The last rally was 545 points from 5196 to 5741. This comes to 545 points. From 4720, equality will be achieved at 5265.
Anything above this has bullish implications.
Wednesday, August 31, 2011
Sunday, August 28, 2011
Technicals for the Week
The markets lost another 2 pc during the week to close at 4748. The picture is looking gloomy all round. What does the market bring for us the next week?
1. Anna Hazare fast is over and Ben Bernanke Jackson Hole meeting did not bring any nasty surprises. Expect some bounce next week.
2. The Elliot wave analysis states that we are in last down move of the 3rd wave down.
C wave so far.
Wave 1 - 5944 - 5196 = 748 points
Wave 2 - 5196 - 5741 = 545 points
Wave 3 - 5741 - 4796 = 945 points and ongoing
Wave 3 can be sub - divided into 5 waves
Wave 1 from 5744 - 5454 = 190 points
Wave 2 = 5454 - 5552 = 98 points
Wave 3 = 5552 - 4946 = 606 points
Wave 4 = 4946 - 5198 = 252 points
Wave 5 5198 - 4720 = 478 points and going on
Wave 3 has traversed a distance of 1024 points.If it extends to 138.2 pc of wave 1, target would be 4707.
If it extends to 161.8 pc then the target would be 4530 which is also near to the November 2009 bottom of 4538.
3. A bounce from these levels would last for 3-4 weeks and can go up to 5110, 5230 and 5350. Only a close above 5550 would signal a fresh bull run.
4. All bounces should be used to go short, Longs only above 4900 for short term trading.
5. The Weekly RSI is at a critical support area over the last 20 years. So, a bounce is due.
6. Trend line shows above 4867, the downward trend of this fall gets broken.
7. The 5 week low ema comes at 4959, a close above this shows end to the down move.
8. RBI may hike rates just 1 last time on September 16th. The next week is a truncated one and expect muted trading.
9. The Channel resistances come at 4881, 5038 and 5296.
Now, is the time to start preparing a shopping list and beginning to buy.
1. Anna Hazare fast is over and Ben Bernanke Jackson Hole meeting did not bring any nasty surprises. Expect some bounce next week.
2. The Elliot wave analysis states that we are in last down move of the 3rd wave down.
C wave so far.
Wave 1 - 5944 - 5196 = 748 points
Wave 2 - 5196 - 5741 = 545 points
Wave 3 - 5741 - 4796 = 945 points and ongoing
Wave 3 can be sub - divided into 5 waves
Wave 1 from 5744 - 5454 = 190 points
Wave 2 = 5454 - 5552 = 98 points
Wave 3 = 5552 - 4946 = 606 points
Wave 4 = 4946 - 5198 = 252 points
Wave 5 5198 - 4720 = 478 points and going on
Wave 3 has traversed a distance of 1024 points.If it extends to 138.2 pc of wave 1, target would be 4707.
If it extends to 161.8 pc then the target would be 4530 which is also near to the November 2009 bottom of 4538.
3. A bounce from these levels would last for 3-4 weeks and can go up to 5110, 5230 and 5350. Only a close above 5550 would signal a fresh bull run.
4. All bounces should be used to go short, Longs only above 4900 for short term trading.
5. The Weekly RSI is at a critical support area over the last 20 years. So, a bounce is due.
6. Trend line shows above 4867, the downward trend of this fall gets broken.
7. The 5 week low ema comes at 4959, a close above this shows end to the down move.
8. RBI may hike rates just 1 last time on September 16th. The next week is a truncated one and expect muted trading.
9. The Channel resistances come at 4881, 5038 and 5296.
Now, is the time to start preparing a shopping list and beginning to buy.
Sunday, August 21, 2011
Markets Next Week: A bounce due
The Markets continued their downward journey last week. They fell by around by 4.5 % to close at 4845. Gold hit new all-time highs. So what next?
1. Gold has broken all previous all-time highs and is now trading at 1850 dollars and ounce or close to 28000 rupees levels. I would wait for a dip before making a fresh entry. I foresee a short term top close by. Make o mistake, in the next 1 year gold will go much higher but in the short term we may see a buying climax.
2. The Nifty is in the 3rd wave down which will culminate some time next week.
C wave so far.
Wave 1 - 5944 - 5196 = 748 points
Wave 2 - 5196 - 5741 = 545 points
Wave 3 - 5741 - 4796 = 945 points and ongoing
Wave 3 can be sub - divided into 5 waves
Wave 1 from 5744 - 5454 = 190 points
Wave 2 = 5454 - 5552 = 98 points
Wave 3 = 5552 - 4946 = 606 points
Wave 4 = 4946 - 5198 = 252 points
Wave 5 5198 - 4796 = 402 points and going on
After this, we will have the entire retrace of fall from 5740 - 4796 which can be a 500 - 600 point rally on the Nifty.
3. The Retracement levels of entire rise from 2252 to 6338 come to 4777, 4295 and 3812 levels.
4. 4690 - 4740 were the previous highs in the rally which started up. So, this area can prove to be a support zone.
5. All the indicators are now touching levels last seen in Jan 2009. So, either we bounce in a day or two or go much deeper.
6. The 200 week moving averages were last broken sometime in Sept 2008. We are now testing those averages. A weekly close below 4930 spells gloom.
7. On the upside, 2 gaps need to be closed. 4946 - 4846 and 5323 - 5204.
In a nutshell, now is the time to prepare shopping lists and nibble at stocks. The Diwali shopping list which we prepared last Diwali can be a good starting point for stocks.
1. Gold has broken all previous all-time highs and is now trading at 1850 dollars and ounce or close to 28000 rupees levels. I would wait for a dip before making a fresh entry. I foresee a short term top close by. Make o mistake, in the next 1 year gold will go much higher but in the short term we may see a buying climax.
2. The Nifty is in the 3rd wave down which will culminate some time next week.
C wave so far.
Wave 1 - 5944 - 5196 = 748 points
Wave 2 - 5196 - 5741 = 545 points
Wave 3 - 5741 - 4796 = 945 points and ongoing
Wave 3 can be sub - divided into 5 waves
Wave 1 from 5744 - 5454 = 190 points
Wave 2 = 5454 - 5552 = 98 points
Wave 3 = 5552 - 4946 = 606 points
Wave 4 = 4946 - 5198 = 252 points
Wave 5 5198 - 4796 = 402 points and going on
After this, we will have the entire retrace of fall from 5740 - 4796 which can be a 500 - 600 point rally on the Nifty.
3. The Retracement levels of entire rise from 2252 to 6338 come to 4777, 4295 and 3812 levels.
4. 4690 - 4740 were the previous highs in the rally which started up. So, this area can prove to be a support zone.
5. All the indicators are now touching levels last seen in Jan 2009. So, either we bounce in a day or two or go much deeper.
6. The 200 week moving averages were last broken sometime in Sept 2008. We are now testing those averages. A weekly close below 4930 spells gloom.
7. On the upside, 2 gaps need to be closed. 4946 - 4846 and 5323 - 5204.
In a nutshell, now is the time to prepare shopping lists and nibble at stocks. The Diwali shopping list which we prepared last Diwali can be a good starting point for stocks.
Friday, August 19, 2011
Support Levels at 4800-4850
I expect 4800 - 4850 to hold and a bounce from there. Time to buy Selectively and only the blue chips.
4800-4850 has a confluence of supports and is an area ripe from which there can be a bounce.
4800-4850 has a confluence of supports and is an area ripe from which there can be a bounce.
Thursday, August 18, 2011
Investing in Gilt funds
The equity markets are tanking, so where does one invest in?
I had tried to do a bit of study on the funds and the pros and cons of investing in them. Below is a guest post, I had done for Subhankar.
Continue Reading at:
http://investmentsfordummieslikeme.blogspot.com/2011/08/good-time-to-feel-gilty-guest-post.html
I had tried to do a bit of study on the funds and the pros and cons of investing in them. Below is a guest post, I had done for Subhankar.
Continue Reading at:
http://investmentsfordummieslikeme.blogspot.com/2011/08/good-time-to-feel-gilty-guest-post.html
Sunday, August 14, 2011
Markets: What next?
The markets lost a further 2.7 pc to close down at 5073. This is on the back of further negative news from Europe and US, a sharp spurt in Gold prices, good IIP numbers and FII selling.
1. The FIIs have sold almost 11000 crores this year ad 7000 crores in the first fortnight of August. The DIIs have picked up almost 20000 crores of shares this year and about 6000 crores in August. The market is down about 17 pc YTD. It is clear that the market dances on FII tunes. If the rupee weakens and the FIIs pull out cash, the market will go down.
2. Gold has given a breakout and is a buy on dips. As the currencies of the world weaken and the debt crisis increases, gold will go up.
3. SBI had a poor set of numbers. The NPAs are increasing and also the Rate Hikes look set to continue. Avoid the autos and the banks.
4. We had good IIP numbers and yet the markets fell. Why was this? This is because good growth means the RBI can hike the rates further to tame inflation and afford to sacrifice some growth.
5. Looking at the Elliot Waves, we are C wave from 5944
Wave 1 was 5944 - 5196 = 748 points
Wave 2 was 5196 - 5741 = 545 points
Wave 3 was 5741 - 4946 = 795 and ongoing.
Wave 3 should end this week and get set for a rally of about 450-500 points on the Nifty.
6. The band 4750 - 4900 has a confluence of supports and should hold for the present moment.
7. The gap area of 5204 to 5323 will act as a strong resistance. This gap getting filled up is the first sign of a bounce.
8. Open Interest points out to support at 5000 levels and resistance at 5200 and 5300 levels.
Strategy for the Week:
Historically for the past few months, the markets bounce towards end of expiry and hence cut shorts around the 5000 levels and be prepared for an expiry around the 5200 - 5300 levels.
1. The FIIs have sold almost 11000 crores this year ad 7000 crores in the first fortnight of August. The DIIs have picked up almost 20000 crores of shares this year and about 6000 crores in August. The market is down about 17 pc YTD. It is clear that the market dances on FII tunes. If the rupee weakens and the FIIs pull out cash, the market will go down.
2. Gold has given a breakout and is a buy on dips. As the currencies of the world weaken and the debt crisis increases, gold will go up.
3. SBI had a poor set of numbers. The NPAs are increasing and also the Rate Hikes look set to continue. Avoid the autos and the banks.
4. We had good IIP numbers and yet the markets fell. Why was this? This is because good growth means the RBI can hike the rates further to tame inflation and afford to sacrifice some growth.
5. Looking at the Elliot Waves, we are C wave from 5944
Wave 1 was 5944 - 5196 = 748 points
Wave 2 was 5196 - 5741 = 545 points
Wave 3 was 5741 - 4946 = 795 and ongoing.
Wave 3 should end this week and get set for a rally of about 450-500 points on the Nifty.
6. The band 4750 - 4900 has a confluence of supports and should hold for the present moment.
7. The gap area of 5204 to 5323 will act as a strong resistance. This gap getting filled up is the first sign of a bounce.
8. Open Interest points out to support at 5000 levels and resistance at 5200 and 5300 levels.
Strategy for the Week:
Historically for the past few months, the markets bounce towards end of expiry and hence cut shorts around the 5000 levels and be prepared for an expiry around the 5200 - 5300 levels.
Saturday, August 6, 2011
Broad Picture: What the coming months hold for us?
Its been a scenario of doom and gloom all across the world the past week. As the Financial Markets bleed, doomsday predictions are announcing the coming end of the world. Lets see what the future holds for us.
Crystal ball gazing has always been difficult.Some things are apparent now. The US will no longer be the superpower it once was. Its influence is on the wane. It is a gradual process, buy say in about next 20 years it will no longer be as dominant as it once was.
They say every century belongs to a country. Earlier,it was the British who ruled the seven seas on the back of its fleet and industrialization. Before that we had the French and Spanish domination.
Printed paper or currency is losing value. Mindless printing of currency notes has eroded the buying power of the US Dollar. Precious Metals like Gold and Silver are the new safe havens.
Downgrades of US AAA Rating means it would be difficult for US to borrow from the world at the same almost zero interest rates.
Europe is in doldrums of its own. After Greece and Ireland, now Spain and Italy are on the verge of default. The future of Euro is under question.
With the 2 major currencies of the world, the Dollar and Euro having a major question mark against their name, gold emerges as an alternate currency.
Domestically, the car sales are slowing down, the housing sales are down and the economy is slowing down
The tell-tale signs are all there. You have new launches like the Volkswagen Vento being pushed at 6.99 % Interest Rates. We keep getting smses from builders imploring us to buy their flats.
The good part is the sharp drop in oil prices. This means no more fuel hikes in the short term.
Looking at the big picture, the cycles of boom and recession have shortened. India does not get into recessions, since it is a booming economy we experience what is known as a slowdown.
The focus now would be on government policy making to bail us out. If we see good reforms then Indian Markets would do well.
For now, we are firmly in the downtrend. Expect support around Nifty 4800 and Sensex 16000 levels.
That is the time, when we buy good strong companies that have survived precious slow downs and come out stronger. Till then, we wait and bide our time.
Enjoy the Rains and keep buying Gold, Gilt funds and small quantities of good stocks.
Crystal ball gazing has always been difficult.Some things are apparent now. The US will no longer be the superpower it once was. Its influence is on the wane. It is a gradual process, buy say in about next 20 years it will no longer be as dominant as it once was.
They say every century belongs to a country. Earlier,it was the British who ruled the seven seas on the back of its fleet and industrialization. Before that we had the French and Spanish domination.
Printed paper or currency is losing value. Mindless printing of currency notes has eroded the buying power of the US Dollar. Precious Metals like Gold and Silver are the new safe havens.
Downgrades of US AAA Rating means it would be difficult for US to borrow from the world at the same almost zero interest rates.
Europe is in doldrums of its own. After Greece and Ireland, now Spain and Italy are on the verge of default. The future of Euro is under question.
With the 2 major currencies of the world, the Dollar and Euro having a major question mark against their name, gold emerges as an alternate currency.
Domestically, the car sales are slowing down, the housing sales are down and the economy is slowing down
The tell-tale signs are all there. You have new launches like the Volkswagen Vento being pushed at 6.99 % Interest Rates. We keep getting smses from builders imploring us to buy their flats.
The good part is the sharp drop in oil prices. This means no more fuel hikes in the short term.
Looking at the big picture, the cycles of boom and recession have shortened. India does not get into recessions, since it is a booming economy we experience what is known as a slowdown.
The focus now would be on government policy making to bail us out. If we see good reforms then Indian Markets would do well.
For now, we are firmly in the downtrend. Expect support around Nifty 4800 and Sensex 16000 levels.
That is the time, when we buy good strong companies that have survived precious slow downs and come out stronger. Till then, we wait and bide our time.
Enjoy the Rains and keep buying Gold, Gilt funds and small quantities of good stocks.
Sunday, July 31, 2011
Game Changing Week possibly ahead
The coming week is rife with multiple possibilities. The Deadline for US Debt deal is August 2nd and any delay out there could spell doom for the markets. Lets explore all possible Technical and Fundamental Factors.
1. I had a look at the Elliot Waves and they paint a somewhat bleak picture in the near term.
Assuming the rise from 2252 to 6339 was Wave 1 and Wave 2 started in November 2011.
Wave 2 will be sub divided into A, B and C.
Wave A was 6339 - 5177 = 1162 (November beginning to Feb beginning a period of 3 months)
Wave B was 5177 to 5944 (Feb beginning to April end a period of almost 3 months) and Wave C commenced from end of April.
C -1 was 5944 - 5196
C - 2 was 5196 - 5740
C -3 on going
If this is the case then C-3-2 will end soon and the dreaded C -3-3 will start with a massive gap down.
A Wave was about 1200 points so C can be 1200-1800 points giving targets of 4200 and 4800. This will be the buying opportunity of a life time.
2. India Infoline is coming up with Debentures offering up to 11.9 % interest per annum. A small exposure can be considered.
3. Gold is sustaining at new highs. In case of a sharp dip when debt deal gets announced, it would be a buying opportunity.
4. The 5500 - 5700 Range has been broken giving a target of 5300 as first target. 5400 would be a support area and shorts can be covered here and fresh shorts taken on bounces.
5. Event based trading is always difficult and one should always trade hedged.
1. I had a look at the Elliot Waves and they paint a somewhat bleak picture in the near term.
Assuming the rise from 2252 to 6339 was Wave 1 and Wave 2 started in November 2011.
Wave 2 will be sub divided into A, B and C.
Wave A was 6339 - 5177 = 1162 (November beginning to Feb beginning a period of 3 months)
Wave B was 5177 to 5944 (Feb beginning to April end a period of almost 3 months) and Wave C commenced from end of April.
C -1 was 5944 - 5196
C - 2 was 5196 - 5740
C -3 on going
If this is the case then C-3-2 will end soon and the dreaded C -3-3 will start with a massive gap down.
A Wave was about 1200 points so C can be 1200-1800 points giving targets of 4200 and 4800. This will be the buying opportunity of a life time.
2. India Infoline is coming up with Debentures offering up to 11.9 % interest per annum. A small exposure can be considered.
3. Gold is sustaining at new highs. In case of a sharp dip when debt deal gets announced, it would be a buying opportunity.
4. The 5500 - 5700 Range has been broken giving a target of 5300 as first target. 5400 would be a support area and shorts can be covered here and fresh shorts taken on bounces.
5. Event based trading is always difficult and one should always trade hedged.
Sunday, July 24, 2011
Nifty: Technicals for the Week
The Markets ended up 52 points on the Nifty thanks to a stupendous rally on Friday. The coming week is important because RBI policy announcement on Tuesday, then important Results to come, F&O expiry and then US Debt Crisis Resolution. Lets take a bird's eye view about the Technicals.
1. The Markets are still trapped in a range. I see a break out happening above 5700 or below 5500. Till then its a range bound market with a negative bias not withstanding the Friday rally.
2. We run into a the downward trend line joining the tops from 6339 at 5660. We need at least 3 closes above this to declare a breakout.
3. The 200 DMA comes in at 5718. There is a cluster of resistances from 5650-5720 to clear.
.
4. Let us look at Elliot Waves. Assuming,
Wave 1 was 6339 - 5177
Wave 2 A was 5177-5944
Wave 2 B was 5944- 5195
Wave 2 C can be till 5962
This is the alternate count.
Preferred Count is
Wave 1 6339- 5177,
Wave 2 5177-5944,
Wave 3 5944 - 5195 and ongoing which can be subdivided into
Wave 1 5944- 5195, Wave 2 ongoing. This count could be invalidated above 5944.
5. The Standard indicators are all in Downward momentum and its is an Option Writer's market.
6. Looking at fundamentals, I feel this is the last rate hike. Reason is growth is slowing down, Inflation is showing signs of being tamed.Also, I have been noticing that Banks have been very stingy in hiking Fixed Deposit Rates. This means that they expect Rates to come down within next 6 months. The Reverse Repo rate is already at previous highs. The Repo Rate last time went till 9 % and now is at 7.5 % so, we are approaching the end of Rate Hike cycle.
7. The entry into Gilt funds or NCDs of India Infoline at 11-11.5 % Rate of Interest is a good entry point now.
8. Gold has been very bullish and technically is looking awesome on the charts. Buy the dips and year end I feel we could see 1800-2000 dollars.
9. I am confident the Debt Ceiling will be raised soon and there could be an initial breakout or false breakout soon.
Trade hedged and trade light.Expect volatility the next week, and expect some big bang announcement next weekend.
Supports at 5500, Resistance at 5700
1. The Markets are still trapped in a range. I see a break out happening above 5700 or below 5500. Till then its a range bound market with a negative bias not withstanding the Friday rally.
2. We run into a the downward trend line joining the tops from 6339 at 5660. We need at least 3 closes above this to declare a breakout.
3. The 200 DMA comes in at 5718. There is a cluster of resistances from 5650-5720 to clear.
.
4. Let us look at Elliot Waves. Assuming,
Wave 1 was 6339 - 5177
Wave 2 A was 5177-5944
Wave 2 B was 5944- 5195
Wave 2 C can be till 5962
This is the alternate count.
Preferred Count is
Wave 1 6339- 5177,
Wave 2 5177-5944,
Wave 3 5944 - 5195 and ongoing which can be subdivided into
Wave 1 5944- 5195, Wave 2 ongoing. This count could be invalidated above 5944.
5. The Standard indicators are all in Downward momentum and its is an Option Writer's market.
6. Looking at fundamentals, I feel this is the last rate hike. Reason is growth is slowing down, Inflation is showing signs of being tamed.Also, I have been noticing that Banks have been very stingy in hiking Fixed Deposit Rates. This means that they expect Rates to come down within next 6 months. The Reverse Repo rate is already at previous highs. The Repo Rate last time went till 9 % and now is at 7.5 % so, we are approaching the end of Rate Hike cycle.
7. The entry into Gilt funds or NCDs of India Infoline at 11-11.5 % Rate of Interest is a good entry point now.
8. Gold has been very bullish and technically is looking awesome on the charts. Buy the dips and year end I feel we could see 1800-2000 dollars.
9. I am confident the Debt Ceiling will be raised soon and there could be an initial breakout or false breakout soon.
Trade hedged and trade light.Expect volatility the next week, and expect some big bang announcement next weekend.
Supports at 5500, Resistance at 5700
Wednesday, July 20, 2011
Chart of the Day: Bollinger Band Contraction
Bollinger Band contraction means breakout or breakdown coming. Check out the last time when they contracted before breaking down. Watch 5709 and 5521 closely. Break of either implies good movement in either direction.
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