buying support may possibly come near the 4700 and 4800 region, if not, then 4675 can be an exit point for investors and would be a cause for worry going ahead. lets see if we get buying support there for the mkt to recover thereafter.

also one can refer to my ew analysis Case I on nifty spot eod given earlier.

-abhay r somkuwar.

mkt ahead...11th may 2010...

it was an unbelievable bounce in the nifty yday(although nothing in comparison to the european stock mkts) on the back of huge european union bail out package.

even dow has risen and nearly wiped out its huge fall it made a couple of days ago. everything looks so good? the question being asked is, is it time to buy and whether the bearishness of the fall has ended. but the damage on daily charts is already done.

i say its still a pullback for traders and not exactly buying opportunity for short to medium term investors. but the medium term support on dow(i.e 9800) is very well held, investors with given time frame can buy on declines only if that lvl is held on sustainable basis after some time when process of bottom formation or any indication of established uptrend is seen.

one thing to note, why i said its just a bounce/pullback rally. the bar made on 6th of may is from high of 10926 to low of 9780, so the last two days movement is still confined within this bar, and no breakout has occurred in any direction.

secondly the daily macd is bearish, so some large players might use the rally to exit, till or unless any crossover takes place.

on nifty also the picture is that of a pullback rally from the recent lows.

the first of the falling trendlines on daily charts is also now encountered so it may see resistance in this 5200-5230 kind of lvls going forward. even if it takes these resistances out there is less than 100 points upside potential.

hence one can use the current lvls for booking profits in longs in stocks/nifty. the daily charts medium term trend is down with a bearish macd. till the trend turns positive, one can stay out from short to medium term buying.

nifty movement as per ew analysis'...

some possible wave counts for the ongoing nifty correction from the peak of 5399.65.

Case I:



though getting into an oversold territory, the nifty may immediatly have a downside till about 4950, which coincides with the 200 dsma of nifty.

then a small bounce/pullback may occur in the near term upto 5123 or so, which coincides with 100 dsma.

thereafter, it will have to be seen whether this would be sustainable or not. if not, and c of C breaks on downside, then the downside can continue upto wave C-e which can take it to about 4800 or slightly below that lvl.

Case II:



after C-c a small pullback just above/near 5100 and then short term bottom formation near 4950.


when Case I or Case II is complete(i.e C complete), then a recovery in mkt for short(to medium) term may happen, which can be bought into for short to medium term.

right now the medium or medium to intermediate term picture is still okay on nifty and the us mkts.

-abhay r somkuwar.

mkt ahead...

there was some hope of a small pullback today but, due to the disastrous dow reaction yday and getting volatile due to reliance supreme court verdict today, which ruled in favour of ril.

the mkt has become more bearish and volatile. thankfully the cut is not as deep as the US mkt.

right now 5000 is being held in intraday.


current near term support seen around 4950 closing basis. its to be seen if it holds in coming days.