Tuesday, August 30, 2011

Nifty broke above strong resistance line!!!

The rally looked strong yesterday and continued strength might result into further short squeeze. Aggressive traders please cover your short positions for now as Nifty has broken above the downward sloping trendline that has been acting as a very strong resistance since the fall that started from 5700 levels.
A strong positive confirmation is obtained as Nifty closed above 4900. We might be now headed towards 5100-5200 levels. Time cycles are also supporting this positive development. 4820 is now crucial support which should not be breached atleast for 1 to 2 weeks. Movement above 5200 will suggest significant bottom might be in place.

Wednesday, August 24, 2011

Nifty 15 days cycle turning up!

Nifty 15 days cycle:

Nifty 15 days cycle is still working very well and indicates further upside plausible atleast this week.

Nifty rallied in yesterday’s session to relieve the extremely oversold condition. We now expect the short term trend to continue up atleast till 5100 levels. As we have shown the important resistance blue line, a break above this line will be crucial for any further move up. Failure of prices to penetrate this line today or latest by tomorrow might result into move down back below previous lows.
We have shown the path of Nifty to be in the form of a triangle. We are not expecting a steep move up over medium term but the current rally to extend maximum till 5200 levels. After that we should have consolidation phase to form a base for future direction.
In short, our bias is positive over short term as long as 4850 is not taken out on downside. The current move can extent till 5100 – 5200 levels and nature of rally over next 2 days will provide important information.

Wednesday, August 17, 2011

Nifty failed to sustain any move up yesterday…Next support level is near 4950!

 Nifty Daily chart:
Nifty 30 mins
Nifty continued to drift lower yesterday and failed to rally along with global peers. This raises the odds that Indian markets are still moving independent to the world markets.
Failure of Nifty to retrace even 38.2% retracement of the entire fall increases the odds that the down move is not complete. We might have started wave 5 down now which will take prices below previous low of 4950.
Nifty Daily chart shows that the current down move is moving within a downward blue channel very well. ROC looks to be near oversold state and so we do not expect very deep correction but the bias still remains down.
In short, we expect prices to move below 4950 towards 4800 zone as long as 5150 level is not taken out on upside. Any rally above 5200 might take us till 5321 levels.

Sunday, August 7, 2011

World at a Glance! Serious breakdown in developed world financial markets!!!

Global Markets:

World Markets: A glance of the above charts show that there is some serious capitulation in developed world equity markets. DJIA–US, FTSE-UK, DAX-Germany, Nikkei-Japan show steep selloff not seen for years. The steepness of fall itself indicates we are into something bigger and probably move down below 2009 lows in these markets. This can be the start of next impulse leg down in developed markets and Asian market cannot be insulated for too long from such falls atleast when everything is turning down together. The magnitude of fall might be less in Asian markets but the above charts convey scary picture over short term!

 Nifty Daily chart
 Nifty 30 mins:
 Given the meltdown in global markets, Nifty opened a gap down of 120 points. The selling accelerated as we were expecting.
Nifty opened at 5200 levels the long held support convincing the day traders that a bounce back should happen from there but we expected increase in selling pressure and those levels should not hold. Nifty than started cracking making a low of 5117 and rallied back during latter part of the day to close back to the previous support now resistance level of 5200 – 5220.
Wave counts are clear and we have either completed minor wave iv or shall do it in a day or 2 after which we will move down below 5100 levels. The next support levels that we expect come in at 4800 below 5120.
Daily chart shows that ROC still has plenty of room to move down and we are not oversold yet. The oversold condition on intraday chart is relieved by the rally back from 5117 to 5200 on Friday itself. It is common tendency for traders to think that market cannot fall so steeply and so it should bounce back but we can see from global charts that buying based on this thinking would have resulted into a state of ruin.
Daily chart also shows a clear formation of Head & Shoulder pattern and the neckline is now decisively broken with a gap. This indicates the long period of distribution that took more than a year might be finally over and next trend which is down has started.
In short, we maintain our outlook of extreme weak internals as of now and there is no positive divergence seen. The fall looks far from over and rating downgrade of US markets from AAA status (since 1941) to AA+ by S&P might act as a catalyst to this global selloff.
We again reiterate “Volatility is going to increase in either direction and movements are going to be steep. We want our readers to exhibit caution and have alternate scenarios in place in case market moves in opposite direction than anticipated. Risk management and Money management is extremely crucial to remain in the game.”
As long as the gap between 5320 and 5230 is not filled we remain bearish for a target near 4800.

Friday, August 5, 2011

Nifty Failed at crucial Supports! Next support 5150 / 4800

Nifty Daily
Given the strong capitulation across the globe and failure of Nifty to find supports at crucial levels indicates extreme weakness.
The trend now remains firmly down, next support levels coming in at 5150 and 4800!
As long as today's gap near 5330 is not filled one cannot expect any bullish setup. Only if Nifty manages to move above 5330 the trend might turn positive but that looks very low probability as of now
Volatility is going to increase in either direction and movements are going to be steep. We want our readers to exhibit caution and have alternate scenarios in place in case market moves in opposite direction than anticipated.