Swing trader

Is January 2012 the new October 2011 ???

2012-01-24T20:32:00.009+05:30

Nifty has touched the 200 D EMA (5129) today, and a close above it can take to the 200 D MA at 5211 - so the current chart says !!

What does the title mean - 'Is January 2012 the new October 2011 ?'

To see what can happen in the future, it is better to see what happened in the recent past.

The stock market saw a spectacular rally in October 2011 against all odds, when everyone was giving targets for Nifty which were far lower. There was a major congestion zone around the 5170 - 5200 band which was formed from August 2011. Nifty faced a major hurdle at this band and declined all the way to 4728 in early October and then a sharp rally happened which crossed the congestion zone. It cleared all hurdles making a double bottom, a W bottom - all hints of a significant bottoming formation. Nifty went all the way to 5399, and then many started giving targets of 5400--5700.

What happened then - Nifty could not cross the major resistance at 200 DMA (near 5400) and crashed all the way down to 4640 in just 3 weeks.From the bottom of 4640, the next rally took it to 5099, only to make a new low at 4531.

This 'previous swing high' of 5099 was successfully crossed today.

I am afraid, crossing just a previous swing low cannot be a start of the 'next bull run'.

The monthly chart clearly suggests that a bottoming out can be confirmed only on a close above the trend-line (above 5150-75 on a monthly basis). This might seem pretty easy, since there are 4 days left for January to close and the hurdle is only 50 points away.

However, a bottoming out formation needs to happen on the monthly chart too, and it either needs to spend a few weeks near the lows, or keep going down and rising to form a U shaped bottom. A fast rally in the form of a V shape is generally dangerous.

Monthly chart:

Looking at the rally in October and now, it is seen that the sector leading the rally is different in both cases. It was the CNX IT that led the rally then, but it failed to cross the Oct high of 6432, and has crashed below 6000.

CNX IT chart:

The sector that led the rally this time is Banking. The BankNifty too has not been able to cross the October high yet (10080 then, 9885 today). I heard someone saying that the BankNifty is at a level equivalent to Nifty 5400 already - yes, fine, but what about CNX IT.

It is not correct to use this as an explanation that a major bottom is formed.

Looking at the other indices, Midcap and Nifty Junior, one can see that these topped out a little later than Nifty in October (they topped out in early November), and are still way below that top.

Midcap and Nifty Junior:

So, what does this all mean?

I doubt that a bottom has been made, and Nifty might start going down in the first week of February.

Nifty might go sideways in the next week to 10 days, and midcap stocks might still rally (similar to what happened in early November).

One midcap idea:

If the market behaves as mentioned above, Aurobindo Pharma looks promising as long as it does not go below the recent low of 95.5. Aggressive traders can buy now with a stop below 95, and conservative traders can buy above 106 for a target near 125 - 130.

Speed breaker ahead for SBI

2012-01-22T21:33:00.004+05:30

Update on SBI - comments on chart self explanatory.

Moreover, it is also approaching Overbought zone on daily chart

Bears in SBI - CAUTION

2012-01-18T19:09:00.006+05:30

After the massive move in DLF, here is another stock that can rally fast and furious.

It has been the most hated stock in the past few months, and probably wants to give it back to bears this month.

SBI - A close above 1875 can take it fast to the 200 D EMA (2058) and possibly the 200 D SMA (2136).

The breakout is a parallel channel breakout of almost Rs. 300, and the 200 DMA is a good target to achieve - SBI has been below the 200 DMA for the last 7 months, and a rally back to 200 DMA is very much on the cards.

All the best...........happy trading

2012-01-10T21:22:00.003+05:30

So, here is an interesting chart - DLF, the stock which is firmly in a bear trend.

However, the volumes traded today (3.62 crores) were extremely high (4th highest ever for the stock in its history, which includes the listing day).

Historically, whenever this has happened, DLF has rallied between 6 to 10% from that days close.

This gives 2 targets 195 and 203 if this move happens now.

Moreover, this moves come after DLF has moved up after making a low near 173 (the third time in 5 months that it has turned upwards from here). This can serve as a multi-month bottom, giving more power to the bulls.

Looking at current charts, DLF has a resistance between 192 and 196, where it might take a pause. But once crossed, it can race upwards to 205-210 - all in this month.

Good luck.....

New Year's resolution

2012-01-10T19:03:00.002+05:30

Sorry for being away.

But..........

My New year's resolution :

TO RESUME BLOGGING AND DO IT REGULARLY.

Watch this space soon............

After the defense of the 'Fort of 5200' can we see a counter attack now?

2010-07-11T20:35:00.004+05:30

The 'Fort of 5200' was successfully defended amidst weakness in the global markets. And as soon as global markets gave a reversal signal, bulls went for the kill and have managed a 'text book' breakout.

Classical TA theory gives targets of 5640 and even 5880 on the Nifty. The word 'distribution' was used a hundred times on various channels over the past week. Was it distribution at higher levels or accumulation at lower (5225 - 5250) levels? As of now, it seems the latter is true.

- Why would a leading stock which is coming out with results on the 13th hit all time highs (Infosys)?

- Why would the Nifty Midcap and Nifty Junior cross the previous highs?

- Why would the Open Interest of 5200 and 5300 puts keep rising?

- Why would the favourite whipping boys Oil & gas and Telecom make ferocious strides in the last 2 weeks?

I always maintain - any charts can have 'n' number of bullish arguments and an equal number of bearish arguments. However, I really cannot find any bearish arguments for the Nifty right now, except for the fact that recent highs 5366.75 and 5399.65 have not yet been crossed.

I feel it is a matter of time now, and since there are many who still have a bearish view, a cross of these levels can bring in huge short covering. Those who bought on dips to 5220 - 5250 last week, have already got a cushion of 100 points and trailing the stop loss is easy now. For those who might have missed the bus, a tighter stop loss can be 5290 on Nifty futures to make a fresh entry.

A small dip first?

2010-06-27T19:07:00.003+05:30

An extremely quick and brief update from the rainy beaches of Goa.....

It was an extremely volatile week that ended with a very big fundamental news for the oil and gas sector in India. The stocks from this sector will definitely be re-rated.

However, Nifty has given a bearish pattern for the weekly chart and any dip lower than the low last week (5259.9) will trigger this pattern, and the immediate supports are near 5245 and 5205. However, in my opinion, a dip to even 5160 - 80 will be healthy for another and probably a final attempt to cross 5400 on way to 5545. So, any dip this week can be an opportunity to buy as low as possible, with a stop loss below 5150.

A dip below 5150 - will most probably signal curtains to the bull run opening up targets difficult to believe right now - so, let us wait and see whether and where Nifty takes support.

No high is a high in a Bull market

2010-06-20T16:53:00.008+05:30

The bearish possibility last week was completely negated as soon as Nifty crossed 5060 first and then 5170, closing well above these levels.

I have seen many chart patterns get repeated over a few months / years, and I have spotted a very similar pattern that occurred in August 2009. Nifty fell to 4350 levels in 2 successive weeks in August 2009 only to close near the highs in both weeks. The third week saw a breakout from these hammer candles, above 4578.8 and then Nifty travelled all the way to 5181.95 over the next 9 weeks.

A similar pattern has been created now, when Nifty fell to 4961 and 4967 in successive weeks and crossed the weekly hammer candle when it crossed 5139 on the first day of the week gone by and has not looked back ever since. A chart showing the similar patterns on weekly charts is shown. However, the markets are now at overbought levels, and if the same pattern is to be repeated, a small correction is due this week - expiry is a good trigger. As shown in the daily charts of August 2009 and current, I expect a dip to 5180 - 5220 at some point, maybe before expiry.

As long as 5150 - 5170 are held in the dip as a worst case, Nifty can resume its upward march. Likely targets -------5450 - 5545.

If and when (more of 'when' and less of 'if' Nifty does give a dip, I am sure, lot of people might start shouting about the end of the rally and will also start giving targets of 4650 and 4200.

However, options data for July suggest a pleasant surprise for bulls in July too.

STAY LONG FOR JULY AS LONG AS 5150 HOLDS.

I am expecting a similar pattern in the world markets - a dip and a rise to about 5% above current levels at least (DOW 10750, S & P 1150 to give some figures)

The HungAry Bear

2010-06-06T12:44:00.008+05:30

The levels mentioned in the chart last week need to be referred again and that tells the whole story.

Nifty went to the first level on Monday and was banged down on Tuesday, 1st June, then recovered and rallied for the rest of the week to touch the second level right near the close on Friday, surely tempting many to carry longs over the weekend!

A friend @girish_k tweeted on Friday evening -

girish_k @ap_pune PIIGS are Hung(a)ry for more :D. So apt.

However, the charts had said it earlier - the trigger keeps changing.

Those who followed my old posts when I used to mention - bulls are constantly raising the bar - now, exactly the reverse is happening. 'Bears are lowering the bar'.

2 weeks back, the bar by the bears was at 5278, then at 5200. Now this bar is at 5150-70.

A gap down opening on Monday is almost sure, and if Nifty opens below 5060, it will create a dangerous formation on charts, and moreover, if the close is also below 5050, the bar will get lowered to 5060 straightaway.

The laggards of the recent past - telecom and sugars led the rally in the past 10 days, and the index heavyweights - Reliance, Tata Steel, ICICI Bank, did not do much - could it have been called a rally at all?

Tata Steel below 473 is heading for a quick drop to 466 and then 433!!

Agreed - Harbhajan Singh scores a quick 30-40 in 15 balls once in a while - but can one bank on him?

A close below 4940 opens a target of 4535! All depends on the extent of the bounce after the deep cut expected in the next couple of days.

Trading guidelines - if Nifty opens gap down below 5060, hold shorts as long as close is below 5060. If after the fall, Nifty rises sharply, and crosses 5060, one can go long and see if 5150 is getting crossed, failing which 4535 is a logical target in the days / weeks to come. All this is for the next few days and not for tomorrow. For tomorrow, I am afraid, we might close at the lows.

Disclaimer - These views can change intra-day depending on the market movement.

PS - For those who asked about HungAry, google 'Hungary crisis' and you will get the answer.

Cease fire on Dalal Street last week

2010-05-28T23:01:00.006+05:30

Last week saw a fierce fight between the bulls and the bears, and although some would say that bulls won, I am not sure.

A V shaped recovery was only to facilitate expiry of huge quantity of options that had been written, and the 'maandavli' was to ensure that expiry is near 5000. No one would have expected on Tuesday when Nifty made a low of 4786, that there will such a sharp recovery.

Yes, a recovery was on the cards at the huge support zone of 4760 - 4800, however, it was the ferocity that shook out many.

The maandavli of bulls / bears is over for the May settlement and a fresh settlement has begun.

2 important levels are shown on the chart, where bears might try to hold the bull by the scruff of their necks.

I still feel this is not a correction, but a 'downtrend', and such V shaped recoveries can bring out the bulls only to be shocked by a gap down opening.

It is going to be a fun filled month of June - definitely not for the weak hearts, where again, the range can be big.

I am expecting at least 4650 in June.

Above is purely my view and will go wrong if the market keeps going up, and crosses and closes above 5200 on the Nifty.

THE BEAR MIGHT BE TIRED NOW

2010-05-22T15:24:00.004+05:30

The image says it all.

As expected in the update on 9th May, Nifty has lost almost 9% from the April close to the lowest level on Friday, all in just 3 weeks. This has made all indicators on the daily time frame extremely oversold, and a pullback rally is in the offing now.

In my opinion, the bear, after a tremendous onslaught over the past few days, looks tired now and needs a rest. This is true all across the world markets.

This is also generally a period, when the baby bulls come out and rejoice, and start shouting that the last 2 weeks was just a correction, and that Nifty is now headed for 5500 levels and then 6500 and then....

I seriously doubt this!

Just one word of caution for the bulls - please keep an eye in the rear view mirror - and look for the charging bear once he completes his rest.

For those who believe the next rally will just be a relief rally, levels given on the chart will help.

The first confirmation of this will be seen if Nifty spot rises above 4947 on Monday, which confirms the bullish hammer pattern that Nifty made on Friday. Once this is done, the previous low of 4842 should not be breached - this is the stop loss for any longs now.

A rally to 4990 - 95 before Thursday is possible, but it may not cross and close above that level in this May expiry.

Subsequent to that, there might a fall to 4900 - 4910 level, and then a rise to 5055, which will be a key resistance. A cross and close above 5055, can take Nifty to 5185.

I seriously doubt if 5055 or 5185 will be crossed in June.

THE BEARISH VIEW WILL BE NEGATED ONLY ON A CLOSE ABOVE 5200.

I have a suspicion, a lot of bears will be trapped in the next couple of days, and then as always, a lot of bulls will be trapped again later.

I might be completely wrong, if Nifty cannot go above 4947 and keeps falling - but the risk: reward is in favour of being bullish for now.

ANOTHER ROLLER COASTER RIDE IN THE OFFING?

2010-05-16T17:04:00.003+05:30

Amazingly, Nifty behaved exactly as antcipated last Sunday.

Now, over the weekend, everyone is wondering - what next?

Everyone is now looking at the 200 DMA which is at 4981 as of today.

One hint regarding whether this level will be broken is generally given by Options data - and it seems bulls are intending to defend the 200 DMA at least for now.

Have an eye on the following levels:

4900 ce - 165 (current 200); if the level of 165 is broken decisively on the gap down on Monday, then 4981 might be tested.

However, there is a catch.

Someone is trying hard to prevent Nifty from going down in a hurry. Apart from the Options data, this is more apparent from something else that was noticed in the last few minutes on Friday.

NiftyBEES made a low of 507.6 (equivalent to Nifty 5076) and rocketted to a high of 518.25 (Nifty level of 5182) within a matter of 5 minutes almost towards the close. Moreover, this was with very heavy volumes of 12500 after 3.25 pm. Refer chart posted here.

This only means one thing - Nifty might again surprise everyone, by recovering from the lows next week, and might rise all the way to 5180 levels once by expiry.

All this sounds strange - but stock markets have a tendency to surprise everyone - on the downside, and also on the upside.

So, be prepared for another roller-coaster ride next week.

Keep an eye on 5026 on Nifty spot to start with and the 4900 Ce level given above, and then 4981 and also the NiftyBEES and you will know what the Nifty wants to do.

For long term investors, do not invest in Bharti right now in a hurry. Although it can give some fast upmoves, it seems to be going towards a good support of 232 soon, and if that is not held, then even 134 is possible, and then all the way down to 59!!

Do not invest in telecom stocks in a hurry!!

Correction starts -with a bang

2010-05-09T17:01:00.004+05:30

As has been mentioned on several occasions, Nifty could not close above the crucial 5350 - 5400 band and the month of April gave too many whipsaws - the market refusing to go down. This led many to believe that this will continue forever. However, one needs to be aware that a major contributor towards the rise in the Indian markets have been the FIIs.

Whenever the FIIs decide to sell, they are not bothered about the support levels and invariably, this leads to gap down openings in the Indian market. The major reason for this is the fact that DOW retraced exactly 61% of the crash of 2008 and could not close above 11300.

Although everyone is saying that the 200 DMA which is currently at 4961 will hold, I have my doubts. The 200 DMA being tested twice within 3 months (8th February and now) is not a good sign.

The market is in an oversold state right now, and there might be a rally to 5148 - 60 level next week. The best possible scenario is a rise to 5225.

As long as Nifty stays below these levels, it can start its downward journey and the next fall, can take it to 4766, perhaps in May itself. Nifty can be out of the woods only on a close above 5280 in May - which seems extremely unlikely for now.

The logical question in everyone's mind will be - where will this correction end?

I would not be surprised to see Nifty at 4200 or even 3790 some time this year - yes, in 2010.

NIFTY FOLLOWING LEVELS SO FAR

2010-03-15T07:59:00.005+05:30

Nifty has followed the road map charted a few weeks back and is at a very crucial resistance band.

5180 - 5220 is a band which will be extremely difficult to cross, in the same way that 5090 - 5110 acted as a support.

However, the fall might not be fast, since lots of traders are stuck with short positions and they will cover on every drop, thus supporting the market.

A close near the lower band - as close to 5100 as possible - will be an invitation for bears to attack overnight, taking Nifty below 5090.

As seen on numerous occasions, such levels are generally crossed only with the help of a gap down.

Time for caution to hold longs overnight, since bulls might run out of steam any day.

EDGE OF THE CLIFF

2010-03-09T19:13:00.003+05:30

The stage is set for the bears.

Will they? Won't they?......

They need to ensure Nifty gapping down below 5060, else be ready for a fightback.

AAL IZZ WELL.....Is all really well??

2010-03-07T11:27:00.018+05:30

A lot of people have a wrong understanding of the science and art of Technical Analysis.

Technical analysis is not a tool for prediction, like what astrologers attempt to do. TA takes help from historical data and shows what are the possibilities for the future. There are those who just follow the trend and and prefer to get stopped out, or there are some who pay heed to the various possibilities and take action in 'anticipation'. The former use TA only as a science and the latter understand the science behind TA and use their mental creativity as an 'art.

Hence, I always maintain that TA is a science and also an art!

It all depends on perception. It was this perception that did not allow any shorts till 4830 was being held before the budget, and the result is a 6% rally in Nifty in 4 days.

However, now, there are some roadblocks ahead. Although TA as a science says to be long, TA as an art suggests caution.

A glance at the daily chart shows a striking similarity between the chart when Nifty was 5310 and now. What happened after 5310 is known to all - whether the same will get repeated is something no one wants to even think of at this stage. The post budget rally has brought in a sense of euphoria and the market is HOT now. The bears are known to strike when the market is HOT.Is all really well??

If the similarity between the first week of January and now holds true, we might have already seen the short term top, or are very close to one.

The hourly chart also shows a lower top in Stochastics and also a sell on MACD, and hints that Nifty is headed down.

If Nifty cannot cross and close above 5115 - 5135 on Monday, it is safe to say, we are headed downwards.

Downwards to where?? Everyone knows the huge support at 5050 - 5070, and if the bears cannot break this intra day, they will try and do it overnight.

Below that, the level 4960 -70 is also a critical level, and if Nifty holds this level, it is safe to take longs again, with a stop of 4930 and stay long for this month!

An interesting combination to go long will be Nifty near 4970 and the leader near 980 once again.

It might sound funny that I am cautioning against fresh longs and advising possible shorts - especially when the US market squeezed the shorts on Friday, and FTSE of UK made a new 2010 high.

But yes - the risk: reward ratio is certainly not in favour of fresh longs at this red hot stage !

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ANNOUNCEMENT - A full day course has been planned - on the Science of Technical Analysis and the Art of trading stocks and Nifty futures - in Pune; The date is Saturday, 3rd April.

Those interested in more details can get in touch on the yahoo id timethemarket@ymail.com

FOLLOW CHARTS AND IGNORE NOISE.....

2010-03-02T20:59:00.008+05:30

As mentioned, the 2 key stocks that held the 200 dma outperformed the index by a long way - Tata Steel and ICICI Bank.

It is amazing how, if one just follows charts, and keeps the 'noise' out, a completely different picture emerges. I have heard many are still going short or averaging earlier shorts, believing that this is just a pullback rally. So what is it is just a pullback rally!

A rally is a rally is a rally; it is no untouchable that one is not supposed to trade long in it.There will be enough signals when this uptrend ends, to sell longs and go short.

The long call at 4870, with a stop of just 40 points is 150 points ahead, and a reversal will also be spotted within 30-40 points from the top, if not earlier. The 2 key levels that all will be looking at now are 5060 - 80 and 5160 - 5180; however, there is another important level which will come into play tomorrow - no, it is NOT 5050! If Nifty manages to cross this level smoothly, the writing is on the wall, and Nifty will follow the levels posted 2 weeks back - yes, who says the trend changes every day?

The low on Nifty spot today needs to be keenly watched, and if bulls manage to hold this well, bears are in serious trouble in this 'pullback rally'. It is too early to talk about the importance of the low today, and it will explained at an opportune time.

Amongst the key stocks, the 'leader' of the Indian stock market is fast losing its credibility and it has to do something as early as tomorrow - readers will know which stock is being referred to; and a 3% rise is expected in this stock sooner rather than later.

So, ride the uptrend till it lasts and be ready to sell and go short.

You can get 'live' updates on

http://twitter.com/ap_pune or

http://twitter.com/TimetheMkt

A full day course is being planned - on the Science of Technical Analysis and the art of trading Nifty futures - in Pune; The tentative date is Saturday, 3rd April.

Those interested in more details can get in touch on the yahoo id timethemarket@ymail.com

Bulls on ventilator support

2010-02-21T19:30:00.005+05:30

Apologies for the long absence, will be updating regularly now.

It has always been observed that once the 200 dma is crossed upwards comfortably (in April 2009 this time), the market invariably comes down sooner or later to test the 200 dma.

As is said, bulls live above the 200 dma and bears live below it - however, these are testing times for bulls, and they need to utlilise all ammunition at their disposal - for survival above their lifeline.

The job is that much harder when some key stocks have settled below the 200 dma.

A quick check shows that Bharti, Rcom, Hindustan Unilever have settled well below the 200 dma, Reliance, ONGC, SBI and NTPC are just below the 200 dma, but for more than a week now. Bulls have very little ammunition left!!

Out of the index heavyweights, only ICICIBank and Tata Steel have managed to survive above the 200 dma.

This doesn't augur well for the near future, unless the key stocks go well above the respective 200 dma very soon.

Looking at Nifty - after making the low of 4675 very close to the 200 dma, Nifty managed to claw back upwards, however, bears became active again near 4830 and 4930.

A glass can be seen as half full or half empty.

Looking at the optimistic side - after managing to hold the 200 dma, Nifty took a pit stop at 4830, and another at 4930.

Now, without going below the low on Friday. Nifty needs to cross 4950 fast and close above it. Bulls seems to have some backing from the international cues, with the DOW closing well on Friday and Nikkei futures were trading at + 190 around 11pm on Friday IST.Hang Seng has been battered and bruised and one can expect the bulls in Hong Kong to retaliate on Monday morning.

The indication is that we should have positive cues from Asia on Monday morning, and it needs to be seen, if these positive cues are enough for Nifty to cross 4950, which is just 2.2% away from current levels.

If 4950 is crossed successfully, I would not be surprised to see 5150 - 5170 in February, maybe on the day of the budget.

If 5200 is not crossed, by Friday, it opens a big window of opportunity for bears - and we shall see what they intend to do next weekend....

However, MISSION 4950+ first.

Why brokerage houses hate us.....

2009-11-23T21:16:00.002+05:30

Just 3 calls........says it all......

5th November ---- Buy 4800 ce near 75, sl 60, booked at double in a few days.

18th November--- Buy 5100 pe near 75, sl 60, booked at double in 2 days

20th November --- Buy 5000 ce near 40, sl 30, still holding at 125!!!

No wonder brokerage houses hate us, since their clients hardly trade, but still make money.

It is more surprising that some traders also hate us, saying number of calls are less; but.....

just imagine the above trades starting with 1 lot.....

4800 ce (75 x 1 lot) - Rs. 3750 becomes Rs 7500

5100 pe (75 x 2 lots) - Rs. 7500 becomes Rs. 15000

5000 ce (40 x 7 lots) - Rs. 14000 becomes Rs. 43750, and still counting.

Add timethemarket@ymail.com on yahoo messenger and stop trading for your broker to earn money and stop trading every day.

Final frontier?

2009-10-19T22:30:00.005+05:30

It is amazing how Nifty, after crossing the 61.8% Fibonacci retracement level of 4789, has managed to go further ahead thus creating a huge barrier for any fall in the future. Let us see what has happened to the other 2 indices Nifty Junior and Nifty Midcap 50.

Nifty Junior crossed this 61.8% level (9539) last week and has closed well above it (10003.8). Next in line is the Midcap 50 index, and a look at this chart gives an hint as to why action has mainly been in midcaps and not the main index stocks. Nifty Midcap 50 index is currently at 2642, and the 61.8% retracement level of the 2008 crash is at 2857, still a clear 8% away.

It would be safe to say now that the action in midcap stocks will continue till this level of 2857 is crossed.

It needs no Einstein to predict which stocks should be on one's radar - yes, the Midcap index constituents.

Readers can take a pick from the list from here

http://www.nseindia.com/content/indices/ind_niftymidcap50list.csv, and enjoy the ride to beyond 2857.

That does not mean, other stocks will remain sideways - this is just an attempt to identify the ones that are more likely to rise more in the near future.

Chart of Nifty Midcap 50 attached.

DIWALI DHAMAKA

2009-10-16T21:25:00.006+05:30

I guess bulls want to prove me wrong when I said this might be a month of consolidation.

If Nifty futures decisively crosses 5150 and stays above it, it has a clear 220-230 points path to travel.

Who better to lead this lap than the leader himself - Reliance Industries. On crossing 2240 decisively, RIL can go to 2375 - 2400. Some other targets -

Tata Steel - 612
DLF - 533
Powergrid - 127
ICICI Bank - 4 digits

As I said in my last post, bulls are systematically raising the bar (support levels).

Once they crossed 4790, they created a base at 4850, then 4920, and now 5070. It will need some real bad fundamental news, or some disaster to break such strong levels.

I also mentioned, after the red Diwali of last year, bulls would like to celebrate in style this year.

The platform is ready, the stage is set, and bulls are just waiting for the director to call...lights, camera, action.......once the BIG B of the Indian stock market - RELIANCE INDUSTRIES crosses 2240.

Is this is a dream? Cannot be, since, it is just 9.30 pm and I am wide awake.

Month of consolidation

2009-10-13T21:14:00.002+05:30

Nifty respected the crucial level of 4920 - 4930 by opening well above it on Monday, and shook off intra day bulls who were trying to trade with tight SLs and marched away to glory to close above 5040.

However, options data for this month suggests that bulls want to consolidate either for the full month or at least a few days, and might be also playing games with bears, who start going short merrily on a fall of 20 points, to get trapped later.

Those familiar with the sport - High Jump in athletics, will draw a similarity with what Nifty is doing for the past few weeks / months - raising the bar (support level), and creating fresh supports almost every week.

Stocks to watch - RIL again - a close above 2225, can target 2375, HUL above 295 can target 305 - 312 - 322 and ITC going for 282.

ON THE EDGE OF A CLIFF ?

2009-10-13T21:06:00.004+05:30

NIFTY is at a do-or-die level and standing on a cliff. As seen from the chart, the low on Friday was bang on the trend line right from the March 2009 lows, from where this rally began.

Bulls have a huge task on their hands right now, and they will try to protect this level with all their might. Interestingly, 2 main index heavy weights – Reliance Industries and SBI are also poised at extremely critical levels.

NIFTY has to cross a big hurdle at 5000 – 5010 first and then close above 5040 to ensure safety of the uptrend.

The DOW has helped on Friday night by closing above an important level, and NASDAQ has a logical target of 2215 (2139 now).

After having done all the hard work over the last 7 months, Nifty needs to protect Friday lows on a closing basis, to head for the logical targets of 5175 – 5250 – 5295 and finally 5545.

The Vidhan Sabha elections in Maharashtra will not help bulls, since a holiday in between with global markets working, leaves our markets vulnerable for a gap down.

Keeping all this in mind, Nifty needs to close ABOVE 5040 tomorrow. If it fails, traders would be advised to remain light before the holiday and take a fresh look on Wednesday.

It was quite a forgettable DIWALI for bulls in 2008. Will they make it sweet in 2009? The next few days will have an answer to this question. Watch RIL and SBI over the next few hours.

THE SEPTEMBER BEAR IS DEAD………WILL THE OCTOBER BEAR GET ACTIVE NOW?

2009-09-24T22:04:00.003+05:30

The fierce upmove late today has taken everyone completely by surprise, but as usual, I am a bit cautious.

I am not sure that the rise was due to action by bulls, and would like to think that this rise was purely due to short covering. How else can one describe ICICI Bank cash on NSE which was trading near 850, suddenly jumping to 890 for a brief moment and within minutes, the high registered was 927.6 !! The volumes in that 1 minute bar when ICICI Bank jumped from 850 to 890 were 2,22, 180 shares! Why would any bull buy at this rate, in such a big quantity? Was it plain short covering? Moreover, the 840 September ca never went above 20-22.

Keeping all this in mind, I feel the rise today was only engineered by bears (short covering).

I am reminded of a similar event in July 2007, when on the last day of that settlement, Nifty had closed near highs, 4624 and on the first day of the August 2007 settlement, market had crashed (Nifty was down 3.8%).

Are we in for something similar tomorrow, well, I would not be surprised.

NIFTY HAS NO FEAR OF HEIGHTS..ONLY US HUMAN BEINGS HAVE IT

2009-09-21T19:24:00.007+05:30

Attached is a long term chart of Nifty, right from its inception.

We CANNOT impose our WILL over the market and must learn to understand what the market is intending to do. What better tools than charts to do it. Moreover, Fibonacci retracements are very easily forgotten, and people concentrate on the shorter term and ignore the broader picture.

In the shorter term, yes, market is overbought, has run up quite a bit............so WHAT......says Fibonacci.

From the attached chart, which I repeat, was pointed out a few times earlier, Nifty has crossed the all important 61.8% retracement level of the crash of 2008, and I had explained last week, how the same level of 4780 - 90 was attacked a number of times by bears over a couple of days, and bulls took it way above this level to safety. The level of 4920-22 was also important as mentioned last week (although not as important as 4780-90).

However, Nifty was smart enough to cross that level and close well above 4920.

This cushion of 1-1.2% above 4920, will act against any weak global cues over the long 3-day weekend, and in the event of a gap down open, bulls can step in at this level. If they fail, they have another big support level at 4860, and THEN, finally the all important long term level.

In spite of any weakness, I feel (saying again), we might not see 4780 - 90 again........(ever????....time will tell).

If we have a gap down open, and 4920 is held, that is a good stop for longs, if it fails. buy lower, with a stop loss of 4850. I see an expiry close near 4950ish levels. One can create positions in October series, and I see 5295 or even 5540 in October.

Long term targets for Nifty remain............hold your breath.........8010=====>>>>10110=====>>16190........difficult to believe, yes, for me too!!!

I still feel, Gold will fall, and equities the world over will rise (I can hear a lot of people chuckling :)

We must remember, no high is high in a bull market, and no low is low in a bear market. It is only us humans who have fear of heights, not the market!!!