Morning Update at 0800hrs for Intraday Market Level

[pranayk]

weekly markets analysis for week ending 16 october 09


the first long 5day week after 2 truncated weeks ended almost near the lowest point of the week with both sensex & nifty closing down by nearly 3%on a week on week closing basis. Compared to indian markets, rest of all the world markets had a highly bullish week. Dow was up by 4%.brazil to which indian markets are generally compared, moved up by nearly 5%.uk ftse & australian markets moved up by more than 3%. Except for korea which closed flat but at the highest point of the week, all the rest of asian markets were also up. Japan up by 3%, singapore & taiwan up by 2% each & hong kong up by nearly 5%.well, against this buoyant world markets why indian markets fell by nearly 3% that too with index heavy reliance announcing 1:1 bonus & infosys announcing better than expected results? Well, the reason is very simple "operators & only operators action & nothing else".
These external operators in the name of hedge funds & some fiis have infected indian markets beyond repair & will continue to dominate indian markets till such time drastic action initiated by authorities to curb operators as well as insiders action. Long & medium term investors need not worry at all as operators action does not impact long & medium term investors. Operators actions are mostly targeted at intraday & short term traders which comprise 90% of daily business in both the exchanges. "operators action" now a days is the strongest leading indicator compared to rest of the indicators in technical analysis. Even fundamental analysis has no role to play in present operators & insiders infected markets. So while analyzing index or a stock, having analyzed fundamentally & technically, keep likely operators as well as insider action at the top of the analysis & you will surely be a winner. Be sure about it.
Coming week ending 16th october will also be a truncated week with bse & nse being closed for trading on tuesday 13th october due to maharastra assembly elections. Its next week also is a truncated week with holiday on monday 19th october. So one should not expect much of fire works during the week with operators taking full advantage of truncated weeks. The fact that the week has closed near its lowest point, there is every possibility of a sharp up move during the week leading to diwali night in case operators dont plan to take nifty below 4900 levels to flush out most of the weaker hands to ruin their diwali. Technically, there is every possibility of both sensex & nifty moving up to test last weeks highs of 17121 & 5077 around diwali in case sensex & nifty do not fall to close below 16495 & 4900.(to be updated further)

 

[pranayk]

Weekly technicals for week ending 16 october 09

monthly charts continue to generate bullish signals. 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 20 month sma during the month is 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.
In the weekly charts the best weekly long term japanese indicator the "ichimoku" continues to generate strong bullish signals with all the three the price, the tencan & the kijun remaining one above the other and all these three remaining above the cloud area. Weekly relative momentum index above 79 looking further up indicates further up move during the week. Trend following indicators like weekly rsi around 65 and both weekly stochastic and w%r are safe in the upper zone and give no signs of over sold levels.

As was mentioned during previous weeks, in addition to the weekly indicators above, there are 3 distinct indications that depict strong bullish signal in the weekly charts. Firstly, this weeks weekly closing of nifty at 4945 & previous weeks closing at 4983 & its previous weeks closing at 4976. So all 3 weeks had decisively closed above 4693 which was the high of the perfect doji which was formed for the week ended 12 june 09.this closure of nifty high above the doji was also accompanied by decisive breach of the resistance line which is a perfect bullish trade setup "hcd" & is a mega bullish signal to go long on every small decline. This trade set up can only be nullified by a fall in index to close below the resistance line as well as below the low of that doji at 4365 which can only happen under catastrophic circumstances. Secondly, 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. Thirdly, 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.

These many bullish indications mentioned above are enough for the bulls to rejoice about without even thinking about the 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.well, bulls may think of it only after nifty falls to test the neck line around the 4780 levels to bounce back in lightening speed to shoot past the all time highs.

Contrast to the bullish indications in the monthly and weekly charts, the daily charts dont paint such a rosy picture. During the week, nifty deceptively closed at 4945 just below the very short term closing level of 4959 around which also runs the 20 day sma. However it closed above the closing support line coming from closing levels of 13 july or even from 9th march. A close below 4930 or more importantly below 4900 can certainly weaken nifty temporarily as per daily charts. In the daily ichimoku, although price has breached tencan, since price & tencan and also chikou are above kujin & all these 4 are high above the cloud zone indicate that the fall last week that too the fall on friday with very low volume was temporary in nature and bull phase indicated by ichimoku will resume soon towards new monthly highs. Daily stochastic nearing the lower zone in the chart above indicate up move to resume soon.

 

[Class]

Short week this week too!

October 13th Markets are closed for holiday.

http://www.nseindia.com/content/circulars/cmtr13194.htm

All the best,

 

[pranayk]

elliott wave count for week ending 16 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. The 2nd sub wave of the 3rd wave was completed on 19th august at the low of 4353.

The 3rd sub wave of the 3rd wave which is the longest sub wave will similarly have 5 legs with 3 up & 2 down waves. As of now we are still in the 1st sub sub leg & within this in the 4th sub sub sub leg of the 1st sub sub leg of 3rd sub wave of 3rd wave. These are marked in the daily eod chart above. Most likely the 4th sub sub sub leg has ended on friday and possibly the 5th up sub sub sub leg towards 5200 levels will start from this week.

 

[pranayk]

fibonacci levels for nifty

from the trading high of 5099 on 1st october, nse index has made a low of 4921 on 6th october. So assuming that further fall may not come, various fibonacci retracement levels that may pause the markets for a while during the upward journey are:-- 38.2% around 4990, 50% around 5010 & 62.8% around 5031.

 

[pranayk]

Weekly trading range for week ending 16 october 09

the week having 4 trading days with 13th being a trading holiday, the broad range for nifty may be confined to 5077 on the higher side and 4920 on the lower side. The decisive cross over and sustaining above 4990 may be the initial signal to boldly go long for further up move towards new highs. A decisive cross over of 5041 followed bt 5077 may confirm the on set of new up way when traders may add more longs towards another monthly high of 5166.however if nifty falls to close below 4920 and more importantly below 4900 then there is every possibility of testing sub 4800 levels in quick time and all hopes of card players to enjoy the diwali table with its favorite number of 52(5200) may melt away like ice within the fire crackers of the operators.

 

[GuluGulu]

Great analysis Pranayk. You are really one of the real gem in TJ forum. If anyone just read your analysis and follow Savantji's reco, then (s)he will definitely be a winner.

May God bless all of us.

GG

 

[pranayk]

markets for 12 oct

the diwali week with 4 trading days, opens on monday at the back drop of bullishness all around the world markets last week with indian markets left alone to cry in the wilderness. Having closed the week at 4945 much below the last weeks closings of 4983, generally indicates some sort of likely rear guard action by the bulls to take nifty up to a respectable neutral level of 4990 or 5000 levels on monday to at least bring in some new hope for wednesdays trading with trading holiday on tuesday. Technically the indices are almost in the oversold zone and a sharp bounce can not be ruled out on monday morning.

Interestingly, indian markets did not move in line with other world & asian markets last week, so in case asian markets open negatively on monday, which is most likely, then indian markets may move on its own to again defy asian markets. Although this will encourage the bulls who were waiting patiently for the right opportunity, yet the operators will still try to break the back bone of the bulls by bringing nifty below the make or break support levels around 4920 to 4900 levels.

For intraday trading on monday, if bulls manage to take nifty above 4969 and hold it above this level, then a sharp move towards 4990 to 5000 can easily be expected due to short covering. Bulls may retain full initiative in case they manage to hold nifty above 4990 or more importantly above 13 day sma around 5006.inability of the bulls to hold above 4990 can weaken nifty to again fall towards 4930 nifty levels that may threaten further falls if trades below 4920.since daily stochastic in the daily eod chart is nearing the bottom zone, there is every possibility of a sharp rebound during next couple of days if stochastic without entering the lower zone turns up from here.

 

[vinaydas]

thanks a million for the brilliant analysis.
so far i have been a silent spectator of your thread
keep up the good work .

 

[pranayk]

morning update at 8 am 12 oct 09

after having a bullish week till last friday, asian markets have opened mixed but will continue with the bullishness for the initial part of their trading and may look subdued around the time of opening of indian markets. Although asian markets may not have that big impact on indian markets, expect a good bounce in indian markets today. With so many holidays before expiry. Option buyers should be a bit cautious in buying and holding options to avoid seeing zero value in these options. Writing of 5200 call on market rise as well as writing of 4800 puts on market falls may be profitable by expiry.

Traders may resort to buying trade in futures above index level of 4952 with quit below 4920 index levels. Sectors of telecom, oil & gas exploration & cement stocks may show good bounce before diwali and may be accumulated on declines for quick gains.