Morning Update at 0800hrs for Intraday Market Level

[pranayk]

weekly trading range for week ending 23 october 09

the week having 4 trading days the broad range for nifty may be confined to 5168 on the higher side and 5042 on the lower side. The decisive cross over and sustaining above 5168 may be the initial signal to boldly go long for further up move towards new highs towards 5255 which looks highly unlikely for the week ending october 23. On the lower side a decisive breach of 5115 on any day can bring down nifty to the next critical support of 5077.in case this critical support around 5077 is decisively breached then it may take nifty down towards 5040 followed by 5000.

 

[pranayk]

markets for 20 oct

the new week opens at the back drop of solid cues from asian & european markets on monday to which indian markets missed on monday being a holiday for indian markets. So in case of buoyant us markets on monday night which although is most unlikely, one can expect a sharp gap up opening in nifty above the critical level of 5168 to move towards 5200. Govts decision to divest 5% of index heavy ntpc may add to the bullish sentiment that may add to the gap up opening on tuesday morning.

For intraday trading on tuesday, if one has a closer look at the intraday chart above, one will notice that nifty has strong intraday support around 5115 to 5125 levels. A decisive breach of 5125 will be the first signal for a bigger fall towards sub 5100 levels. Similarly on the higher side a decisive breach of critical fibonacci resistance at 5168 during actual trading can open the flood gates for a sharper up move towards 5190 followed by 5200+ levels.

Although the mid week may see a pause, the bullish momentum is very much on, and as long as nifty does not decisively close below the critical level of 5070, traders may continue to remain long and add more long positions on every intraday decline towards 5100 levels.

 

[pranayk]

morning update at 8 am 20 oct 09

expectations of more good quarterly numbers saw dow rise by another 96 points having earlier crossed 10100 levels. S&p500 similarly tested the critical 1100 mark. European markets were up from 1.5% to 2% with uk ftse rising by 1.8%. Brazil continued with its mega bull run with another gain of 1.5%.asian markets although have opened strong may give up gains as these had a big rise yesterday also when indian markets had a holiday.

For indian markets, one can expect a sharp gap up opening above 5168 levels and indices may quickly try to reach 5200 levels. More longs may be added on breach of 5168 levels by nifty during actual trading. Tech, auto, banking, metals as well as cement & infra stocks may see sharp gains. Option buyers need to be a bit cautious and must at all costs avoid to see their bought options reaching zero value as expiry is nearing. Traders holding lower calls of 5000 may write calls of 5200 on market rise. Similarly on intraday corrections, traders may write 5000 puts by holding on to 5100 puts.

 

[pranayk]

Chart Analysis

 

[pranayk]

markets for 21 oct


as expected nifty opened gap up above the critical fibonacci level of 5168 but could not sustain above this critical level of 5168.from an initial sharp burst high of 5182, it kept on falling gradually & almost breached 5100 by making a low of 5102.the entire world markets have been up for last 2 days. Asian markets were also up for last 2 days, but why indian markets are unable to sustain at higher levels and continued to fall in spite of good economic news and great news on disinvestment? Well the reasons are very simple & just left to your imagination. Knowing the nature of dow to have a deceptive fall after crossing & closing above 10000 mark, indian markets perhaps acted in advance and this pause may continue for a day or two more to muster enough strength for another sharp break out above 5200 levels.

For intraday trading on wednesday, in case the asian cues are not favorable, then expect nifty to find initial support around 5094 levels followed by make or break support at the neck line of 5077. A decisive breach of 5077 can bring down nifty to 5066 followed by 5040 or lower levels. On the higher side nifty finds initial resistance around 5122, a decisive cross over of which may see a sharp move towards 5135 followed by 5146 to 5152 levels. A cross over with volume and sustaining above 5152 may induce heavy short covering to take nifty past the critical level of 5168 followed by a sharp up surge towards 5200 levels past tuesdays high of 5182.

If one has a look at the hourly chart above, one will notice that important indicator slow stochastic has nearly bottomed & is likely to show a sharp bounce after initial fall. Both 50 & 200 ema looking up may see a sharp bounce in slow stochastic that may take nifty at least nearer to tuesdays highs of 5182. In the hourly chart above, 50 ema around 5088 should provide strong support for nifty on wednesday

IT IS INTERESTING TO NOTE THAT AS OF 20 OCT NIFTY HAS ONLY GAINED 5% DURING OCTOBER FROM A LOW OF 4921 TO TUESDAYS HIGH OF 5182 WHERE AS BRAZIL HAD GAINED MORE THAN 13%,DOW HAD GAINED MORE THAN 8%. IN ASIA EVEN HONG KONG HAD GAINED MORE THAN 10% IN OCTOBER FROM LOW TO HIGH. HENCE ONE CAN SEE A CORRECTION IN US & BRAZILIAN MARKETS ON TUESDAY NIGHT TO BE FOLLOWED BY HONG KONG AND OTHER ASIAN MARKETS ON WEDNESDAY MORNING. IN FACT IN SPITE OF GOOD ECONOMIC NEWS, INDIAN MARKETS HAVE BEEN ONE OF THE WORST PERFORMERS DURING OCTOBER WHEN COMPARED WITH US AND OTHER EMERGING MARKETS WHICH SHOWS THAT THERE IS A LOT OF ROOM FOR FURTHER UP MOVE IN INDIAN MARKETS IN SPITE OF CORRECTIONS IN OTHER MARKETS..

 

[pranayk]

morning update at 8 am 21 oct 09

last night dow recovered from a near 100 point fall to close at 50 point negative. Brazil too which was more than 5% down , recovered to close at 2.8% down. European markets were down from nearly .5% to .8% with uk ftse closing down by .7%.asian markets which were up for last 2 days in a row have opened in the red and may continue to fall at least till opening of indian markets.

For indian markets expect a sharp recovery after the initial dow induced fall. As explained above, besides being the worst performer during the month of october on a low to high basis, indian markets are also the worst performers on a closing basis. On 30 sept 09, nifty had closed at 5084 and on 20 october it has closed at 5114 with even less than 1% rise on a closing basis. Where as dow even after the fall last night, is still up by more than 3% , brazil after 2.8% fall last night is still up by more than 6%. Most of the emerging as well as asian markets have performed better than indian markets on a closing basis from september 30 closing till the closing on 20 october with hong kong performing higher than 6.8%.

Keeping the above factors in mind, traders & investors must take full advantage of this operator manipulated weaker performance of indian markets in spite of better than expected economic news & quarterly results, to buy and accumulate on every operator manipulated decline in the markets for very good gains in coming days.

With expiry nearing, it seems operators may not allow nifty to close above 5200 levels. So option writers may short 5200 calls of october on market rise & with it buy & hold on to november futures on market falls. Option buyers of october series should be cautious in carry over of bought options overnight & should trade intraday with early quit on small loss and book profit as it comes & quit by end of the day without carry over.

 

[pranayk]

Chart Analysis

 

[pranayk]

markets for 22 oct


as is mentioned in the weekly analysis below, indian markets are undergoing a pause during this week which may continue for another day. As can be seen, the volume during the fall is quite low meaning that the fall is clearly induced by operators action and is likely to continue for some more days as operators are bent up on closing nifty around or below 5000 levels on this expiry. So one should be prepared for this operators infected correction with alternative days of rise & fall till expiry. Long term investors must make full use of this operators action to buy stocks of oil & gas exploration, infra, pharma and cement stocks for very good gains in coming days. Future traders who hold positions, should buy and hold these futures of november series on every decline of markets towards 5000 levels.

For intraday trading on thursday, nifty finds initial support around 20 sma area of 5042 to 5034 a breach of which can invite ruthless shorting towards sub 5000 levels. On the higher side a decisive cross over of 5085 may bring some hopes for the bulls to again move towards 5100 levels however till such time nifty remains below 5120 levels, bulls have to bow down to external operators who will do whatever they want for next couple of days with the help of index heavies like reliance, sbi, icici and others. Intraday traders are advised to limit their trading to intraday trading only for next couple of days and may resort to shorting futures as long as nifty remains below 5120.

If one has a look at the chart above, one will notice that intraday indicator stochastic has bottomed out and any time a sharp intraday bounce may be expected. Secondly, the fresh up move that has started from 9th oct lows of 4934 has moved up till 20 oct high of 5181. So as shown in the chart above , it has retraced 50% till 5057 and next 61.2% fibonacci retracement comes till 5030 from where some bounce may be expected.

 

[pranayk]

morning update at 8 am 22 oct 09

as was predicted earlier, dows 10000+bonanza came to a halt & having remained above 10000 for 2 to 3 days it corrected to close below 10000.on wednesday night it was trading at 40 to 50 point positive till last half hour of their trading and a sudden operator driven fall of 130 points during closing minutes from 10080 to 9950 made it close 92 points in the red. European markets which had closed when dow was trading +ve, closed mostly in +ve with uk ftse closing up by .3%. Brazil to closed mildly +ve with a .3% gain. Asian markets as usual will trade in red affected by last minute & well coordinated operator driven fall in dow. See how just a few minutes of operators trade in the closing minutes in us markets can influence world markets.

For indian markets, as was predicted, the pause in the bullish momentum is likely to continue today also and nifty may even come nearer to 5030 or lower levels as big operators who have sold much above 5100 levels will bring the markets down with low volume to enter longs for november month at lower prices. So, as long as nifty does not move up to trade above 5120, traders may use this opportunity to ruthlessly short the markets and write 5200 calls on every intraday rise towards 5100 levels. However, long & medium term investors may use this fall towards 5000 nifty levels to add pharma, oil & gas exploration, power, infra & cement stocks for good gains in november.

 

[pranayk]

Chart Analysis