NIFTY FIFTY

[AMITBE]

Thrice today the Nifty has reacted at 2902, and up there again.
It's looking tired to me at this point so be cautious.

Taking the above from the last post yesterday to open the day with, yes there was a distinct heaviness in the way the Nifty moved yesterday, especially post noon.
The repeated reluctance to take 2902 was evidence enough, and the laboured high at 2909.35 to me seemed a mere formality to fulfill the promise to complete the trading range for the day.
The fact of closing around 2904 does by no means hold a promise of significant gains as such.
The other noteworthy aspect was that levels lower than 2883, the previous closing, were not tested, and even this does not guarantee the kind of strength needed to thrust the Nifty to higher grounds. 2883 seemed to have survived on account of some leftover residual momentum from the previous day.

In all the above, Im urging extreme caution. Keep diligently booking profits. Else, they have a way of performing the disappearing act with great finesse. Im sure every reader has witnessed this on more than one occasion.
10000 on the Sensex would come not on a trot, but eventually after lower levels are found to hold.

How low would the lows be is not what Im going on to just yet. For that we first need to observe the move when it comes.
However, it may not be frighteningly sharp, as mentioned earlier here. The reason is we are on the verge of the results season. Looking at the way liquidity is pouring down, one can safely expect some pretty decent numbers.
By the same token, there may not be a lot of room left to the up as the anticipated good numbers are getting factored in at a rapid pace.
Past the results what happens is anyones guess.

Volatility is likely to be sharp here on.
The global markets are booming along this morning, yet the sentiment here is going to be extremely cautious.
Beware of any move to the up as its likely to be very speculative in nature.

To the supports first, 2901-2898-2895-2892 are close enough, and 2889 should be one of the strong levels.
Further down 2887-2885-2883-2881-2879. 2877 is another strong supportfor now.
To the up, 2907-2910-2913-2915-2917. 2919-2922 is where we can leave it for now.

2877 and 2889 as mentioned yesterday are firmly in the running for the major turning points. Expect to see some repeated drama around these. Will choose the real one at some point soon.

 

[AMITBE]

Beware of any move to the up as its likely to be very speculative in nature.

To the supports first, 2901-2898-2895-2892 are close enough, and 2889 should be one of the strong levels.
Further down 2887-2885-2883-2881-2879. 2877 is another strong supportfor now.
To the up, 2907-2910-2913-2915-2917. 2919-2922 is where we can leave it for now.

2877 and 2889 as mentioned yesterday are firmly in the running for the major turning points. Expect to see some repeated drama around these. Will choose the real one at some point soon.

The up-down movement is quite surprising as a well defined weakness is what was expected.
However there are no takers above 2910 for quite a while and this itself is an early sign of weakness creeping in.
2884 was the lowest, pretty much the same as 2883 of yesterday.
These levels are not deep enough for a real test I believe. The Nifty may consolidate sideways, but 2884 certainly doesn't appear as the strong base.
To the up, unless 2916 is clearly taken there's no move forward.
This is for the days to come.

For now the trading range appears to be 2888 to 2900 to 2908.
2911 and 2914 are crucial to cross.
Supports given above remain the same.

 

[AMITBE]

However there are no takers above 2910 for quite a while and this itself is an early sign of weakness creeping in.
2884 was the lowest, pretty much the same as 2883 of yesterday.
These levels are not deep enough for a real test I believe. The Nifty may consolidate sideways, but 2884 certainly doesn't appear as the strong base.
To the up, unless 2916 is clearly taken there's no move forward.
This is for the days to come.
For now the trading range appears to be 2888 to 2900 to 2908.

Starting this post from the last one yesterday again.
2910 never got taken out after the early jump that hit 2916 high.
The low never came anywhere near the early dip to 2884 and got arrested at 2892 each time thereafter.
The trading ranged exactly as mentioned above.
So the Nifty has consolidated the last couple of sessions, with not a single move in either direction that would give any indication of what awaits today.
(The only leading clue is the steadily declining a/d ratio which is normally not a good sign for the bulls.)
To mystify things even more, the Nifty in a dramatic and ironical manner, closed on the nose of the twilight zone at 2899.85. Twilight zone, the threshold, a liminal space, the same thing.
Above that level are the sunlight days of 2900 plus, and directly below is the gateway to the gloom of the netherworld.

To go back to some previous comments, the higher levels will come as a matter of course in a bull market, provided the strength lower down is well tested. A sideways move at the threshold of a new bull orbit doesnt inspire a lot of confidence.
In a rush of blood if higher levels are attempted without building the grounds first, unstable volatility would result at the hands of speculative traders.
Im merely building a case for a sensible corrective move which may come soon enough.
Yesterday, take away the Bank Party from the picture and there would have been more than a few alarm bells ringing. The a/d ratio wasnt great either.

Or else, go and without demure collar 2917-2919 for keeps with decent traded volume, and look to an upside from there.

Which bring me back to the post from December 19:

At this point Im raising some interesting possibilities going ahead.
2866 and 2917 are coming up as levels where we may see an important event on the Niftya possible reversal?
There are two sets of dates coming up:
December 23 and 29.
January 3 and 6, 2006.
I may be jumping the gun big time, but this is my work in progress, you see.

The dates have all worked so far, and today is the last one mentioned.
The directional call is difficult so nothing is being emphasised, but the indicators discussed above seem to favour a move downwards.

To supports: 2871 is coming up as a strong support should the market get harsh.
For the rest 2896-2892-2888. Further below, 2884-2882-2880-2877-2874-2871.
To the up, 2902-2904-2906-2908-2910-2912 to 2917 for now.
2922 would be pushing it.

 

[AMITBE]

To supports: 2871 is coming up as a strong support should the market get harsh.
For the rest 2896-2892-2888. Further below, 2884-2882-2880-2877-2874-2871.
To the up, 2902-2904-2906-2908-2910-2912 to 2917 for now.
2922 would be pushing it.

If 2914 is taken, 2917 is next, and then 2920-2923-2926 to 2929.
This is subject to 2917 holding.
Else, expect volatility.

Or else, go and without demure collar 2917-2919 for keeps with decent traded volume, and look to an upside from there.

 

[AMITBE]

If 2914 is taken, 2917 is next, and then 2920-2923-2926 to 2929.
This is subject to 2917 holding.
Else, expect volatility.

2917 has been collared for now, and should the hold on 2917 continue, 2922 and 2925 will stand in the way, and to pass this we'd be looking to 2931, another difficult level.
Going far, yet possible looking at the moves so far.
Will post more if needed.

The midcaps are not joining in, that is the concern.

 

[AMITBE]

2917 was lost and so was everything else.
2877 has held the fall for now, and that also happens to be one of the turning points besides 2889 mentioned.
It seems the play around these levels has begun at last.

For now 2891 and 2899 are the levels to seek for a better position. A break above 2891 will help recovery, even if temporary.
The trading range could be from 2877 to 2880 to 2884 to 2891 as long as 2877 holds firm.
2893-2895-2897 are resistances along the way.
2871 has been mentioned as a likely bottom.

 

[AMITBE]

In the current scenario which is choppy and volatile, it's prudent to use every peak to book profits.
If the stocks one is holding are strong, they'll be available at lower prices later should the market go into a spell of correction.
If it goes higher, it's a chance worth taking.
As long as we have cash in hand there will always be good buys, no matter what.

On a different note, all the dates which were mentioned back on Dec. 19 have resulted in significant moves in one direction or the other.
At 2901 now, we are just about flat with one hour of the session left.
Should that kind of a move come at this point, the direction is anyone's guess.

 

[AMITBE]

At Friday closing, the Nifty did manage to keep itself marginally into the sunlight days of the 2900 plus zone.
This came at the end, after playing with danger and testing support at 2877 in a volatile session. The gloom of the netherworld never really appeared too far.
The major positive was not the marginal 14 point gain but the strong weekly close, which technically keeps the short and not so short term trend in a bullish mode.

That aside, the moves in the latter half of the week never really showed firm conviction to the up.
On the other hand, there seemed evidence of support at every dip.
What seems to have been happening is the buildup of speculative positions in either direction getting covered in a sideways consolidating process.

Yet, a sideways consolidation may not work too well as historic heights lie ahead.
And so, my major concern remains the fact that the Nifty has not quite given due consideration to the lower levels, even as it appears to be poised to attempt higher grounds. The area between 2835-2854 through to 2877-2889 remains unvisited.
Recent history has shown us the importance of building a firm ground before higher levels are successfully attempted.
Sono matter how high things go, the action will inevitably return to these levels or even lower, sooner than later.

Another thought: The market is heading towards the 10000 mark on the Sensex in a frenzy, without due concern for consolidating lower down.
Once that mark and a little more is taken, there will be some hard sell. And pretty hard sell most likely.

Some big results are coming this week and they are expected to be good.
The market is set to climb higher, yet its likely to do so on poor breadth and a/d ratio in stock specific action, except in patches.
Do apply utmost care and caution.

For the levels, 2917 has been named as vital to hold.
Some other important levels to the immediate up are 2924-2931-2938-2945.
Along the way are 2919-2921-2922-2925-2927-2929-2933. 2933 can give a strong fight. Then 2935-2937-2939-2941.
Supports are at 2913-2910-2907-2904-2901-2899-2895-2889.
2881 may be a strong bottom.

As far as days go, today Jan 9 and Wednesday Jan 11 appear to be the movers.

 

[AMITBE]

The movements of the last several sessions for me are very reminiscent of the fight at 2835 quite recently. That level played the jinx over several sessions with the Nifty closing above and around it a few times but never held it for the lack of follow through buying. Then began a string of lower closings and finally a correction occurred to test 2725 intraday. Only after this came the rally which has moved the action to where its now.

2835 was then, and its 2917 now.
Over the last two sessions 2917 is proving to be hard to pin down. 2921 and 2927 were unsuccessfully attempted followed by the closings at 2914 and 2910. Follow through buying support is not happening.
The case for a correction is gaining legitimacy and 2889 and 2877, and even lower levels are still awaiting their dues.

Interestingly, it was the concern over the Reliance demerger that had sharply tanked the market then, and its the anticipated (CNBC) drop in profits in Reliance that could do the market in again.

Im not being a party pooper but merely taking my cues from recent history, the benefits of which are clear to see.
Else, as said before, take and hold 2917, and not merely for a day or two to go higher.
Nothing further to say for now.

The supports first:
2906-2904-2902-2900-2898 are immediately below. Of these the last two are more important.
Further down, 2896-2893-2890-2887-2884-2881-2877. 2874 could be a bottom area.
To the up, 2914-2917-2920-2923-2926-2929-2932 for now, and should the action hot-up to the up, 29335-2938 form the outer band.

 

[koolprakash]

"Interestingly, it was the concern over the Reliance demerger that had sharply tanked the market then, and it’s the anticipated (CNBC) drop in profits in Reliance that could do the market in again."

Amit, what does this mean? Why the reference of CNBC?

Thanks,
Kool