Morning Update at 0800hrs for Intraday Market Level

[pranayk]

Sorry i could not update for 5 days as i was out of station for some official works

pl don't mind

thanks

 

[pranayk]

Weekly markets analysis for week ending 21 august 09

finally the 2nd week of august ended following 2 massive falls on the previous thursday & friday. At one time it generated the fear that nifty may straight head towards 13th july low of 3919 as part of the larger flat formation when operators on wednesday pulled nifty down to fall below critical support at 4380 to even touch 4360.well that was it, the bulls who were silent observers till 4360 came back with a bang and hammered the bears out of shape by forming the great copy book hammer that catapulted nifty to 4610 levels very next day on thursday. Friday followed up with a routine range bound flat that may continue till monday.
Although the week ended on a +ve note compared to its previous week, yet niftys weekly high of 4619 could not cross the previous weeks high of 4731 and at the same time breached previous weeks lows of 4464 to fall till 4360, finally rising to close at 4580 higher than previous weeks closing of 4481. So unless nifty moves up further from present levels to cross august 1st weeks high of 4731, nifty may rot within the 100 point range of 4620 to 4522 till such time a break out or break down takes place for a bigger move in the direction of breach. An upside decisive break out of 4620 with good volume can pierce through the previous weeks 6th aug intraday 3 black crows, to new highs above 4731 & a decisive breach of 4520 on the down side can see a stone like fall to cover the entire gap following the hammer of 12th aug till 4444 magic levels.
Another interesting feature to be noted is that, indian markets are lagging much behind other world markets when compared with weekly closings. This weeks closing of sensex & nifty were much lower than highs of june and july 09. All most all the indices of the world had this weeks closings higher than highs of both june and july 09.us, brazil, entire europe & australian indices had this weeks closings higher than june & july highs. Even japan, korea and hong kong too had a closing higher than both june & july highs. Even china after such massive falls closed above june highs so was with singapore. Sensex and nifty which closed the week at 15411 & 4580 are still much lower than june highs of 15600 & 4693 & july highs of 15732 & 4670.so seeing these facts & figures & comparing with those of other world markets, unless the things really turn pretty bad , there is every possibility of indian markets shooting up towards 2nd half of the coming week to breach june & july highs to move towards much higher levels. The effects of scanty rain fall and bird flu have been fully digested by the markets & there are signs of much improvements in this regard. However, the adverse astrological impact which the us markets will be grappling with during the coming week may be the only dampener during the week ahead to stall any speedy progress in indian markets.



Weekly technicals for week ending 21 august 09

the indicators in the monthly charts continue to generate bullish signals. Monthly rsi having moved up to 57 levels is signaling further up move. The strongest monthly signal being 8 month moving average coming from below 13 month moving average to cross it to move above it, is the strongest long term bullish signal which is occurring first time after sept 04.all in all markets are looking extremely bullish for the long term.
In the weekly charts, the weekly indicators are not giving decisive bullish signals. Weekly slow stochastic although in the upper 80% zone looks shaky. Weekly rsi at 64 has to move up again above 70 levels to signal mega bullish signal towards 4800 + levels. Weekly macd although in the bullish zone, does not look progressive. Weekly roc at 0 value has all the potential to shoot up if indices move up from here. However amidst these dull weekly signals from the weekly indicators, the weekly moving averages depict highly bullish signals.20 week moving average at 4090 having breached 34 wma at 3575, has breached 50 wma at 3478 & 200 wma at 3929. Further strength comes from the cross over of long term exponential moving averages where 50 week exponential average now at 3872 has decisively crossed 200 wema at 3681 & moving to breach 100 wema now at 3912. These cross overs are taking place for the first time after june 2003 around which time the previous bull market had started. So long term investors should boldly accumulate on every decline for excellent gains over the long term.
In the daily charts, the green hammer on wednesday, followed by the gap up on thursday forming a big green marubozu generally indicates a break away formation which can occur after the current flat that started on friday gets over around coming tuesday. Daily slow stochastic indicates further up move. Daily rsi at 56 & daily roc at -1 look deceptive. Daily macd also looks neutral. Confluence of 8,13 & 20 dma between 4540 to 4570 indicates that nifty has to decisively cross on a closing basis either 4575 to move up or 4540 to slip down. However 50 dma at 4410 far above 100 dma at 4040 & both of these above the 200 dma at 3434 makes medium term out look pretty bullish also & all these 3 moving averages turning upwards confirms the bullish outlook in the medium term. Short term andrews pitchfork indicates nifty to have strong support around the median line around 4540 to 4550 levels & only a decisive breach of this median line can bring nifty towards the lower fork around 4477 levels. A bounce back after retesting the median line around 4550 can again take nifty towards upper fork around 4600 levels to pierce it to move towards 4660 to 4700 levels.
So overall expect a flat to mildly weaker first half of the week to be followed by bullish days. Nifty needs to decisively cross 4620 to close above it to move towards new highs of 4731 levels and a decisive breach of 4540 can take it down towards 4477 support levels. World markets will play a major role in influencing the movements of indian markets during the week.


Elliott wave count for week ending 21 august 09

we have assumed that fresh bull move had started from 6th march low of 2539. The 1st up wave was completed on 12 june high of 4693.the 2nd wave a,b,c correction came down till 13 july low of 3919. The 3rd up wave started from the low of 3919 and on 4th august the 1st sub wave of this 3rd wave was completed with the highs around 4731 and the 2nd sub wave abc downward correction started. Most likely this 2nd down sub wave abc correction has been completed on wednesday 12 aug lows of 4360 and the 3rd sub wave of the mega 3rd up wave has started with a green hammer from the lows of 4360 levels. However there are possibilities that the 2nd sub wave is not yet complete and can again come down towards 50% retracement till 4325 or 62% retracement till 4229. A down side breach and close below 4520 followed by a fall to close below 4400 & then a decisive close below 4337 can confirm that nifty can retrace down till 4229. On the higher side a close above 4606 followed by a decisive close above 4711 can confirm that nifty is in the 3rd sub wave of the mega 3rd up wave to move towards 5000+ levels in short term.

There could be another case, where the new bull market after the completion of the 1st up wave at the 12th june high of 4693, the 2nd corrective wave is still on as a 3, 3, 5 bigger flat with 1st set of 3 down waves completed at the 13th july low of 3919, the 2nd set of 3 up waves completed on 4th aug high of 4731 & presently we are in the final 5 down leg of this flat that can go down all the way till 13th july lows of 3919 before start of the mega 3rd up wave. However the thing to be kept in mind is that as per elliott wave theory, 2nd corrective wave is generally in the form of abc zigzag as per paragraph above & the 4th corrective wave is generally a flat.







Fibonacci levels for the week ending 21 august 09

the up wave from 13 july low of 3919 till 4th aug high of 4731 covered a total distance of 812 points. So various fibonacci levels nifty can retrace down are 38.2% till 4420, 50% till 4319 and 61.8% to as low as 4229 levels.

Confining to the present rise of nifty from 12th aug low of 4360 till the friday high of 4619, nifty has covered a distance of 259 pints. So in case of a fall, nifty may retrace to 38.2% level of 4520, 50% level of 4488 & 62% level of 4459.



Weekly trading range for week ending 21 august 09

the broad weekly range for nifty may be 4455 on the lower side and 4620 on the higher side. A decisive breach of 4455 and inability to sustain above it may pull down nifty to retest 4360 levels. Us markets now having been entangled by adverse planetary effects may fall that may induce nifty to fall towards sub 4400 levels again. On the higher side a decisive cross over of 4620 & a close above it only may catapult nifty towards 4731 levels.

 

[pranayk]

Markets for 17 aug 09

fortunately, the rain gods have been kind in pouring heavy rains in the scanty rain fall areas during the weak end & more rains are forecasted during the coming week. Secondly some sort of control over the swine flu with much more recoveries & reduction in reported cases may drastically reduce the gloomy sentiment that persisted last week. So with a push from asian markets, one can expect a buoyant indian market on monday . However, the opening of indian markets will mostly depend on asian opening which are likely to fall by following blindly u.s. Markets which fell on friday night. So one can expect nifty to fall initially to fridays lows of 4559 to decide upon further course of action from there.

If one has a look at the hourly chart above, one can find strong resistance around 4610 to 4620 levels and the support coming around 4560 levels. Although a flat formation after an up move generally breaks out on the up side, yet one should not jump into the conclusion so early as the flat can take many more days to remain with the flat range of 4540 to 4620 till a confirmed break down or break out takes place. Slow stochastic in the chart above looks downwards & may fall to the lower zone first, to rebound from there. However with buoyant asian markets defying dows fall on friday, nifty can have a surprise move upwards after breaching the triangle upwards at 4606 to move above 4612 followed by 4620 to shoot upwards. However with gloomy asian markets induced by fall in us markets on friday, one can expect a fall below the critical level of 4559 to retest 4540 & then even fall downwards to 4500 levels.

Since only 8 trading days are left before the expiry, option buyers need to exercise utmost caution due to fast decrease in option value over night. Ruthless shorting of 4800 calls on rise of markets and 4200 puts on fall of markets & holding these shorted calls & puts may bring good gains on expiry.

For intraday trading on monday, condition of asian markets from 9.30 am till 9.55 am will play a major role. Ever deceptive & operator infected sgx nifty will add to what asian markets indicate. Most likely asian markets may see a correction specially with korean markets which had seen a good record spurt on friday. For nifty, keep a close watch whether it breaches 4558 or 4612 first. Most likely 4558 may be breached first to move towards 4540 levels that may see profit booking by the intraday bears for a quick gain. However a breach of 4540 can swing the pendulum again in favor of the bears to take it further down towards 4520 or lower levels into last thursdays gap after the hammer. However with not so bad asian markets, bulls may regain confidence to take nifty past the critical resistance around 4616 levels for a sharper break out. The 3rd possibility could be continuation of the flat within the range of 4545 on the lower side and 4606 on the higher side. Long term investors must make full use of any fall to keep on accumulating quietly.

 

[pranayk]

Markets for 18 aug 09

the impact of heavy fall in asian markets that too with chinese markets falling by more than 6% saw indian markets crash to sub 4400 levels again threatening to re breach last wednesdays lows of 4360 . It looks as if chinese astrologers have got a hint of what is in store for the world markets in next couple of days. In fact they always act in advance. Now it looks as if the adverse planetary aspects have entangled u.s & other world markets completely that may continue to adversely impact world markets for next couple of days.

As per the daily eod chart above, nifty has again breached both 20 & 50 dmas which is not an encouraging sign for the near term. Another gap down fall below the critical level of 4350 levels can see nifty straight fall to 4229 or even lower levels. In case the support at 4350 breaks, it may give the confirmation signal that nifty is headed for the larger flat formation towards july 13 low of 3919.

On a decisive breach below 4350, nifty may fall to 50% fibonacci support at 4320 levels a decisive breach of which may take nifty towards 62% fibonacci levels of 4229 that will be the deciding point whether nifty can fall towards 3919 levels to complete the larger flat or bounce after the zigzag abc correction till 4310 or 4229 to see nifty resume its up move. In any case, most likely nifty should give a good rebound before another fall occurs. Important daily indicator slow stochastic is in a precarious position and another sharp fall in nifty will confirm the reversal of stochastic from present levels for a sharp fall. Other daily indicators like rsi, w%r & even adx trend indicator, have started to look extremely weak after mondays fall.

Generally it is seen that when asian & european markets fall badly due to highly negative dow futures which was 190 points down this after noon, after actual opening of u.s markets, dow generally changes gear to perform better the same night. So lets hope that dow lives up to its tradition that may bring cheers to asian as well as indian markets on tuesday morning. Actually indian markets & asian markets have discounted dows impending fall for monday night and have already corrected on monday in advance, hence one should not expect a bigger fall in indian markets on tuesday

FOR INTRADAY TRADING ON TUESDAY AS USUAL THE OPENING WILL DEPEND ON ASIAN MARKETS WHICH ARE LIKELY TO BE BETTER THAN MONDAY AS DOW MOST LIKELY WILL RECOVER AFTER THE CLOSINGS OF EUROPEAN MARKETS. WITH NOT SO BAD ASIAN MARKETS, IN CASE NIFTY NIFTY MANAGES TO CROSS 4395 THEN IT CAN HIT 4415 FOLLOWED BY 4444 OR EVEN HIGHER LEVELS. HOWEVER IF NIFTY BREACHES 4350, THEN FURTHER SHORTING MAY COMMENCE TO PULL NIFTY DOWN TOWARDS 4320 OR EVEN 4275 LEVELS FROM WHERE THE 62% FIBONACCI SUPPORT OF 4229 WILL ONLY BE A STONES THROW DISTANCE TO RENDER ANY POSSIBLE SUPPORT..

 

[pranayk]

Morning update at 8 am 18 aug 09

another black monday, lived up to its reputation with entire world markets crashing on monday generating the hope that another big down side correction may follow after an expected pause. Dow was down by 186 points. More importantly s&p500 lost 2.4% to slide to 979. Brazil lost 2.5%. European markets lost 1.5% to 2.5% with uk ftse performing the best with only 1.4% fall. Since most of the asian markets had fallen miserably on monday induced by china fall & dow futures, on tuesday they may not fall much and may even mildly rise or remain flat before another plunge after the pause or upward retracement is over.

For indian markets one can assume the opening to be similar to asian markets. Nifty may open flat to mildly bullish to initially trap all those who had carried over short future positions. It may gradually inch up towards 4400 levels to meet the major intraday resistance around 4422 levels above which only some more up move may come. Traders are advised to resort to intraday trading only without carry over of un hedged future positions. Carry over of both calls and puts in the ratio of 1 call to 2 puts looks to be more profitable for those who by holding onto their 4400 & 4500 puts also boldly short 4200 puts on market declines & similarly boldly short 4600 and higher calls on market rise by holding onto their 4500 calls.

Bulls must try their best to save the critical support around 4360 to 4350 levels during 2nd half of the day failing which sub 4300 level looks to be a distinct possibility this week. Other than astrological factors there are no other reason for the markets to fall & if the planets have their say, they may take the markets down to much lower levels in next few days with a pause or mild upward retracement in between.

 

[pranayk]

markets for 19 aug 09

as expected, in spite of 186 point fall in dow overnight, asian markets as well as indian markets were less affected and showed resilience to move up remarkably with sensex gaining by 250 points and nifty up by 71 points. It looked as if the indices were moving with a vengeance and both sensex and nifty kept on moving up from the start itself as if a fresh up move has started. Well, how far this bounce can go is to be seen but certainly a decisive cross over of 4480 or more importantly 4492 can easily take nifty to much higher levels to cover the entire gap till 4560 levels.

From friday 14th aug high of 4613 till tuesdays low of 4375, nifty had fallen by 238 points . So a 38.2% upward retracement till 4466 has been covered on tuesday. A 50% upwards retracement can take it till 4494 level which nifty almost reached on tuesday by making a high of 4491.a 61.8% retracement may take nifty till 4522, if down side resumption of the fall does not start from wednesday. On tuesday nifty moved up above 50 dma at 4402 to close high above it at 4459. So on a down side move, the same 50 dma at 4402 should arrest further fall towards critical level of 4360 to 4350.besides bouncing back from 4357 on 12th august, nifty has managed to protect the level around 4360 twice this week also.

So the level of 4350 to 4360 may be a strong support before the expiry and option traders may write 4300 & 4200 puts on decline of nifty as well as boldly write 4600 and 4700 calls on every rise & hold these shorted calls and puts till expiry as long as 4350 is not breached on the down side and 20 dma around 4550 is not breached on the up side. Option buyers should be extremely cautious in holding out of the money bought option as these would get reduced to zero value faster with only 6 trading days left before the expiry. Quit early or short lower puts or short higher calls with the bought options. A decisive breach of these critical levels of 4350 & 4550 can see good move in the direction of breach. Resumption of the down side move in u.s & asian markets may threaten the critical nifty level at 4350. However, with such a big fall in dow on on monday night, one can easily expect a pause or up move in dow on tuesday that may see another bounce in asian markets on wednesday.

In spite of the 71 point up move in nifty on tuesday, the daily indicators still look weak and look dangerous for further falls. In the hourly chart above, slow stochastic is precariously placed at the verge of sliding down. However another good up move by nifty may see about turn in the indicator to move back into the upper zone to signify further up move.

FOR INTRADAY TRADING ON WEDNESDAY, EXPECT A MILDLY BULLISH OPENING. A CROSS OVER OF 4481 CAN TAKE NIFTY ABOVE 4500 LEVELS. THE INDEX HAS STRONG SUPPORT AROUND 4444 LEVELS A BREACH OF WHICH CAN TAKE IT DOWN TO 4424 LEVELS.

 

[pranayk]

..........

 

[pranayk]

Market Chart for 18 aug 09

 

[pranayk]

morning update at 8 am 19 aug 09

as expected dow showed the upward corrective bounce of 82 points on tuesday before another big fall in coming days. But before the next big fall, there may be a day or two of confusing flat in dow. Following the dead cat bounce in us markets, european markets were up by nearly 1% with uk ftse up by .9%. Brazil up by 1%. Asian markets after a mild rise yesterday have opened mixed to +ve & may remain +ve initially to follow dow futures later in the day.

For indian markets, expect a flat to milder opening in line with asian markets. The trading range may be confined within 4480 to 4490 on the higher side and 4400 to 4375 on the lower side. A decisive breach above 4480 initially and then 4494, can take nifty to higher levels and on the down side most likely 4400 level will be protected if nse index maintains above 4424.in that case there is a possibility of a range bound flat to mildly bullish day..

With only 6 trading days before the expiry, option buyers should be extremely careful in order to avoid seeing their option value reaching 0 value by expiry. Avoid carry over of bought options, if things go wrong the option will lose value in a big way. Write (short) higher calls of 4600 on market rise and write 4200 puts on market declines and hold these shorted calls and shorted puts in case one has bought lower calls of 4500 and bought higher puts of 4400 or 4300.

 

[aid]

Thanx a lot.