Monthly Archives: May 2015

Nifty Weekly Technical Outlook for 01st June’15

Good is Bad or Bad is Good

Or Buy on Rumors & Sell on News

In last couple of weeks all good news are being sold off and bad news are welcomed. I was reading this article on Business Standard Net profit of Nifty firm’s halves in fourth quarter which was indicating that particularly last quarter was not good enough for most of the company, and if we see few odd examples of like SBIN & Reliance which posted good result, however stock price reacted adversely, while M&M which actually disappointed on results front were up significantly, now on Monday we need to see how L&T reacts to its numbers. The whole idea of writing above point is that, gradually our markets are heading towards maturity, and it also challenges team fundamentalist that you opinion is at stake, and if you don’t see beyond the boundary then one day you opinion will not matter much.  Anyways, let’s focus on our work and see how we should approach the market in the coming week.

Nifty weekly technical outlook for coming week 01 june 2015

  • In earlier three weeks Nifty managed to close and sustain above its previous week’s close, while in the last week Nifty ended marginally lower in compare to previous week’s close i.e. previous weeks close was 8458.95, whereas in last week Nifty closed at 8433.65. At the same time Bank Nifty and CNX Midcap both closed higher than previous week’s close.
  • Technically, Nifty will face stiff resistance near 8490-8500 levels, once it manages to cross and sustain above this level, it opens window for further upside. Since after posting a new high of 9119.20 on 4th March’15, Nifty is consistently forming lower peaks and troughs, but after forming a low of 7997.15 on 07 May’15, series of lower highs and lower lows is broken, now Nifty has formed one higher high and higher low and once swing high of 8490 will be taken away existing trend will get some more strength, because of Short covering rally, and few conservative group of market participant will start looking market will bulls eye.
  • Should it happen then where Nifty may head towards? Chart suggest that once swing high of 8490 will be taken away bull ride would not be so swift, as it is likely to struggle between 8525 to 8570 level as depicted in attached chart, where it has breach over falling trendline drawn from the highs, but if bulls manage to take out this particular level, then it will be clear breakout and may add another 200 points to rally.
  • As mentioned above Bank Nifty closed above previous weeks close at 18721.35, and once previous weeks high of 18755 will be taken out it may rise towards 19000-19200 levels.
  • The chart of USDINR – 63.7360 is suggesting that still it has scope to depreciate futher, and which adds to worry, as it is consolidating after steep rise, and not gave up, so if it starts to rally then it may create headache for Nifty Bulls.

Reader of my newsletter very well knows that I was quite vocal about my bullish bias since from 8000 levels and I was very much expecting rally in the market. As of now, to me charts are suggesting that stage is set for further rally in the market; however RBI policy will detect further tone of the market. So how I will position myself, I would prefer to remain bullish in the market keeping stop loss below 8270 on closing basis, for the upside target of 8550. On the upside if Nifty manages to sustain above 8550 then if opens window for another 200 points, at least 8750.  Interesting derivative data is suggesting broad range of 8000 to 8700-8800 levels, so traders may even look for Strangle and Straddle for better returns.

Nifty Weekly Technical Outlook for 18 May’15

Silence before the Storm…

After a long time market entered into a phase where neither Bulls are making money nor Bears, only we have to assume that some smart people are exceptional (but I am even skeptical about them also). The way in which market was behaving during last week, with killing volatility it became real difficult to take any call and stand by with it. But nevertheless, we’ll try out best to find out or at least how to position our self in such a indecisive market.

In the last week I asked myself why anyone should subscribe to my idea or newsletter, and only answer I can give is If you want unbiased and neutral and thoroughly researched outlook, then you can certainly subscribe to our idea, because I am not concerned whether you are generating brokerage for me or not, or I am not concerned whether you like my straight forward opinion or not, so if you feel comfortable subscribe here to get our weekly newsletter in your mailbox, and if you are already subscribed then chill…

nifty between the two lines way2profits

Nifty Daily Chart

Broadly market is very much expecting rate cut and it can’t be overruled that market participants may have already discounted that possible positive trigger, but if on 2nd June RBI disappoints and does not announce any rate cut then the reaction may turn out to be disastrous. Let’s keep fingers cross.

Current BJP government has completed 1 year, and then now experts have started scaling the performance on their Ruler and now market has divided clearly in three groups, One group which is not at all satisfied with the Government in control (number may be small), second group who are satisfied with the performance (again number may be small), and lastly third group who believes that (or may be an optimistic believers) still some time needs to be given, as things take time to come on ground, here proportionately number could be large, again it is my own gestimate, you may differ with me, and I fall in between second and third group category. Anyways, essential point is whether efforts taken by Government is sufficient enough or not, and I kept answer upon you, and you may feel free to reply.

Technically, couple of things which needs to be noted, first extreme volatility as India VIX reached to 21.90 levels and in last session slightly cooled-off. Nifty formed Rising Three kind of Candlestick formation pattern (not in its purest form), which is a Bearish continuation pattern, but pattern get negated subsequently. Nifty remained engulfed by prior week’s price move, i.e. neither high of 8355 is not tested nor is low of 7997.15 taken out. So on weekly closing basis Nifty formed Doji candle and remained engulfed, reflects indecisive tone of the market.

Now Nifty is holding above its 200-DEMA which is currently placed at 8190 level, but holding below its 50-DEMA (8438), here bears of the markets are expecting some Death Cross over in days to come.

Similar to Nifty, Bank Nifty also remained engulfed by prior week’s move, but classic difference between two is, Bank Nifty closed marginally higher, and especially some buying interest was witnessed in PSU banks, which helped Bank Nifty to show some strength, and also it is on the verge of giving breakout from falling trendline. With this CNX Auto Index has also shown some strength in last few sessions.

Last week, we discussed about Rupee, which gave a breakout from consolidation, but USDINR moved marginally higher posted a high of 64.37 and cooled-off in last three sessions, settled at 63.43, which rescued the overall sentiment of the market.

Now based on above observations, how you should position yourself. Once again I reiterate that I don’t see any fundamental shift in the economy, and in fact if we see economic data which is improving on a gradual note. Technically, we are placed at an inflexion point where taking decision is extremely difficult. Nifty is placed between the two lines as depicted in attached chart; breakout in the direction will drive the further trend, so I would be keeping close eye on 8355 on the higher side and 8090 on the downside. Micro management of your position should be based your risk profile and your understanding of market, if you ask me I am buyer at current level and even somewhere upto 8140-8120 levels, keeping stop loss below 8090 (ideally stop loss should be kept on closing basis, but with this volatility if may prove hazardous).

Nifty Weekly Technical Outlook for 11May’15

Optimism is the faith that leads to achievement. Nothing can be done without hope and confidence. – Helen Keller

Last week was quite a challenging week for hardcore bull, in fact from last four weeks markets are in control of bears, and it is very much prominent that they are still in control. But important psychological shift which I observed during last week was that now all Big Boys are started downgrading Indian markets, so called fundamental opinions have reduced their weight-age over Indian markets, and they are looking support for the market anywhere between 7500 to 7000 levels. What a paradigm shift in their confidence and sudden change in outlook; I don’t think there is any fundamental shift we are witnessing in the markets.

Let’s start week on an optimistic note and flow with the trend.

technical  analysis chart of nifty for week 11 may

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