Nifty Weekly Technical Outlook for 18 Jan’16

Bumpy road ahead???

Passed two weeks remained superficial for hardcore bears and nightmare for bulls and current global as well domestic scenario clearly indicates that going ahead road is going to remain bumpy only-no smooth ride. As markets continued to slide down and down and ultimately Sept’15 & Dec’15 swing lows are also taken out. Now how far can we go, as I already started hearing about 6300 and few of my bear friends also mentioned about sub 5500 levels, do you heard that? Anyway it is common phenomenon, whenever such erratic moves happen you’ll start listening some extreme views from extremist, whoever it is Bear or Bull. In such turbulent times let’s see whether we should go contra or join the hands in existing carnage

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nifty weekly analysis 18 jan 2016

Nifty Weekly Technical Outlook for 04 Jan’16

2016 – Will you going to surprise us???

Markets always surprise us, don’t you think so? Up till 2013 nobody was sure where market is heading, and in March’14 Nifty gave breakout which was a like dream run for any hardcore bull, rally which continued for almost a year, and only ended in March’15 after clocking an all time high of 9119.20. In last 9 months from highs Nifty is down over 17%, but if we see couple of heavy weight stocks which are down significantly and trading near 52-week lows, so structurally there are lot of divergences. Rather delving into forecasting let’s see how objectively we can position our self in near future.

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nifty weekly outlook 04 jan'16

Nifty Weekly Technical Outlook for 28 Dec’15

Merry Christmas..Welcome 2016….

Last two weeks remained action pegged and I was not in position to update due to some personal commitments and also one of the reason that after looking at screen for long-long hours your body starts giving you a red signals, so I took some mandatory leave from watching screen. Rather making it long, lets keep it simple and see how to position ourselves in the coming week.

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NIFTY CHART 24 DEC

Nifty Weekly Technical Outlook for 14 Dec’15

When Global worries, Domestic logjams dictate the market….

At this point our markets are majorly dictated by two major concerns, one we already know for long time now i.e. Fed Policy Rate Hike which they are postponing from very long period, and now it is almost certain that they may move ahead, and on the domestic front passage of GST Bill which Opposition party is not allowing to pass through. In the first case we are totally dependant and can’t do anything about it, but in the second case we can have some hope (although, very less). It is very difficult to comment that market has already factored in such news and worst is going to get over sooner then later, but rather let’s see what technical analysis is suggesting and how to position yourself in the crucial week.

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NIFTY ahead of Fed meet

Nifty Weekly Technical Outlook for 07 Dec’15

Moderate start..Unexpected end

Often when start is good (in our case it was moderate), expectation increases that everything is going to be as per plan, and when actually it ends in line with our expectations, it gives feeling of satisfaction, but when it does not fructify according to the plan then the feeling of devastation is much higher than feeling of satisfaction. Essentially my point is, in the beginning of last week when markets attempted to move higher, I thought it will move according to expectations, but on Wednesday market gave one shock and thereafter it took U-turn. According to my experience and understanding it becomes difficult for particularly traders to change their gears and take quick U-turn with market; I know many traders would agree with me. Let’s analyze and see how to place ourselves in the coming week.

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nifty outlook for 07 dec onwards

Nifty Weekly Technical Outlook for 30 Nov’15

Don’t be Intolerant in stock market…

Over the time people build preferences and they never realizes that when their preferences turned prejudices, rigidity or stubbornness. Similarly in the stock market people would like to call them as Hardcore Bull or Bear, in hindi we call them as Tejiwale & Mandiwale, like my friends call me hardcore bull. How these prejudices build over a time is the topic to discuss at a length, but over the time I understood that, as a trader or even as a research analyst you should not be biased by any particular view, at all the time you need to remain objective, that does not mean that you should not have a view, but acceptance of change is very much essential, and if we put it in today’s perspective then you should not be Intolerant with changing dynamics of stock market.

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weekly technical view of Nifty 30 Nov'15

Nifty Weekly Technical Outlook for 23 Nov’15

nifty view 23 nov'15

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Nifty Weekly Technical Outlook for 16 Nov’15

An uninspiring start of Samvat 2072…

Just ahead of Muhurat trading session Govt declared FDI bonanza which gave fillip to market on Muhurat Day, but that was it after opening gap up market remained moreover lackluster, so no opportunity to book some marginal profits and on next day we opened straight gap down. At the face of it for me it was very Uninspiring Start of Samvat 2072, but rather being superstitious I would prefer to stay objective, and look for another opportunity, that is what my experience suggest me. So lets analyze and see how to position our self ahead of expiry.

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samvat 2072 nifty weekly report

The week passed by…

In the last week Nifty formed candle like Inverted Hammer or it can also be treated as Doji, nevertheless it indicates that selling pressure at higher levels and all eyes would be on weekly low (7730.90).

Once again technical structure of NF is stands at crucial juncture and if selling pressure may intensify then it may drop towards Sept low 7540.

I prefer to look at 14-period RSI and on weekly as well daily time it is clearly indicating to me that we are in a bear trap of the market, however considering oversold scenario of the market possibility of minor pullbacks can’t be overruled.

CNXPHARMA now NIFTY PHARMA reached to an extreme oversold condition and after 2-3% further correction, I am expecting some sharp rebound in Index that is what price history suggest, so keep tight watch on this index and try to grab opportunity here.

NIFTYAUTO witnessed profit booking in last session, as AUTO stocks were performing better in compare to others. Chart structure indicates that after 1-3% decline it may resume to move higher again, however let’s see what damage it can handle.

One chart strikes to me is NIFTYIT which is likely finish its round of correction in the coming sessions, as like other charts after blip of 1-2%, I expect some smart rebound here, keep fingers cross.

Lastly, if you see NIFTYBANK it is still holds above its last Monday’s low, whereas NF already breached below this level, exhibiting divergence between NF & BNF. If this continues then chances of recovery in NF becomes much stronger.

Derivative Insights

In the month of Nov till date FII’s remained consistent seller to the tune of 3743 crore, whereas DII’s are net buyer of 2378 crore.

Week on week basis FII’s have reduced NF long position of 28k contracts whereas added 38589 short contracts. If we see in stocks, they added just 5449 contracts and stock short contracts are 21282. (In compare to previous weeks reading position are almost same, just the quantum has changed)

On the options front they maintain 1:2 ratio where 25309 option contracts are long, while 51411 puts are long.  And opposite to it 52746 calls are short and almost NIL puts are shorted. Above observation clearly indicates that till date their bias is clearly negative and for every one long contract they are creating 2 short contracts or may be hedging parallel.

CALL PUT
8200 7,339,650 5,832,900 7700
8000 5,740,200 3,986,550 7800

On looking at NF options data maximum call interest lies at 8200 & 8000 strike price to the tune of 74 & 57 lac contracts. While maximum open interest in puts are at 7700 strike to the tune of 58 lac contracts and followed by 7800 strike 40 lac contracts.

Last week’s review – Technically, we are standing close to crucial support of 7850, so I expect any pullback towards these levels should be utilized for buying, don’t be so aggressive, but stay on long side, and on the upside 8120 will remain next resistance to watch for.  So, my expectations were thrashed by market –lesson I learnt is be objective, don’t get carried away by psychological expectations.

With fresh thought, current technical structure suggest me that we are standing near the junction, if bulls will fail to defend support area than bears will kick them in their next trajectory which opens big space for them. Level specific, NF has a support near 7670-7700 levels, if fails to hold above this level, then I think possibility of retesting of 7540 or moving further below can’t be ruled out. So until NF holds below 7950 levels I assumed to remain short in market, and start opening short below 7700 mark. Alternatively for Bulls to retain the confidence we need to close above 7950.

Nifty Weekly Technical Outlook for 09 Nov’15

Happy Diwali and Welcome Samvat 2072…

Diwali and New Year has always been a very special occasion for stock market and every market participants, and even for me. I would admit that today I am in market just because I saw Diwali of few punters in my society and got attracted towards market, (someday I’ll write about all those days). Samvat 2071 is going to end at similar juncture wherein from journey started-near to 8000 level, so statistically there is no gain or no loss year on year basis, but that is not the case, journey remained roller coaster, Nifty made a high of 9119.20 on 04th march’15 and made a low of 7539.50 on 08th Sept’15 and now we stand at 7950 levels. Let’s analyze what should be our strategy for near future.

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diwali report samvat 2072

Nifty Weekly Technical Outlook for 02 Nov’15

Tough challenge for small time traders…

From last Friday NSE has increased the lot size of most of the contracts, resultant we need to pay higher margin then what we use to pay. Still I don’t understand what is the logic behind increasing the lot size of Nifty from 25 to 75 (not 50 which was earlier when Nifty was trading near 6000-7000 levels). I feel it’s one of Freebie marketing strategy of NSE, wherein once trader get used to with trading in Nifty, now by force they are asked to pay higher margin or stay away. I was talking with couple of my trader friends and they are really feeling the pain of such move, and at the same time if we see condition of brokers (which is deteriorating day by day), they are further tensed about the business. There are some pros as well, where overleveraged positions by default will remain in control. Anyway, we need to stay in market and will be dictated not only by market movement but by this regulators as well. Lets analyze how to approach market in this week.

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weekly range of nifty

The week passed by…

It was disappointing week for longs and shorts must have enjoyed the ride, as in all five days markets closed in red. At the same time it was really tough time for intraday traders as market corrected but if we see Intraday opportunity remained almost nil, one need to carry the position then and then only one would have made money. Week on week basis Nifty was down by almost 230 points.

  • Technically once again Nifty drift below its 200-DEMA, which is not so healthy sign, and expected Golden crossover of its 50-DEMA also came to halt for now.
  • Nifty retraced almost 38% of rally started from 7540 level to 8336 level, if fails to hold here then 62% retracement support comes near 7850 levels.
  • NF has filled the gap of 8060-8225 and closed above it, and on moving above weekly high, it will target for another unfilled gap near 8322-8360 levels.
  • As depicted in attached chart 14-period RSI has trendline support above 40-level, lets see whether falling momentum got arrested or not.
  • In the last week biggest surprise or disappointment came in from AXISBANK, so as BANKNIFTY which dragged the market lower. However chart structure of BNF and NF remains moreover same.
  • Barring CNXPHARMA most of the Indices gave up their gains, while CNX PHARMA managed to hold little bit, so one may expect some positive momentum in the coming week, which may be used for Index rebalancing.

Derivative Insights

  • In the month of October FII’s have infused almost 3000 crore of capital, whereas DII’s remained net seller to the same tune if we just exclude last Friday’s buying which 1560 crore, so DII’s sold 1509 crore. The game changed in last week of the month were FII’s taken out 1289 crores from the market otherwise their net figure would have been much larger.
  • Week on week basis FII’s have not only reduced long & short position in Index  future but also in options as well.
  • I think FII’s data in respect to Index & Options needs to be reviewed in the coming week, because change in lot size needs to be adjusted. So we’ll be keeping watch over next week.

Last week’s reviewIn the last week I had not released the report but let me put previous week’s commentary here- allow NF to hold and sustain above 8250, if it does then stay put with long position and target for 8325-8350 levels.. area of confluence between 8350-8400, and my anticipation is that, this area will not be taken out so easily, so in the first go I would prefer to take the profit on table, and then evaluate for next move.

Current chart structure indicates underlying weakness, and again Bihar Election result will remain in focus. Nonetheless, immediate support for Nifty is placed at 8025-8050 levels which happens to be 38% retracement of last up move and where again NF will get some psychological support as well. What if it’s taken out, then I will be watching for 7850 to 7720 area. Look for long position if NF sustains above 8120 levels and again game changes on close above 8250 levels. As supports are placed near to current level, I don’t find lucrative to go short in the market, look for short on closing or sustenance below 8000 mark, keeping stop loss near 8050. At the same time long only above 8120.