Morning Update at 0800hrs for Intraday Market Level

[pranayk]

morning update at 8 am 27 nov 09

well dubai debt default in the massive property market took the equity world by surprise and after more than 2% fall in indian markets, other world markets started to fall one after the other. Although us markets were closed on thursday & will only be opened for 1 hour on friday, dow futures falling by 1.6% kept the bears across the world quite cheerful. European markets fell by more than 3% with the fears that most of the european banks might have exposure to the dubai debt. Brazil which was up by nearly 1% on wednesday, fell by 2.3% on thursday.

Asian markets like japan, singapore & korea which did not fall on thursday have opened weak and are down by nearly 2%. Hong kong markets which have larger exposure to property markets across the world are like to fall badly again. Mysterious chinese indices will fall again from where they had left on thursday. But, since most of the asian markets were either sluggish or were weak since last couple of days, there is every likely hood of a smart recovery in these markets after initial fall.

For indian markets, the saving grace is that it had fallen in advance yesterday by more than 2% and secondly non of the indian banks have exposure to dubai debt & thirdly non of the indian property markets or banks have large exposure abroad. So keeping all these factors in mind, it gives the right opportunity for indian traders to fade the opening gap down in nifty for quick gains. After initial breach of the support around 4970 levels, there are strong supports for nifty around 4925 to 4944 levels & till such time nifty spot does not decisively close below 12th nov low of 4925, there should be no fear for the bulls.

Although there are no internal factors that can bring down the markets much further down from here, yet panic generated by dubai debt crises & the uncertainty looming large for next week, it is wiser to have both calls of 5100 & puts of 5000 or 4900 in equal ratio for next week.

 

[pranayk]

CHART ANALYSIS

 

[pranayk]

weekly general markets analysis for week ending 4th dec 09

the week which had started with much hope for the bulls after the previous friday 20 nov big single day rise in index from the lows of 4933 to 5063, could not live up to its expectation and nifty could barely manage to reach till 5141 during the week unable to breach october highs of 5181. The last two days of the week saw a massive fall from the high of 5141 till 4808 by a master stroke with precision timing, played by international operators in the name of dubai debacle to achieve their aim. Traders must be absolutely sure in their mind that the operators game is not yet over and some more nasty surprises are lined up to surface after the hoax on dubai debacle dies down.
So, till such time nifty does not decisively breach the november highs of 5141,every intraday rise offers ruthless shorting opportunities for short term traders. Short you must, but have tight quit points just above the intraday swing high of 5 or 15 minute time frame in order to avoid getting trapped. However amidst the gloom & doom generated by international operators, should nifty manage to decisively breach 5141, then there is every possibility of resumption of the bull run to much higher levels towards 5299 or even 5555 during the month of december.
It is interesting to note that during the 2 days of savage falls, nifty had fallen by 6% from thursdays highs of 5116 till fridays lows of 4808. After a sharp bounce back on friday from lows of 4808 by the rear guard action of the bulls, the weekly closing was at 4942 compared to its previous weeks closing of 5052, a total weekly loss of 110 points a little more than 2% loss. If one compares the indian markets to dow, it is interesting to note that in spite of a 154 point fall on friday 27th nov, dow closed at 10310 absolutely flat compared to its previous week ending 20 nov closing of 10318. Brazil interestingly had a +ve weekly closing at 67082 compared to its previous weeks closing of 66327.similarly uk ftse closed flat at 5246 compared to the previous weeks closing of 5251.
However compared to us, european and latin american markets, asian markets have fallen miserably being decisively fooled by the western operators. Most likely almost all the asian markets will show a solid bounce starting from monday. European markets had a good bounce on friday & very rarely one finds european markets rise by more than 1% when us markets are falling. For indian markets, although it has the funny habit of keeping one leg on the western side and the other on the asian side, one should not be surprised to find indian markets sandwiched between western & oriental operators to to dance to both the tunes by remaining flat between november highs of 5141 & recent lows of 4808 for next couple of weeks. A decisive breach on any side will show a substantial move in the direction of breach.
An upward breach of 5050 will perhaps be the initial indication of resumption of the up move towards november highs of 5141 to eye for october highs of 5181 & a decisive breach of fridays lows of 4808 can certainly slide nifty towards 4700 levels to eye for november lows of 4540.in case nifty is unable to cross 5050 this week then traders may boldly display their shorting power by ruthlessly hammering nifty futures out of shape towards 4700 or lower levels. Similarly in case nifty manages to cross 5050 and stays above it then bulls may just grab the opportunity by going boldly long to eye for october highs of 5181 followed by 2nd may 08 highs of 5299.

 

[pranayk]

weekly technical analysis for week ending 4th dec 09

in spite of 2 days of savage falls on thursday & friday, the monthly as well weekly indicators have not undergone any significant change as compared to last week. Hence the paragraphs of last week pertaining to monthly & weekly indicators are reproduced under without any change. However there are changes to the daily indications & hence the paragraph on daily indications are fresh for the week.
As regards monthly indicators are concerned,technically, the markets look extremely bullish for further up move. During the month of november, indices have breached the lows of both october and september month also .so, dont be surprised to see indices moving up to breach the highs of both these months with sept high at 5087 & oct high at 5181 by end of the current month. There are no changes to the indications given for the monthly charts last week which are as follows:-
the perfect doji of august month with its top at 16002 & 4744 having been decisively crossed in september should at least see 3 months of higher highs taking it to november end to make higher highs every month, even it can go to consecutive 5 or 8 months of higher highs in monthly charts. Both simple & exponential 20 month moving average coming from above the 50 month ma and turning upwards without breaching 50 mma is a mega bullish signal for the long term.8 month simple moving average coming from below 20 month sms and breaching it to move up above both 13 month & 20 month sma during the month. Also 13 month ems has breached 21 month ema & is moving up. These ma cross overs are occurring for the first time after the onset of previous bull market in april 2003. This ma cross over in monthly charts has the potential for another 3 to 5 years of bull run to which long & medium term investors should take full advantage of as we are presently in the initial stages of a mega bull market that started in march 09 & may go up till 2013 as per long term monthly charts. Hard core short term traders should keep at least half of their money for long term investments in their favorite stocks and carry on with short term or day trading both on the long & short side as per short term market movements only in balance half of the money to take full advantage of long term bull market.

The weekly charts too have started to generate bullish signals during the up move for last three weeks after the 2 weeks of big falls from 5181 till 4540.weekly stochastic without entering the lower zone has started to turn up which is a strong signal for another big up move. Similarly weekly adx also is generating a strong bullish signal. Amongst all the weekly indicators, weekly ichimoku is showing the strongest signals for resumptions of bull run for new highs. Weekly relative volatility index has shown signs of resumption of up move. Weekly nvi rising continuously non stop even during the fall from highs of 5181 till lows of 4540, indicates heavy hidden buying by informed sources on index heavies that will take the markets to much higher levels.

As was mentioned during previous weeks certain mega bullish weekly indications like 50 week ema decisively crossing 200 week ema in the 5 year long term weekly charts in it self can single handedly take the indices above the all time highs of 21207 & 6357 in coming weeks. Secondly, the clear cup handle formation between 12 june & 28 august with base at 3919 & neck line decisively breached around 4744 can easily take nifty to cover the depth of the cup by moving up till 5555 magic levels. A much larger reverse head & solder formation being made by joining the solder line between the weekly highs of 4680 for week ending 20 june 08 & high of 4731 for week ending 7th august 09 with head at the october 08 lows of 2252. These are strong long term bullish signals that encourages long & medium term investors to boldly go long on every decline of markets for super gains in coming months.

In the daily charts, the 2 days of savage falls have weakened the daily indicators. As can be seen on the daily eod chart above, slow stochastic has dropped down from the upper zone & is about to breach the neutral line to enter the lower zone. Both %k has decisively breached %d and both have fallen out of the upper zone. Rsi has gone below the 50 mark to 47 levels is another sign of weakness. Daily macd also does not give any encouraging signal. The saving grace in the daily charts is, nifty having closed at 4940 on friday has managed to close above 20 day sma around 4937 but still short of 50 sma at 4970 and 34 day sma at 4965. Should nifty manage to move up & close above both 34 dma & 50 dma at 4970, then there are ample chances of nifty resuming the up move.

 

[IAtma]

don't know .........

but what if nifty touch 4700 and bounce back .....??

yeh........5181 unchangable.......for few weeks.....

 

[pranayk]

elliott wave count for week ending 4th dec 09

as can be seen in the daily eod chart above, nifty is still within the 1st sub wave of 3rd up wave. Of this 1st sub wave of 3rd wave, 4 sub sub waves are complete as on 3rd nov lows of 4540 and the 5th sub wav which has started from 3rd nov lows of 4540 has completed its 1st up wave at wednesday 25th nov high of 5141 and 2 days of savage fall was the 2nd wave that came down till fridays low of 4808. The 3rd sub sub wave has started from the fridays lows of 4808 and under normal circumstance should cross the highs of 5181 to move towards 5299 levels to complete the 1 sub wave of the 3rd up wave.. Other waves of the ew count from start of the fresh bull market are as under:--

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. Till now we are perhaps still in the 1st sub leg of this mega 3rd wave. Of this 1st sub leg, on 4th august the 1st sub sub leg of the 1st sub wave of this 3rd wave was completed with the highs around 4731 and the 2nd sub sub leg abc downward correction started. The 2nd sub sub leg of 1st sub leg of the 3rd wave was completed on 19th august at the low of 4353.

The 3rd sub sub leg of 1st sub leg of 3rd wave has perhaps been completed at the high of 5181 and the recent fall till 3rd nov 4540 was the 4th sub sub leg of 1st sub leg of 3rd wave. From the low of 4540 the 5th sub sub leg of 1st sub leg had started which under normal circumstances should go higher than 5181 to complete the 1st sub leg of mega 3rd wave.

 

[pranayk]

fibonacci levels for nifty

confining to the fibonacci count from the 3rd nov low of 4540 till 25th nov high of 5141 which was about 600 points, various levels of downward retracement were 38.2% around 4911, 50% till 4881 and 61.8% till 4810. On friday 27th nove nifty corrected to 4808 levels which can be presumed to be the 61.8% correction of the entire up move of 600 points from 3rd nov lows of 4540 till 25th nov highs of 5141.

 

[pranayk]

weekly trading range for week ending 4th dec 09

for the coming week nifty spot most likely will be confined to the lower side support level of 4872 and higher side resistance level of 5050 or at the most 5140. A decisive breach of 4870 to 4860 may see bears regaining the initiative to hammer nifty downwards till 4700 levels after breaching 27th nov lows of 4808. Similarly a decisive breach of 5050 on the higher side will take nifty towards last weeks highs of 5141, a cross over of which bulls will regain full control that may see bears scrambling to cover their shorts that may see a sharp up move past october highs of 5181 towards may 08 highs of 5299.

 

[pranayk]

markets for 30 nov 09

the new week opens with the back drop of dow falling by 154 points on friday night, no where near the 300 point fall in dow futures on friday during asian trading hours that created havoc in asian markets. The moment european markets realized that the so called dubai debacle was more of a precision timed master stroke played by international operators, these european markets gradually started to recover that saw indian markets bounce from around 1.15 pm onwards. Not only european markets closed up by 1% to 1.5% on friday, even brazil closed 1% up on friday to have a +ve weekly closing. Be absolutely sure to see some thing or the other associated with dubai debacle will keep on raising its head every day that will keep the operators game plan alive.

On monday, most of the asian markets are likely to have a strong opening baring singapore, malaysia & indonesia. Dow futures may be negative throughout the day to induce a negative sentiment in asian markets that may dampen the spirit of the asian bulls. For indian markets although one can expect a bullish opening, yet till such time nifty spot remains below the critical level of 5050,there will always be the fear of falling pray to the hands of international operators again. In fact amongst all the developed, developing and emerging markets, india is least impacted by the dubai crises but has been hit the hardest by the operators action during the last 2 trading days.

For intraday trading on monday, nifty spot finds initial support around 4933 to 4922 levels below which trigger happy bears may try shorting till 4900 or lower levels. On the higher side, there is every possibility of filling up of the entire gap of friday till about 5000 levels. Should nifty move further up, then traders may short nifty around 5020 to 5030 levels with must quit above 5040 or 5050 levels. Inability of nifty to cross 5040 or even 5020 should encourage bears to try shorting with tight quit point above 5040 levels. In case nifty spot manages to cross 5020 & more importantly 5040, then heavy buying by bulls coupled with blind short covering by bears may see a sharp spurt in nifty. Long & medium term investors must make full use of such big falls to quietly accumulate pharma, power, oil & gas and infra stocks for good gains on resumption of bull run.

 

[pranayk]

morning update at 8 am 30 nov 09

asian markets have opened strongly following entire european and brazilian markets which had closed up by more than 1% on friday night after realizing that the dubai crisis was blown out of proportion. One should not be surprised to see entire loss of thursday & friday being wiped off by asian markets either on monday or by tuesday. Singapore which was closed on friday, did not participate with rest of asian fall on friday, so sgs may trade in red today.

For indian markets, as it is least affected by the dubai crisis, one can expect a big gap up opening above 5000 nifty levels covering the entire gap of friday. Having covered the entire gap, it may remain flat for some time where further buying interest may take nifty above the critical level of 5020 followed by 5040.the volume seen on friday was the largest volume on any post expiry day and as per volume charts, most of the volume came after 1 pm on friday when nifty started the bounce back from the lows of 4808 levels showing that nifty bounced up on heavy volume buying which is a bullish indication.

A cross over of 5020 followed by 5040 may see heavy short covering that may take the markets further up and the possibility of nifty making a new yearly high above 5181 during this week is quite high in case nifty sustains above 5050 levels. The gdp numbers to be out around 12 pm today may not be that exciting and may impact the markets for a few seconds only in the form of a blip.