Nifty closes bang on Support of 4750, Dow up 200 points & Reliance's results a tad below analyst's estimates

It would be very heartening for every bull to see DowJones up 200 points after such a bad expiry of October Future contracts but Reliance's results could be a dampener for tomorrow, although its results are just a tad below analyst's expectations but it could open down. In these Q2 results, all the companies which have reported good results & above street's estimates have been given a big thumbs up! for eg: M&M, Wipro and all those companies which reported lackluster set of results have been battered by markets for eg: Bank of India


Nifty View:

Nifty has closed on a very crucial support level, as i have been saying that 4750-4800 seems like a very good support, it has also given intraday bounces from these support levels but couldnot hold on to the small rallies. If this support of 4750 is not violated on closing basis we can see a small bounce back uptill 4880-4900, this could give an opportunity to traders who have bought stocks at lower levels to book profits

DowJones view:


DowJones has bounced back sharply around couple of hundred points from the previous close. I have been saying that DowJones may find good support around the trendline, however it did close below 9800 yesterday but the very next day it bounces back sharply. The closing below 9800 had to be on regular basis to confirm that we have broken a strong trendline but this was not the case this time



Stock Views:

Charts of Bank India & HDFC are posted below, charts are self explanatory







Have a nice trading day

Regards

Ankit

Markets rally sharply from support levels of 4750-4800 only to be crushed by bears again from higher levels of around 4860

Markets witnessed a rally of 60-70 points from lows of 4780 around to 4860 levels, after that this rally got punctured by bears and Nifty was again down to same level where it started from. Bears are still in full control, supply is seen at around higher levels, but that doesn't mean you should not buy at all. Start creating a portfolio and buy on dips in a staggered manner and do not buy everything at one go.


Nifty view: It remains the same as 4750-4800 will act as a good support so shorts must be covered at around these levels and invest your first part of total amount that you are planning to invest in the long term. Tomorrow is an expiry day so markets will remain volatile, so intraday traders should keep a note of it and trade safely


Stock View: Allahabad Bank

Allahabad bank has taken good support from the nearest trend line and has bounced back sharply from the low of 116.30 so one can buy with a double stop loss of116




Stock Review:

Few days ago i recommended to buy Excel Info around 69-70 if high volumes support the stock move. the stock has moved up sharply around 13 % in a falling market.

BEFORE


AFTER



Have a happy Triple Witching day!! Trade cautioulsy

Regards

Ankit

Finally 4900 is broken and that too with record volumes

Markets saw a sudden fall due to hawkish statements by Reserve Bank of India. Hawkish statements by RBI indicate that the central bank is ready to take aggressive steps to curb inflation and aggressive step may also include rising key interest rates.

Meanwhile RBI has announced an hike of hundred basis points to 25 % in SLR ( Statutory Liquidity Ratio ) which means that banks has to park more funds as cash, gold or G-sec ( Government securities) with RBI

NIfty view: Nifty after breaking the crucial level of 4920-4950 has been precariously placed at a very good support around 50 day moving average and now the move will depend upon the unknown causes or circumstances that may take place.



Stock view:

Divis Lab

The stock that entered into parallel channel in the month of May has a very good support at around 475 levels ( the lower trendline ). Long term investors should start accumulating the stock from the 500 odd levels






Have a happy trading day

Regards

Ankit

Today was one of the trading days on which u would wish to be not in midcap stocks

Midcap stocks took a beating today and the CNX Midcap was itself down 1.6% & its most popular stocks like Punjlloyd, RNRL, IvrclInfra & JSW steel down anywhere between 5-10%. This will become a routine if markets come down sharply, so to be on a safer side use trailing stoplosses as holding midcaps in your portfolio can bring down your portfolio's networth by 15-20% even if markets only correct by 5-10%

Stock markets may be eagerly awaiting the RBI credit policy that is to be announced tomorrow around 12 pm, so watch out for any " HIKE " word used by CNBC anchors or market's reaction would be self sufficient. Even if there is a no change policy which is expected from RBI, then markets have to deal with weak global cues too. So in all tomorrow could be a highly volatile day so intra day traders should keep a note of it and trade safely.

Nifty View:

NIfty view remains the same as yesterday, still to break the obvious support of 4920-4950. 4961 was the level from which Nifty bounced back and went up 70-80 points but could not hold on to the gains and eventually rally fizzled out


Dow Jones as i post at 01:00 is down 100 points and there is still half an hour for U.S markets to close. After making a high of 10072 it is down couple of hundred points from the top i.e after opening 100 points up it is 100 points down, technically it is a very weak signal. Now the major support for DowJones comes at 9800 (( kindly see chart ))


Stock view: Aban

A lot if people will be looking to buy this stock on declines as it has risen from 220 odd levels in March to 16oo odd something in September i.e a stupendous return of 800% in 6 months ( 1600% annual), so this stock is a favourite among traders and investors. It was down due to poor results so enter this stock slowly and slowly and invest at each support level.




Have a good trading day!

Regards

Ankit

The party will get over below the obvious support of 4920-4950, watch out for these support levels very closely

After the eventful weekend full of news starting from extended market timings to DowJones falling over hundred points to SEBI warning exchanges of terror funding activities( to India loosing to Australia :( in a cliff hanger ), its time to analyze markets for the next week

Nifty View:



Stock View: Raymond stock needs to bounce back from crucial trendline support levels to
remain in a channel which it is maintaining since June 2009



Stock View: ExcelInfo
Though not much trading data is available for the above given stock but a falling
wedge pattern is seen in this stock, so buy it with caution & only for risky players



Will give a detailed update during this week on what will be the effect of extended market trading hours


Have a nice trading day!

Regards

Ankit

It hurts when you have created a short position in Indian Markets and the next thing you see in the night is that U.S Markets are up 1%

After the big trend line breakdown you would want Nifty to remain weak but what if u see the very next day that all Asian & U.S markets up 1% each. In this case if at all it happens then use gap up to create more short position with a stop loss above that trend line resistance.

At this point of time DowJones is trading at 1 % higher or 120 points higher, the picture may or may not be same at the closing ( people might know how Dow Jones fell yesterday within half an hour) and there is also no guarantee of Asian Markets giving a bumper opening and taking cues from Dow Jones. Meanwhile Dollar index has stopped its continuous loosing streak and it has bounced back a bit


Stock View: Union Bank

It can be bought in two parts, first around 264 and another around 250 with a strict stop loss of 235 on closing basis




Have a nice trading day

Regards

Ankit

If election results can give markets a 20% upmove in a single day, then any major upset in election results can lead to a correction too

Election results are to be announced for 3 states viz Maharashtra, Haryana and Arunachal Pradesh in the next 24 hours. Congress won in the last assembly elections held in these states, any major upset for Congress in these states can lead to a healthy correction in Indian Stock Markets which will eventually cool off the already overbought markets.

Nifty view: Today markets exactly turned from trendline support of 5050 level which was mentioned in the blog yesterday, after touching a low of 5051.65

Now nifty may turn in bearish mode if it closes below 5050 for 2-3 days with huge volumes because if it closes below 5050, it will violate the trendline which it is obeying since March 2009 and has taken 6 times support from that trendline

Nifty chart is observing a rising wedge pattern which in simple terms is a bearish pattern on charts, so trade with trailing stop losses


Dollar index view: Dollar is weakening against all major currencies of the world as a result of which dollar index is falling down everyday. Euro has touched a new high of 1.5$ i.e 1 Euro = 1.5 $, which was languishing around 1.3$ six months ago, so a major appreciation has been seen in euro against the dollar. Dollar index is now approaching support levels of 74-74.5$ so if it bounces back from these levels, U.S markets are then bound to correct sharply



Have a wonderful trading day!

Regards

Ankit

Who knows who was trapped today, was it a bull trap or a bear trap?

We will definitely know tomorrow the answer of this question, as the movement in index after 2:00-2:30 many a time decides the fate of the opening of the next trading day & one T.V channel also has a specific program that airs after 2:30 and is called 2:30 factor. But today what we saw was not normal, NIfty future after building a strong base around 5090-5110 started its upmove with huge volume and erased all the losses. After 2:45 there was a strong retracement of the entire upmove with equally huge volumes and made a new low. This indicates a trap for either a bull or a bear


4920-4940 is no more a trendline support





Stock Views: GTL Infra




Have a happy trading day

Regards

Ankit

Cash is a depreciating asset, but sometimes it may be worth sitting on some cash rather than being fully invested in any asset class

"In simple words we can say that depreciation is the reduction in the value of an asset due to usage, passage of time, wear and tear, technological outdating or obsolescence, depletion, inadequacy, rot, rust, decay or other such factors." - Wikipedia

As markets right now are trading at P/E ratio of 23-24 times FY10 earnings, the risk-reward ratio is not in favor of long term investors, they should wait for markets to correct 5-10 percent to deploy their first 20-25 % cash on which they are sitting and then invest in a staggered manner.

5250-5300 will act as a major hurdle for bulls

For people who are still bullish at this level should buy Nifty around 5080 on dips with a stop loss of 5010 with a target of 5200

For people who are cautious at this level can short Nifty around 5200 with a stop of closing above 5250 for target levels of 5110-5065


Stock View: Hind Petro


Have a happy trading day!!

Regards

Ankit

One hour of trading is enough for market participants to do something drastic... Be extra cautious!!!

Wishing everyone a happy & prosperous Diwali.

Tomorrow's trading day is a crucial one as we are off on Monday on the account of Bhau Bhij. Dow is trading 70 points down at this point of time and dollar index has bounced back almost two tenths of a percent. The inverse relationship between Markets and Dollar Index continues to play a major role. Dollar Index ( DXY ) is approaching its long term support around 74-74.5$.

Dow may end lower only due to not-so-good results from Bank of America and this may spoil our tomorrow's Diwali Party.

Have a happy trading day

Regards
Ankit

Short only near 5200 only, You may get this level on Diwali due to low participation and bullish sentiment

Short near 5200 because then u will have round about 100 point stop loss to keep, so what if the resistance of Nifty is 5250 it can do +- 50-100 points around crucial levels as it is now only liquidity driven market and may be the last leg of this rally starting from 2500 levels..

Book profits and keep cash in hand as Nifty is approaching resistance levels

Have a good trading day!!!

Regards

Ankit

DowJones hits 10000 after 1 year, Nifty crucial resistance seen at 5250

As i write this blog there is news flashing everywhere that DowJones hits 10k!!! Is it something to cheer about or rather to be more cautious... I think 10000 is only a psychological level and nothing else, the only positive effect it will do will bring back the whole portion of the population that walked away from Wall Street in the last couple of years because of everything that has happened i.e it will only bring in more retail participation


Nifty views: Why 5250 on Nifty and 17700 on Sensex are most crucial levels



As per chart u can see 5250 will act as a strong hurdle.. the corresponding level of Sensex would be around 17700


Stock Views: ITC

Stock gave a fresh breakout yesterday, it was facing stiff resistance around 252-253 levels but only thing is to worry about is volumes. The move has come on very low volumes. Risky pick but can move up



Wish u a happy trading day!

Regards
Ankit

Boat trip from one riverbank to another !!!

This is the best way to describe market movement on Monday which was on a complete reversal from lower level to higher level of a very narrow range of NIFTY 4920-5080, but the problem is that it is not moving out of the range and it is getting difficult to trade day by day. Still the view is to trade with low volumes and hold the straddle that was recommended on Sunday

Some Observations:

1. FII'S net figure was +900 crores and DII'S net figure was -700 crores. It seems we have a battle on between both of them. One is trying to act as a bull and other as a bear

2. Nifty rose 2.21 % completely outperforming the broader market as CNX Midcap rose 1.57%

3. Nifty exactly took support from trend line( line from 3980-4935) at 4935-4940 and bounced back

4. The trend line joining three tops made from month of June is almost coinciding with 50 DMA




So when there is neither buying nor selling with conviction investors should wait, traders should book fast profits

It can be a failed attempt again to cross 5080 level, what bulls tried hard on Friday. In this case short Nifty Futures if it stays below 5080 for first half an hour with a Sl of 5080 and if this is not the case cover half of your shorts after it crosses 5080 to short Nifty again around 5150-5200 levels


Wish u a Happy Trading Day!!

Regards

Ankit

Markets close on friday left analysts divided, some say down some say up

At 15:20 on friday, CNBC TV-18 gave a final call from 2 analysts, one of them gave a nifty sell call with a target of 4750 and other one gave a buy call with a target of 5100.

Now whom to listen???

When there is such confusion among investors, traders and analysts about market's trend whereabouts then try option strategies.. it helps a lot

Markets are trading in a narrow range between 5080-4920.. As and when it breaks out from this range it will give 100-150 points on either side, and it will definitely in the coming week

So if u want to take a fresh position in these circumstances then,

BUY 1 LOT OF 5000 CE AT 95

BUT 1 LOT OF 5000 PE AT 165

TOTAL COST :260

BREAKEVEN: EITHER 4740 OR 5260 ON EXPIRY.. BEFORE THAT U CAN ENJOY TIME PREMIUM