Tag Archives: CNX IT Index

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 and Bank Nifty Technical Analysis for 06 Nov’13

Nifty as on 05 Nov’13– 6253.15 (-64.20)    Bank Nifty as on 05 Nov’13– 11498.90 (-115.20)

Nifty made a high of 6342.95 just shy of few point to test and post new high on Muhurat Trading Day. Generally, on Muhurat day we don’t see much momentum and that is the reason Nifty traded in a narrow range.

Nifty Daily Chart

On Tuesday, in pre-opening session market traded much lower and which gave a idea that market is going to remain weak during an intraday. Technically speaking, Nifty has marginally broken long trendline, while one minor trendline is still valid, but if we see Sensex chart than it has given break down from long trendline. After sharp move momentum is weakening and which was quite obvious. Bank Nifty made a fresh high but could not sustain and gave away major gains, in support to that CNX IT Index is also weakening and we can’t resist to make a statement that we anticipate some sharp fall in the IT Index.

So, we have early sign of weakness. Risk takers can take fresh shorts if Nifty struggles to hold above 6250 levels, we may take short position below 6230 with stop above 6250. Don’t forget its early signal.

Keep visiting Way2Profits, for unbiased Daily view on the Nifty and Bank Nifty.

Nifty and Bank Nifty Technical Analysis for 31 Oct’13

Our readers must be thinking that we are taking a back foot, but actually we got stuck in some unwarranted circumstances, and that is the reason we could not publish yesterday.

Yes, we got tapped by Big Boys, and let us admit that frankly, we are passing through some real dilemma on personal level, because by no way market seems to be Bullish to us, even we leave aside fundamental scenario of the market, but technically and applying market psychology, this market doesn’t seems to be Bullish, and it is just the Big Boys who are dragging the market.

Our reader turned good friend of ours informed us that there is malicious activity happening around, and there is a fare chance that market can move also higher. Thank You. Even there are few other readers who regularly keep check on us and sometimes share their view, which keeps us alive and give real nerves of the market. If you wish you can also come and share your view.

Finally, month end, expiry end and it’s really difficult to gauge where market is heading. Bank Nifty who helped Nifty to soared higher, now turn sideways, similarly CNX IT Index is also not performing. In simple words, we think it is really difficult to judge the market at this juncture, and we prefer to excuse for time being, and may start rethinking, as we are not missing something. If you think, we are, then please come ahead and open our eyes, it our sincere request.

Keep visiting Way2Profits, for unbiased Daily view on the Nifty and Bank Nifty.

Nifty and Bank Nifty Technical Analysis for 17 Oct’13

Nifty as on 15 Oct’13– 6089.05 (-23.65)    Bank Nifty as on 15 Oct’13– 10389.30 (-275.95)

We don’t know whether to prove us right or whether to prove us wrong, market is the best judge and price is supreme, and our readers and subscriber knows that we always try to remain genuine with our work.

When market is looking positive, you don’t bet on going short, if you are going then you must have big pocket, or else you are just speculating. We sincerely, believe that market has a potential to test 6229 levels. Now, see how market works, it opens gap up and remained positive for a while, and then start giving up the gains, in simple words we can call this move as pullback, and suddenly market starts plummeting sharply and still you don’t dare to go short (because, your underlying thought is- market has a potential to go high) and your prove wrong. Similar was the case with Bank Nifty.

Continue reading

Nifty and Bank Nifty Technical Analysis for 15 Oct’13

Nifty as on 14 Oct’13– 6112.70 (+16.50)    Bank Nifty as on 14 Oct’13– 10665.25 (+43.10)

Nifty and Bank Nifty both moved in a very tepid range through out the day, whereas CNX IT surged higher. Technically speaking, Nifty neither is confused at higher level, which is signified by small real candles on the chart, neither conclusively moving higher nor lower. So, for sure there will be huge round of volatility in days to come.

Betting for higher level is bit riskier at this place, we know that, but till we get any confirmation we should stick to our nifty view and look for long trades only. Dilemma is, may be upside is limited and risk to downside is equal, taking long call is tricky now.

Bank Nifty Trading Strategy

Our bank nifty view is optimistic and expecting at least 11+ levels. Let’s see.

Keep visiting Way2Profits, for unbiased Daily view on the Nifty and Bank Nifty.

Nifty and Bank Nifty Technical Analysis for 10 Oct’13

Nifty as on 09 Oct’13– 6007.45 (+79.05)    Bank Nifty as on 09 Oct’13– 10335.00 (+193.50)

Does this was anticipated by anyone?

Frankly, we anticipated that market will open gap down and trade with weak bias, but this smart engulfing move was nevertheless, was expected by us. But, let us admit that, we have one smart reader who is sharing his view with us has already informed us on 10.27 A.M that he is anticipating a rally. Let us put in his own words.

“I m expecting again 6021 . 😉 but yes if  my real-time studies supports it. 5996(future) seems to be the first target”  (For privacy purpose we are not sharing his name)

Hats Off To you Sir…

Nifty opened gap down, and started recovering quickly, same was the case with Bank Nifty. It seems that CNX IT which was the major driving factor for the market.  At this juncture market is moving in such a way that taking any call has become real tough.

Nifty Trading Strategy

As we mentioned in last article that Nifty is expected to move lower, and if it does not than it is one more trap.  Now, obviously market is heading towards 6142 to retest the last month high.

Bank Nifty Trading Strategy

Bank Nifty has few more hiccups to move higher, but looking at price action it seems that it will continue. Initial resistance we see at 10650, above which it sets tone for testing September month high of 11219. Keep watch on it.

Keep visiting Way2Profits, for unbiased Daily view on the Nifty and Bank Nifty.