Saturday, October 30, 2010

A week worth OBSERVING, Highest ever Volumes!

Last week the complex correction continued on Sensex in form of Wave [iv] as shown on daily chart
Things to note from the week: The combined turnover in the futures and options segment and cash segment on the two premier bourses--the NSE and BSE-- was at Rs 2.82 lakh crore, up by Rs 46 crore compared to the previous record of Rs 2.36 lakh crore seen last month only.
It was worth observing the tick by tick movement on Nifty and Sensex given the volatility in last 1 hour of trading! Nifty moved down by almost 80 points in less than 2 minutes at 3 pm. The fall was co-ordinated across various securities in index like - SBI, ICICI, TCS, Infosys, Suzlon, etc. This can be as a result of program trading where the basket of stocks in huge volumes were sold within few seconds. This is just a guess, no one knows what exactly happened. Flash Crash that happened in US market where DJIA fall by almost 10% in 1 day in first week of May still remains mystery to everyone. Even the exchanges and watch dog of US market cannot conclude with convictions what could have caused it
It was also worth observing that Nifty November expiry future was trading at an astonishing premium of almost 80 points. Where were all the arbitrators then!!! The premium can be attributed to heavy rollovers and fresh long buildups in November series but still this figure is worth noting
As we said last week, Key support level over coming week lies at 19800, this level was only breached momentarily on Friday before index bounced back and closed above psychological mark of 20,000. Correction looks complete with Friday's low and we expect rally to start now. A close below 19750 - 19800 would require addional downfall before we turn up!

Monday, October 25, 2010

Power & Respect for 123.6%!

We marked on Sensex on 27th September that wave [iii] should end near about 123.6% of wave [i] given the significance of this fibo level in Indian Markets
This is precisely what happened. This level of 123.6% * Wave [i] was tested on 4th,6th, 13th & 14th October and prices failed to close above this level which is at 20700 and started retracement in form of wave [iv]
We have been bullish on Sensex since it broke above 18250. The major rally of final wave 5 is also over but over short term basis we still have enough room for upside rally.
Daily chart shows that RSI took support on upward trending trendline and Sensex completed minor wave (iv) of wave 5. We have either started wave (v) that will take us atleast till all time high of 21500 or shall start soon after one minor dip.
Key support level over coming week lies at 19800. As long as this level is intact we remain bullish and shall move up atleast till 21500, ALL TIME HIGH!