Morning Update at 0800hrs for Intraday Market Level

[pranayk]

elliott wave count for week ending 09 october 09

there is no change to last weeks elliott wave analysis which is reproduced below for this week:--

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 can move up to cross the all time highs of 6357 .this 3rd major up wave will have 5 sub waves with 3 sub waves up and 2 sub waves flat or down. 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. As of now we are in the 3rd sub sub leg of the 3rd sub wave of 3rd wave. As per daily eod chart, 5 mini waves of this up leg from the lows of 4576 seems to have been completed with the high of 5099 on 01 oct 09.

There could be another possibility that the up leg that started from lows of 4353, has completed its 1st up sub leg at 27th august high of 4744 & after a 2nd down sub leg correction till 4th sept low of 4580, next sub up leg of 5 legs has started of which one up leg is over at 4889 on 10 sept & after a small 2nd leg correction of 5 days of flat till 14th sept lows of 4786, nifty moved up till 5036 on 22 sept as 1st pat of 3rd up sub sub leg , 2nd part came down till 24 sept low of 4904 & presently nifty is in the 3rd part of the 3 rd up sub sub leg that can go till 5200+. Levels after a minor correction or flat formation during the week.

 

[pranayk]

fibonacci levels for nifty

confining the fibonacci studies to the low of 4904 on 24th sept till the high of 5099 on 1st october, in case of a fall in nifty various fibonacci supports are 38.2% at 5025, 50% at 5002 & 61.8% at 4979.

 

[pranayk]

weekly trading range for week ending 09 october 09

the broad trading range for the week may be 4989 on the lower side and 5252 on the higher side. A decisive fall below 4989 can bring down nifty towards 4934 followed by make or break support at 4904.similarly on the higher side a decisive breach of 5111 may take nifty up towards 5136 followed by 5166. A close above 5166 can eye for important resistance around 5252.one can expect another bullish week ahead.

 

[pranayk]

markets for 05 oct 09

after 2 consecutive truncated weeks, the new week opens for trading on monday at the back drop of negative cues from us & european markets to be followed by operators induced fall in some of the asian markets as well as sgx nifty whose volume will be artificially created to induce a negative sentiment for the opening of indian markets so that external operators can buy indian stocks at lower levels after the gap down opening fall. However, one thing to be kept in mind that other emerging markets like brazil, indonesia have defied us markets and closed in the +ve last week.

For intraday trading on monday, in case asian markets again fall in solidarity with us markets, then expect a gap down open in nifty. A fall below 5047 followed by 5030 may see a sudden bounce in nifty which will try to maintain above 5050. However inability to sustain above 5030 can lend further power to the bears to take nifty down towards 5000 or even 4990 levels. Bulls may muster enough strength to snatch the initiative from the bears around the nifty level of 4989 and try to take the index up from that level to finally close nifty around 5050 or 5040 levels. So on monday bulls must protect 5050 to 5040 levels during the trading after the open, to avoid seeing nifty slipping below 5000 level.

Traders must keep in mind that us markets had fallen due to weak dollar, weak jobs data and record low monthly auto numbers. Weak dollar has affected export oriented economy like japan , hong kong, singapore, s.korea & taiwan for which their markets had fallen last week where as internal consumption oriented economy like of brazil & india were up last week. Last week us had record low monthly auto sales numbers where as most of the auto sales numbers of indian auto industry showed a record gain. Hence any dow or sgx operator induced fall must be used by long term investors as a golden opportunity to go long for good gains till 5200 or even 5500 nifty levels in coming weeks. Metals, mining, oil & gas exploration & even some infra & tech stocks may invite solid buying on any opening fall in nifty. Have a close watch on the movement in index heavies like reliance, l&t, infosys, sbi & icici bank to have a feel of the momentum in nifty after the opening.

 

[pshirurkar]

I do agree with you mr Pranayk,
every fall in the current market should be considered as a buying opportunity.
thanks for nice containts

 

[aabhi06]

Dear PRANAYK,

Thanks for details posting your view.

Most probably our indian marker will recover monday on

2nd half session OR tuesday onwards.

As your view regarding market is perfect with depth.

We should adopt BUY ON DIPS method untill nifty

breach below 4680.

Thanks.

 

[pranayk]

morning update at 8 am 05 oct 09

on friday dow was down by 21 points even after a fall of 200 points on thursday. European markets were down by more than 1% with uk ftse falling by 1.2% on friday. Brazil was up by 1.2% on friday. Asian markets have opened mixed but will improve as the day progresses. As usual operator infected sgx nifty is down by nearly 70 points with low volume to induce a highly negative opening in indian markets so that the external operators can buy indian stocks at lower levels.

For indian markets although the opening will be weak, a lot of recovery will be noticed after the opening. Any gap down opening towards 5000 nifty levels following the sgx nifty will be bought into by the bulls who will try to fade the gap. Traders may wait with patience to enter for fresh trade after second half of the day or can buy around 5000 or lower nifty levels. Option traders may buy 5000 calls as nifty falls towards 5000 or below it and as market rises towards later part of the day can buy a 5000 or lower put. Market will rise after the initial fall as there are no reasons for a fall in indian markets except for operators action to take the markets down in line with other asian markets to buy at lower levels

 

[pranayk]

Chart Analysis

 

[pranayk]

markets for 06 oct 09

as expected markets opened gap down around 5000 levels and after a bounce till 5050 levels, again fell towards the end of the day to test the critical support around 4990 levels. The fall on monday most likely has satisfied dow & sgx operators by at least showing solidarity with dow and its whipping boys in asia. What is important to note is that us markets have already corrected 7 days out of 8 trading days and are ripe for a solid bounce from tuesday after another deceptive move on monday night. The next up move in us markets will take dow above 10000 levels along with s&p 500 above 1100 levels.

For intraday trading on tuesday, bears with try their utmost strength to take nifty below 4989 levels because a fall below 4989 will trigger the breach of the major support level to slip faster to the next support around 4904 levels. However if bulls manage to hold the critical support around 4989 levels and take nifty above 5050 levels then there is every possibility of resumption of the bull run to move above 5100 levels from wednesday onwards to eye for 5200+ levels by weak end.

For tuesdays trading nifty has initial support around 4989 followed by 4978 & then 4966 where bulls may make their last effort to prevent a fall towards 4904. Similarly on the upper side, nifty finds initial resistance around 5020 to 5030 levels above which nifty finds solid resistance around 5040 which is the confluence of 5 emas as can be seen in the hourly chart above. A decisive cross over and sustaining above 5040 can strengthen the bulls to induce massive short covering by bears that can see a sharp up move above 5052 which was the trading high of monday. Traders & investors must keep in mind that, in mega bull markets like we are now, this type of operator induced corrections are the ideal opportunity to go long for great gains in coming days

IN THE HOURLY CHAR ABOVE, IMPORTANT INTRADAY INDICATOR SLOW STOCHASTIC HAS ALMOST BOTTOMED OUT SO THERE IS EVERY POSSIBILITY OF INDICES RISING AT THE START ITSELF. IN CASE INDICES REMAIN FLAT OR WEAK AROUND THE START, THEN ONE CAN INITIATE LONG POSITION AROUND MONDAYS LOWS FOR INTRADAY GAINS.

 

[pranayk]

morning update at 8 am 06 oct 09

as expected, us markets bounced back after 8 days of corrections & after another day of pause will move up sharply towards new highs. Dow was up by 112 points, s&p 500 was up by nearly 2%. European markets which had closed early were up by .75% with uk ftse rising by .7% but spain had a 2% rise. Brazil continued with its consecutive bull run with another 2% gain. Asian markets have opened mildly +ve but will soon gather momentum for a good up move. Most likely big foreign fund houses are withdrawing money from sluggish markets of japan, korea, singapore and putting into emerging markets. So japan, korea & even singapore markets may see weakness for some more days.

For indian markets expect a gap up open above 5050 levels & whether nifty will sustain above 5050 will be decided after the initial battle between bulls & bears. In case nifty sustains above 5050 levels then bears will run for cover and massive short covering can take nifty towards 5080 or even towards 5100 levels. However inability of bulls to take nifty above 5050 levels may see nifty rotting within the range of 5000 to 5050 till half way after which sudden surge may take nifty above 5050 towards 5100 levels.

Any intraday decline should be used by traders to buy good index stocks in oil & gas exploration & infra & metal stocks for good gains. On every decline traders may buy 5000 calls and write 4800 puts and on every rise traders may buy 5000 put and write 5200 calls to carry in the ratio of 2 bought calls to 1 bought put.