Nifty Weekly Technical Outlook for 19 Oct’15

Nifty above its major average…

After almost fourty days of dilemma once again market is pouring hope in to the minds of trader. You must be thinking why I am writing this-yesterday one of my friend called me to confirm my view, first question was are we ready to for new highs?  And I was little shocked, and he gave one another shock is it possible by January or max by February? I understood that he is not asking, but he is conveying his own view, and I answered him what is your gut feeling, he said it is very much possible. In the hindsight I was thinking that just few days back traders were searching reasons of collapse, then what can come to rescue the fall, after stoppage again hope of revival and reasons to push the market higher. Its not the objective way, I think right way to approach the market, should always be focus on next possible area of confluence or area of least resistance. In this weekly report we’ll analyze and see how to approach the market, and stay on the right side.

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19 oct weekly outlook

The week passed by…

  • In the first three trading session momentum was appearing slightly bleak, however by Thursday & Friday wings turn on other side, and scenario start appearing optimistic. Week on week basis Nifty closed with gains of 48 points and formed candle Hanging man, essentially it tells us buying interest at lower levels, but at the same time we should take little caution as well.
  • Finally, NF closed above its major 200-DEMA after 36 trading sessions, which gives me little hope of recovery, and also 50 & 21-DEMA (8060-8080) is placed at lower levels to support the price on any minor correction.
  • 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.
  • Amongst the oscillators 14-period RSI is exhibiting strength, however I need furthermore confirmation from it, but as of now flow suggest bullish bias.
  • As depicted in attached, while drawing trendline from swing highs, we get two lines which and that is the area where NF is going to face utmost resistance, because this is the area above which underlying negativity may cooled-off and NF targets for higher levels.
  • Among other Indices, Bank Nifty appears to be prepared for next leg of rally, and chart structure of NF & BNF looks similar.
  • On Friday CNXAUTO has formed Star candle and now we need to see whether it turns out to be a Evening star, so keep watch of Monday’s closing, otherwise setup appears to be decent enough.
  • CNXIT disappointed the participants, or lets put it in right sense, major IT companies had disappointed market participants or Research Analyst community. Here once again I remember Ace Fund managers tweet

  • CNXMETAL after a flurry move in earlier week, turned quite in last week. So once again, better to take profits on the table, and wait for next move.
  • Keep watch on CNXMIDCAP, as such in last week was not much happening here, but it seems that next week can be action pegged here.
  • Structurally CNXPHARMA is forming Ascending Triangle kind of a formation, but mind you it is not always necessary that breakout comes on the upside only, it can come either side. To turn bullish wait for 13400 to cross.

Derivative Insights

  • Till date FII’s have infused more than 3100 crore of capital, whereas in just single day (Thusday) DII’s bought to the tune of 2744.55 and now for the month they stand at 2300 crore (sheer jump from negative to positive)
  • Week on week basis FII’s have cut there long position to the tune of 59386 contracts and to similar extent shorts are build 50932 contracts. It seems that institutions have done some profit booking or reduced their position to tune of 1452 crores.
  • Interestingly if we observe Options build-up of FII’s only, then they are long call options 91213 contracts and Put longs are reduced by 61934 contracts. At the same time they have unwound call shorts are build by 89469, while 46021 Put contracts are short build. Above points indicates little cautiousness, like last week FII’s are not very bullish on the market.

Last week’s review – I expect in this week markets are likely to remain highly volatile, as nobody will turn out to be clear winner. Level specific, NF on sustaining above 8225 will target of 8325 levels and may be it can target for 8390-8400, but sustenance near this level is a big challenge. On the downside supports are placed near 8100, and till NF holds above this level, I prefer to stay long if at all it corrects below 8000 then one think to create shorts, between 8100-8000 is neutral zone..  Weekly low for the NF was 8088.60.

As on Friday NF stands at 8238 and weekly high is 8246.40. On the top I had clearly mentioned that weekly candle suggest little cautiousness, so it is better to turn little skeptical, and allow NF to hold and sustain above 8250, if it does then stay put with long position and target for 8325-8350 levels, and if fails to do so then allow for some retracement upto  8150-8130, where one may take some risk and go long keeping stop loss below 8080.

In the attached chart I market big circle which is 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.

Nifty Weekly Technical Outlook for 12 Oct’15

They say there are two sides to everything. But there is only one side to the stock market: and it is not the bull side or the bear side, but the right side. – Reminiscences of a Stock Operator

Isn’t it a Golden Rule of the stock market. We all are stuck with our own prejudices, some are hardcore bulls and some are happy to be Bears of the market, but real trick is to stay on the right side of the market. Essentially it tells us to be objective and not to get drive away with your own biases. Honestly it is very difficult to follow this simple discipline in the market, but if we don’t follow this rule then most of the time you find yourself in a situation when you don’t have any convincing trade to take, and if at all you are taking then it will be by force but not by choice-now force could be anything, it can be your boss, it can be your own psychological compulsion to always stay in a market or may be something else. And now with experience I can surely tell you that if you are convinced about any trade then you are not taking trade but you are betting in a casino without knowing any rules of the game i.e playing Blind.And why to play Blind when you can correct yourself.  At Way2Profits my objective is always to play safe and conservative, as Money Saved is Money Earned, isn’t it.

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12 oct nifty view

The week passed by…

Monday turned out to be a fantastic day for bulls as NF moved strength to strength, but rest all four sessions kept market participants in skepticism, as volatility kept traders on their toes. If we see weekly candle then it clear indicates positive bias, but most of the gain came in from Monday’s move.

  • Technically speaking, NF managed to fill the gap 8060-8225 created on 24 Aug’15, but that’s it, it just filled the gap and turned back, as selling pressure near the highs dragged NF again lower.
  • As depicted in attached chart, NF is hovering near its 200-DEMA (8184), and incidentally when NF has opened gap down it broke the support of its 200-DEMA and when it is filling the gap it is standing on the brink of its average, which clearly indicates its importance. Historically, if we see then since from 2012 NF stayed below its 200-DEMA for maximum time of 40-days and till date we have completed almost 33 sessions, and even if we see previous price behavior than in that case also in last 5-7 trading session NF was hovering near the average, that is what we are doing at this point in time. Based on this hypothesis may be for next week NF may remain sideways, and eventually surge higher.
  • Bank Nifty is also facing resistance of its 200-DEMA, but it failed to fill the gap with slightest margin.
  • Similar is the case with CNXAUTO, which is struggling near its 200-DEMA and not filled the major gap.
  • But if we see CNX IT Index which is sustaining well above its 200-DEMA and it has filled the gap very early in the last month only. We should also not forget that INFY is going to announce its results on Monday morning, followed by other major companies, which will set the trend for coming sessions. Similar is the case with CNX PHARMA Index.
  • If we see on standalone basis then CNX METAL was the star performer of the week, forming excellent reversal pattern, but looking at structurally bear move of past, we should take this as dead cat bounce from oversold territory, and play only for short term bounce.

Derivative Insights

  • In the month of October FII’s have infused capital of around 1500 crore.
  • Week on week basis FII’s have built 188274 contracts in future Index, while only 7581 contracts are shorts. So they bought almost worth of 4031 crores.
  • Interestingly if we observe Options build-up of FII’s only, then they are long call options 90849 contracts and Put longs are only 66444. At the same time they have unwound call short options to the tune of (-) 34481, while 122657 Put contracts are short build. This clearly indicates bullish bias to me, as they are building not only long contracts but they covering their call shorts and adding further in put shorts.
  • Last week’s review – I would prefer to stay long only above 7950, stop should be placed below 7880, looking for upside of 8050 and if NF manages to sustain above 8050 then 8200 would be next level to watch for.  Expectations turned out to be in sacrosanct with market move

According to me, NF stands at a Inflexion point and that is the reason we are see such a high volatility in the market, because from here on one party will start dominating other. I expect in this week markets are likely to remain highly volatile, as nobody will turn out to be clear winner. Level specific, NF on sustaining above 8225 will target of 8325 levels and may be it can target for 8390-8400, but sustenance near this level is a big challenge. On the downside supports are placed near 8100, and till NF holds above this level, I prefer to stay long, if at all it corrects below 8000 then one think to create shorts, between 8100-8000 is neutral zone. I hope my point is clear; as mentioned in the beginning be on the right side.

Nifty Weekly Technical Outlook for 05 Oct’15

Finally much anticipated Rate Cut announced by RBI and once again it gave a big surprise to street by cutting 50 BPS, as 25 BPS was very much discounted by the market, also 50 points rate cut was not expected. We very well know that it’s positive for Equity markets, but does it managed to change the technical scenario at all? Let’s consult our charts and see whether RBI has set the tone for Bottom or not. To read full report you need to Register here (it’s free) and if you are already registered then there no need to register again, you’ll shortly receive newsletter.

05 oct nifty outlook

Finally week ended with gains of 82.40 points or 1%. Technically if we see Nifty not even manage to move above previous weeks high of 8021.60, as cluster of resistances are placed in the vicinity of 8020-8060 levels. As of now weekly candle indicates buying interest from lower levels, however moving forward it need to decisively close above the previous weeks candles.

If we see there is no much difference between previous week and last week, moreover prices remained in the same range.

Technically, Nifty is struggling to surpass and sustain above Gap area created on 24 Aug and for bulls it will be real challenge.

Last week’s review – it is always prudent that not to trade on the third day of any move for a continuation of that move. If you have a missed bottom or top three day move against the trend is normal movement, so wait patiently for Monday’s closing, meanwhile one may initiate longs for small objective with small stop losses, like buy above 7885 keeping stop loss below 7840 for smaller objective… If on Monday NF manages to close above 7950 then it may set the tone for further upside.  As expected Monday remained quite volatile and finally Nifty ended sharply lower. The way in which Tuesday market moved, hardly anyone would have got a chance to initiate longs, and lastly week ended exactly at 7950.

Even during the last week it was very clear that bullish tone will only set above 7950 and now we are standing exactly on that point. So I would prefer to stay long only above 7950, stop should be placed below 7880, looking for upside of 8050 and if NF manages to sustain above 8050 then 8200 would be next level to watch for. What if market falls below 7880, in that case don’t turn aggressively bearish, wait for a while. So let’s keep finger cross and see whether we manage to test 8200 levels.

Nifty Weekly Technical Outlook for 28 Sept’15

Jury is out to call for bottom

In last few sessions market reacted in unexpected fashion, when it was not expected that market may fall from highs-it does, when some follow through was expected market bounced back, and again remained moreover sideways to positive. Market is changing its gear very quickly, at one time you start the day expecting momentum to trigger and whole game changes to mean reverting and next day when you plan to do some mean reverting, for sure you are going to hit the stop losses. I am sure many of my trader friends would agree with me. After placing a low of 7540 there is a jury out to call for bottom or not, and from their talks none appears to be confident enough to take a call here, and so as I, however at the end of this report I will share my gut feeling with you, that is for sure.  To read full report you need to Register here (it’s free) and if you are already registered then there no need to register again, you’ll shortly receive newsletter.

chart of nifty way2profits

Nifty Weekly Technical Outlook for 21 Sept’15

In what state of mind market is??

Finally Fed decided to keep rates unchanged, so quandary does not end here, it keeps on going, now again after few days market will start speculating on it, but I think nonetheless this factor is already discounted. Coming on to our markets now we are speculating on RBI’s stance, whether they reduce the rate or not, and looking at price action it seems that traders are already betting heavily on interest rate sensitive stocks, and now waiting for things to actually take place. Our markets are on the path of maturing, but still it lacks liquidity & confidence. In the coming week expiry is lined up and speculation regarding rate cut, so how to position ourself in such a situation, lets analyze the facts and come to a conclusion. To read full report you need to Register here (it’s free) and if you are already registered then there no need to register again, you’ll shortly receive newsletter.

outlook on nifty for 21 sept onwards

 

Nifty Weekly Technical Outlook for 14 Sept’15

Please end the quandary

Last many weeks passed in a doldrums and jitters, wherein one day we were worried about China Yuan devaluation, and next day about war between South and North Korea, and now whether Fed will hike the rate or not? So finally in this week, we’ll come to know the status of Fed rate and to some extent decision of RBI will also be dependent on that.  Hope to end this quandary by this week.

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weekly nifty outlook 14 sept'15

Nifty Weekly Technical Outlook for 07 Sept’15

Bleeding Street…

I know most of my readers are traders and they can adjust their position with falling market as well, but out of all few are hardcore Investors as well and they are more concerned with their portfolios, as many of them must have accumulated stocks at higher levels, and now they are stuck. The whole market is bleeding because numbers of Investors are relatively larger then trader’s community.

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NIFTY DAILY CHART 05 SEPT

Nifty Weekly Technical Outlook for 24 Aug’15

Real Challenge

It seems that now situation is in favor Bear camp, honestly for them everything fall in place, because I am damn sure no Bears have expected such tumultuous situation which took place during last week. Global markets are under great uncertainty and currencies & crude are adding further vigor to it, in fact everything is interconnected and you can’t speak one in isolation. All in all now it is a Real Challenge for Bulls – Bulls are all those guys who are already long in the market, some are with their prized savings (Investors, Traders), some are with others savings (Mutual Funds) all are going face tough times. So let’s for next week how trader should position themselves keeping ongoing chaotic situation.

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nifty chart 24 aug

Nifty Weekly Technical Outlook for 17 Aug’15

Happy Independence Day

Momentum is not the only trade…

Last week was another super challenging week for all of us, Monday-Profit Booking, Tuesday-Sell-off continued (Parliament logjam), Wednesday-Yuan worries, Thursday-CPI data came and gave minor relief, and lastly Friday-WPI and hope of another rate cut and reschedule of Parliament session. So by Wednesday people started talking about sub 8000 levels and suddenly on Friday hope of new highs. Now it becomes a fashion to drive by momentum, you’ll see very rare talks about standing contra to momentum, as fear of failure may take front seat while speaking anything contra. So let’s see whether we should go contra or join hands with momentum.

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outlook on nifty 17 Aug'15

Nifty Weekly Technical Outlook for 10 Aug’15

Markets in confused mode…

I always believe that reading market is an art, as you are trying to read the mindset of mass which includes smartest of smart guy and dumbest of all, but ultimately crowd gets segregated in broadly two category, one camp who has Bullish bias and another with Bearish Bias, there is another group of people who likes to keep mum but relatively number could be small, as compulsion of trading would not allow many to step aside (even though they knows the fact). So we have mass divided broadly in two categories-but what if, both groups get confused? Neither Bulls are ready to take charge, nor Bears are aggressive enough. It seems that currently Nifty is passing through such phase and nobody is clear to take firm stand. Let’s try to analyze and see where the probability of winning is favorable, that’s what we can do, rest market will tell us whether our assumptions went right or not.

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NIFTY WEEKLY OUTLOOK 10 Aug 2015