Nifty Technical Take - 9th June 2012

Monthly TF: Nifty again has taken support at 55ema monthly. We have tested this support 8 times now and nifty has closed below it only once. After that the price was rejected and closed above the 55ema monthly. For the trend and the momentum on the monthly is down.


Weekly TF: Nifty is at the trendline of the last highs. But the momentum has just turned positive given a buy signal but the trend is down. Moreover weekly has just closed below its 13wema. which is 5071 and the closing is at the 5069 mark. Moreover the weekly candlestick is a bullish engulfing pattern but consider the tend was flat we do know how effective this is going to be to get the prices higher.


Daily TF: After making a lower low with positive divergences. Momentum is overbought on daily and trend is positive. We have just closed above the 200dma and now the sequence of higher highs and higher lows need to be maintained.

We are long with very strict stop losses now that we are the resistances.

Back home

I write this post today from a different computer. My other computer is having problems and thats the reason i have not been blogging.
Will put in a post afterwards on nifty technicals.

All of you out there Tc.

Nifty Analysis - 28th March 2012

Monthly TF- Nifty is making a possible inside day candlestick for the month with supports being at 5183 on monthly level. Stocs are in buy mode and Macd is in sell mode though its making lower histograms.

Weekly TF- Though the candlestick is lower low and lower high - for the timebeing 5179 is the 200ema which is holding and 5171 is the possible buying zone. Stocs is in sell mode and macd is in buy mode.

Daily TF- Today on daily TF candlestick has made a lower low but with positive divergences across all the three indicators I follow. Stocs are in sell and oversold territory and macd is in sell as well.

We would go long when stocs and macd tell us to do so, till then since the conditions are oversold we are not shorting nifty at this juncture.

17th March - Nifty Update

Nifty -

Monthly - Nifty is struggling to stay above 5385. As of now its forming a bearish harami pattern with inside day pattern according to the western charts suggesting that the price rises any further will need some time. Supports for the index come at 5245 and 5210. Stocs are in buy mode after bottoming up from the oversold zone and macd is in sell mode though its forming lower histograms.

Weekly - After opening higher this week at 5240, nifty has slipped back now to 5318. After the doji made last week, nifty had opened higher but the technicals ensured that the index was to sell off from higher prices. Stocs remain in sell mode and macd is forming lower histograms. Any price rises will be capped. 

Daily - Nifty had spent almost 12 days in the range of 5425 and 5325. Now that the index has closed below 5325, with overbought conditions we may go down further in the index. Stocs are in sell mode after turning down from overbought conditions and macd is in sell as well. Moving averages indicate fast fall setup. 

Further this week was a major news event week, and the news were used to sell at higher prices since technicals anyways were negative. Hence this market remains a sell. 

Be short.

Identify the Time Frame to trade

One of the most critical elements to trade successfully is to identify your time frame of trading and then work accordingly on the charts....
The decisions - entry and exits will then be taken accordingly...

Gold may now be catching up with Risk On Trade

Just wanted to check if Gold now would be catching on with the Risk On Trade.
In Indian Rupees, it seems to have made the low and now looks like upward march will begin.

Patience needed now

There is a day to go for the expiry in Indian markets. The trend has been very strong upwards because of various obvious reasons which need to be taken into account.

Now since we are not having any positions, we would want to wait for swing setups to enter into a low risk position which would make us ride the trend.

So let the expiry happen and market show you the way which side it wants to move.

You are as good as stocks you trade

Nifty pausing to fill the gap?

Nifty may be pausing here to fill the gap created with the possible targets of 5428. But the put writing shows bullishness for the time being and the possibility of larger correction remains very low, hence expiry games will favor longs.

Changed Character of the Market

Since the rally began in 2012 in markets across the world, the character of the market has changed. First and foremost is the strong trending nature of this market which is unlike the range bound markets that we experienced for a month prior of new year.

Moreover the beaten down stocks are acting right and going to be the darlings incase you want to make money...

Stay with the trend...

Nifty weekly update - 11th Feb 2012

Nifty has a probable doji star in the making. If we gap down on monday, then we have the possibility of going into correction mode - sideways to lower for sometime.

YTD Returns 2012 - Risk On

No questions that its been risk on trade this year. And Silver has gained 20% YTD in USD terms.

Basing Action in Stocks

Today while running over charts of many scrips, I saw basing action being completed in lot of these names and they wanting and begining to breakout.

Thus it further strengthens our thesis for the trend upwards for stocks this year hence the trade directionally is up and strategy is to buy the dips and add on to the positions in this manner.

Realty, Infrastructure names which had been beaten to the extremes last year will be best suited candidates as those who would have basing action done and complete. So we will trade them.

Markets will go higher

In this post let me just try to jot down few points regarding the direction for stocks in India and as a correlated class, stocks across the world for the next few months. This mind you is not a prediction but a general sense one gets while trying to understand and read technicals of the markets.

Nifty - Made a bottom at 4531 and has been preceeded by piercing candlestick which is being confirmed this month by another strong showing. Stocs have turned up from oversold position and given a buy. The prices are above the 8 and 13month EMAs which stand at 5179 and 5233 respectively.

In the medium term - nifty has made a doji on weekly charts which shows the index may consolidate for few days now moving sideways to down. Stocs are in overbought territory but thats not the signal to sell, though profits may be booked. 5180 is a very strong support zone now and is buy of dips strategy now.

In immediate short term, the market has been overbought now and lets wait before going long, since this is not the opportunity to take fresh new long positions. 5323 has been a strong buying zone for the moment and need two closes below it to ensure that buying opportunity comes in.

Seasonality says we may have a dip only in 3rd week of Feb and then we would move higher.

Gold looks like its already bottomed out

Weekly Gold charts is shown above:- what we can see is, gold technically is now bottomed and the downside looks very little. Considering that we have risk on trade for the moment, Gold looks good to have gains going ahead. Thus only position should be long.

3i Infotech - Directional bias has changed



One stock that has my interest for the time being is 3i Infotech. 18INR seems to be a good point to get long and the risk reward ratio seem to be in favor of longs.

Gold and Whats it doing in INR

Gold in Indian Rupees had a fantastic run when it touched a high of 29713/g in the month of November 2011. Since then the metal has been trading in a range. Last close was at 27110/g in Jan 2012. Since Feb 2011 Gold has returned a net 36.81% (Not including transaction and storage charges) which is a decent return on the metal for the layman who would not want to bet the farm on non trending markets that the public has faced since the top sometime in November 2010.

Lets then just update ourselves what Gold is probable to do. Lets look at the monthly charts first. The euphoric volume has certainly died down and Macd has been forming lower histograms. After a huge negative month in december 2011 Gold made a bullish harami pattern suggesting the fall was done. Now Gold seems to be flat correcting itself when the rupee has bounced off from the lows and trending upwards. Thus flattish correction for Gold is very bullish for long term fundamentals. 

Looking at the weekly charts - Gold seems to have made the panic bottom and is just bidding its time to correct in an environment when INR is strong and markets (stocks) in India and across the world are turning bullish. 

 It seems probable that Gold would test its recent lows. That would be a buying opportunity.



Markets - Stocks and Gold: Where are they heading?

Offlately, I have been little lazy and little occupied hence not updating my blog. The reasons are I have been making some decent money in the markets and my career profile has changed, thus the learning curve is keeping me occupied.

My thoughts on this post will just summarise the trend and directional bias I see in the markets. I dont and will not give calls on this blog since I dont want to inlfuence anybodys decision making - I believe in Free Will and that should be excersised in the market since it gets rewarded beautifully. 

My take is that Indian markets have become now buy on dips. The business cycles have shortened and we will now trend higher for few months. Till what time this trend will last I dont know but i want to trade the trend and the stocks in play that will gain most. 

Your trading P&L is as good as your best stocks.  

Why this blog and Who am I

I just had this itch today to write a few lines on why I started out with this blog. The post would cover a little background on my personal life as well as two are interlinked.

As a kid, I was always fascinated with big cars and bikes, always drooling over them and wondering when I would be able to lay my hands on them. I thought my education would prepare me for my employment which then would let me have anything I wanted. Since, I was not very studious type I did get to go to the revered B schools and hence ended with mediocre job paying me average salary.

Suddenly i realised that all the dreams I had would not be fulfilled incase I went ahead going the drab job being part of the rat race. And then in year 2007 I went ahead and invested in the biggest of booms in Indian stock market. Since everything was going up, I made some profits and being a novice, this was one of the greatest joys I had found. As it meant that I could not go in for whatever machine I wanted.

You see, my target still was my big cars and bikes. But then 2008 came and all went downhill, my investments. The down they went the more I invested, not knowing a penny about the markets.

After having this life changing experience pretty early into my life in the markets, I was determined to find out what exactly are markets? And then I started educating myself on internet, paying for the best of the resources I found over time had been proved correct and right time and again. In that journey which started with understand the fundamentals, then to technicals as well to become and prepare what I would call an investor and trader as well... Over the years I have become adept myself at being able to understand whats happening around the world and what actions to take accordingly.

Since then I have been trading my own money in an effort to be financially free. There is the change here in my approach to markets... I want to be financially free rather than just gun for some petty 4 wheels... Being able to pass on to my coming generations and other souls who want to be a learner of markets will be a venture worth working for...

Indian Markets - What Ahead

Predicting the markets is not recommended to anyone and I follow the same rule. However, one should know whats happening at the moment and need to act accordingly.

Let me present a few points as TA

1. The beaten down infrastructure sector in India has rallied big time during this week
2. The sectors off lately which had shown gains like IT and FMCG have started correcting
3. Even the banking stocks are showing some improvement in prices indicating buyers are willing to pay higher prices
4. Nifty the index is holding above 4800 for the time being with the larger TF in favor of move upwards but on daily its little overbought so may go sideways correction

Thus the conclusion may be that the sectors that were beaten down are coming into favor with the traders and speculators with the others like IT and FMCG due for a correction now.

For going long we now know which way to go.

Nifty and Scrips Status Check

TF	Trend indicator	Lead indicator	Candlestick	Conclusion
Daily	Mild sell has turned into a buy	Given a buy after turning up now at 35	Very strong candle and finish. Has closed above 8/13ema as well. 712 was last swing high and 720 is the 200dema.	Look to sell out either at 711 or 719.  Double bottom is confirmed for the scrip
Weekly	Sell but lowering histograms	Buy at 19	Closed at 100ema supports which comes in at 658. Possible double bottom on cards	Low risk set up.
Monthly	Sell	Sell	Looks like more downside is likely

NIFTY

TF	Trend indicator	Lead indicator	Candlestick	Conclusion
Daily	Today produced higher histogram	Overbought and gave a sell but today turned into buy	Gap up after Doji made as inside day. Was almost a marubozu day. This breakout above 4800 came with higher volumes	Longs taken with stop loss as 4820.
Weekly	Sell but now possible but in the making	Buy after turning up from oversold conditions at 19	Prices are consolidating around 200ema. 4786  is the immediate resistance	Good set up for longs but need to wait
Monthly	Sell	Sell and Oversold reached 16 levels	Possible bullish harami on monthly charts. Upmove can happen until 4970	Downside looks limited as long as harami pattern is in the making

TATA MOTORS

TF	Trend indicator	Lead indicator	Candlestick	Conclusion
Daily	Buy but lower histogram	Overbought and now in mild sell	206 is proving to be a resistance and seems to be short term high. Could not close above 206.	Wait for longs. Can come down till 193
Weekly	Buy	Buy at 68	After Very big and strong candle. Fast rise setup may lead to extra gains. Made a new weekly high. Make go sideways to down.	Need to see if weekly overcomes the overbought conditions on daily. Weekly looks like turning down as well.
Monthly	Sell but turning up	Buy	208 remains short term resistance.	Wait

INFOSYS

TF	Trend indicator	Lead indicator	Candlestick	Conclusion
Daily	Rolling down at 7.45	Sell turned into mild buy	Correcting sideways	Wait for longs
Weekly	Buy	Buy at 69 but may be rolling down	Higher high and higher low. Not able to clear last weeks high	Wait for longs
Monthly	Sell but turning up	Buy but turning down	2887 and 2742 are the breakout or breakdown levels, triangle in the making.	Wait

HINDUSTAN UNILVER

TF	Trend indicator	Lead indicator	Candlestick	Conclusion
Daily	Sell but may be turning up with lower histograms	Sell and reaching oversold zone &after mild buy gave mild sell	Inconclusive & correcting sideways since last 4 days	Wait for a day
Weekly	Buy but rolling down and near a sell	Overbought and sell	Correction going on. Holding on to last weeks low	Wait for longs
Monthly	Buy	Sell	Correction after monthly doji	Wait

GVKPIL 

TF	Trend indicator	Lead indicator	Candlestick	Conclusion
Daily	Buy mode	Overbought	Strong marubozu candle at 13.45. 100ema at 13.89. has closed above 100ema at 14.	Wait, can present very good setup for longs
Weekly	Just given buy at 0.48	Turned up in buy mode at 42	Marubozu candles on weekly with higher high and higher low and accompanied with higher volumes	Good for longs
Monthly	Sell but with lower histograms	Buy but at 5.76	Bullish harami on monthly	Marubozu on monthly strong with big volumes