Morning Update at 0800hrs for Intraday Market Level

[pranayk]

markets for 24 aug 09

the expiry week opens with the back drop of bullish break out in the us markets on friday night and also a last hour bullish break out in the nifty above the resistance of 4495 to reach 4539.on the basis of pure technicals, the markets certainly look extremely bullish for monday & should at least take nifty towards 4595 to 4600 levels if there are no nasty surprises from asian markets. The reverse h&s formation as you see in the chart above can take nifty by at least 140 points from the break out point of 4495 towards the target of 4636 in next 1 or 2 days with the major resistance of 4619 posing a threat for some time.

For intraday trading on monday, with bullish asian opening, expect a gap up open around 4555 to 4568 levels followed by the as usual marking time in a flat range for 1 or 2 hours before deciding further course of action. In case of nasty surprise from asian markets, nifty finds strong support around 4509 followed by 4494 and finally 4469 that will bring in strong buying interest. On the higher side nifty faces initial resistance around 4555 followed by 4569. A decisive breach and sustaining over 4569 can take nifty towards 4595 or even 4619 which is quite possible if asian markets & sgx nifty do not play the spoil sports at the beginning. A decisive close above 20 dma around 4540 can add further strength to nifty for another big rise in coming days.

As per the chart above, andrew pitchfork median line (marked in blue) goes around 4640 to 4650. Nifty having successfully taken support at the lower fork around 4400+ levels should generally eye for testing the upwards moving median line around 4600 to 4650 levels shortly. Long term investors should keep on accumulating for good gains in the long term. Swing traders now may continue to hold their longs with a close below 4353 to 4333 as their quitting point.

Although us markets have had a consecutive 4th day of rise on friday and are ripe for a pause that may induce asian operators to take advance action on monday, yet the markets definitely are in for some more up move this week. With s&p500 having shown some sort of a break out momentum on friday, there is every possibility of some more up move in us markets in coming days after the expected pause that may induce a bullish momentum in other asian as well as indian markets in coming days.

 

[Prabhan]

Hi Pranay,

I am following ur views n updates from th past few months and found extremly gud and helpful.
I need your advice for the below trade.
I was holding 4500/4600 nifty aug calls till friday morning but took chance of catching same calls at lower levels, so sold these positions and bought 4200/4400aug pe and thought of squaring off put options at lower levels and rebuy call options. But after that nifty went up and dint get the chance of squaring off puts. Now I am in huge loss due to buying of these put options. Wat u recommend to safeguard my invested amount in puts.
I am luking fwd for ur advice. Please help.
Thanks in Advance...

Prabhanshu

Hi Pranay,
No advices for me?

 

[Class]

Hi Prabhanshu,

Didn't you have a stop loss? If you had a mental stop loss and the index has surpassed that then you should exit at the earliest. Otherwise you have a bit of a problem.

Markets are looking bullish, you can only hope for bad news, but that isn't a good strategy. You should look at both sides of the coin and make a decision before market open about when you are going to exit, presumably at a loss.

Possibly there may be some profit taking at open and you could use the dip to exit, but if there isn't and the index opens bullishly and continues throughout the week, you will be in an even bigger loss.

Maybe the markets will fall terribly toward the end of the week, but no one can say for certain what will happen. We need to trade with the information to hand, and that is that short term the markets are looking strong.

Ask yourself a question, if you were not holding that put, how would you trade the market on Monday?

Hope this helps.

 

[pranayk]

morning update at 8 am 24 aug 09

dows 155 point rise coupled with a break out move of s&p500 to close above the level of 1025 has given the right impetus to the world markets for another bout of sharp up move towards fresh august highs. Brazil was up by 1.6% and european markets were up from 2 to 3% with uk ftse closing up by 2%. Asian markets have opened with big gap & may continue to inch up in coming days.

For indian markets, one may see a big gap up opening around 4600 levels but whether the critical level at 4619 will be decisively crossed today or not has to be seen. Traders may wait for any intraday decline to enter long positions in their favorite stocks. Option traders holding long positions in calls may hold the calls and write calls of 4700 on market rise. Put writers of 4400 & below should book profit on shorted puts as nse index reaches 4600 levels. Put buyers may quit early or buy calls of 4600.fresh traders may wait for the intraday decline in index to buy september futures and 4700 calls & hold.

Stocks in the sectors of metals, cement, oil & gas exploration, power and pharma which had seen sharpest fall or were subdued during last week, may have the sharpest rise during the current rise. Traders & investors may accumulate these on every decline for very good gains in the near term.

 

[pranayk]

Chart for 25th August 2009

 

[pranayk]

markets for 25 aug 09

the markets did more than it was expected out of them. Nifty has decisively crossed both 50 dma at 4400 & now 20 dma at 4537 and also on monday it breached and closed above 4619,the b wave of the abc correction from the high of 4731 till the low of 4353.generally when the upward thrust crosses the top of the b wave of the previous correction it generally moves up to shoot past the previous high as a new up wave. So with a little bit of pause here & there one should generally expect nifty to shoot past the 4th aug high of 4731 to much higher levels in coming days with the expiry posing as a minor hindrance to the up move past 4731.

As per pure technicals, the markets look extremely bullish having closed above the neck line of the larger w formation with the base around 4350 levels and neck line around 4619 levels which over a period of couple of days should take nifty up by 270 points from the neck line towards 4890 levels if not before te expiry, certainly within a few days after the expiry. The neck line around 4620 levels will now be a support to invite buying interest. The 3 months of flat type consolidation after the election verdict spurt looks to be over and in all probabilities one can see nifty testing 5000 levels in september. With andrews pitch fork median line moving up day by day , it will attract nifty towards it now around 4700+ levels very soon and if things things move as they are now, purely based on technicals, one should not be surprised to see an expiry around 4700+ levels on the coming thursday

FOR INTRADAY TRADING ON TUESDAY, NIFTY HAS STRONG SUPPORT AROUND 4600 TO 4590 LEVELS THAT MAY INVITE GOOD BUYING INTEREST. ON THE HIGHER SIDE, IT MAY FIND INITIAL RESISTANCE AROUND MONDAYS HIGH OF 4656 & THEN 4680 LEVELS, ABOVE WHICH IT MAY JUST TRY TO SNEAK INTO 4700 LEVELS THAT MAY INVITE HEAVY PROFIT BOOKING. US MARKETS AFTER 4 CONSECUTIVE DAYS OF RISE HAS PAUSED FOR A DAY OR TWO TO SHOOT UP AGAIN AFTER THE PAUSE.

 

[NFpositionaltrader]

thank you Mr.Pranay for the wonderful analysis, flow & gist of your analysis is simply praise worthy....

 

[pranayk]

morning update at 8 am 25 aug 09

us markets as was expected closed absolutely flat so also was brazil. European markets which close earlier than us markets were 1% up. Asian markets after the big rise of monday have opened mildly weak & may close flat to mildly weak .

For indian markets, expect a flat to mildly weaker opening. The trading range is likely to be confined within the mondays trading range of4656 to 4596 to finally close flat or mildly weak. Unless there are further +ve cues from us markets, the chances of further up move beyond 4700 looks to be highly remote before expiry.

For intraday trading on tuesday, in case nifty falls below 4625, the low of the pin bar in the hourly chart above, chances of further fall towards 4596 to 4588 or even lower levels may be expected. Similarly on the higher side a rise to breach 4656 can nullify this bearish pin bar. Most likely nifty is likely to trade in a tight range with a negative bias to harass option buyers & reward option writers.

 

[praveen taneja]

morning update at 8 am 25 aug 09

us markets as was expected closed absolutely flat so also was brazil. European markets which close earlier than us markets were 1% up. Asian markets after the big rise of monday have opened mildly weak & may close flat to mildly weak .

For indian markets, expect a flat to mildly weaker opening. The trading range is likely to be confined within the mondays trading range of4656 to 4596 to finally close flat or mildly weak. Unless there are further +ve cues from us markets, the chances of further up move beyond 4700 looks to be highly remote before expiry.

For intraday trading on tuesday, in case nifty falls below 4625, the low of the pin bar in the hourly chart above, chances of further fall towards 4596 to 4588 or even lower levels may be expected. Similarly on the higher side a rise to breach 4656 can nullify this bearish pin bar. Most likely nifty is likely to trade in a tight range with a negative bias to harass option buyers & reward option writers.

:clapping::clapping::clapping::clapping:

 

[vssoma]

morning update at 8 am 25 aug 09



For indian markets, expect a flat to mildly weaker opening. The trading range is likely to be confined within the mondays trading range of4656 to 4596 to finally close flat or mildly weak. Unless there are further +ve cues from us markets, the chances of further up move beyond 4700 looks to be highly remote before expiry.

good...keep posting....
:thumb: