NIFTY FIFTY

[SGM]

So where to from now.
To the up, come what may, but to the down what are key levels as supports.
Friday close at 3454.80 is itself holding slightly above two key levels at 3425 and 3442.
3409 and 3393 are further below. 3377 and 3361 come next.
3345 and 3329 at this time appear likely major key supports.

Hello Amit,

The market ploughed thrugh the congestion and countless support levels. I liked the "To the up, come what may" in your post, btw all my positions got stopped out, so the question for me is where do i start buying 3345, 3329.......3250, or .... plz guide.

Regards
Sanjay

 

[AMITBE]

Well, bulls too are the good lords creation after all.
This is not to say, that for this reason they too are vulnerable and will cyclically perish. That they will in any case.
But as the good lords creations they too seem to have guardian angels whispering vital commandments into their ears.

Its another matter that for our kinds of snorting bulls, these commandments are scripted by a bunch of corporeal, mortal beings at officiating bodies such as NSE, SEBI etc:
In another case of news induced correction, yesterdays fall is being attributed to the new pronouncement, specifying an increase in exposure margins in cash and derivatives, causing the wide based sell off. The ramification of the rule is anybodys guess.
Oh well, its good to know that the madly snorting bulls listen to somebody at least.

The fall comes at an interesting time with results beginning to trickle in, and Infy and Satyam announcing bonuses with Infy slated to deliver the numbers tomorrow.
Whether this rather sharp pullback is going to herald the start of the much hyped correction or not, time will tell. Not a lot of time at that.
Obviously, much would depend on how the new rules would be digested by big players, and also on how soon the big players see value emerging in the fall.

I personally believe, if the big money has a big enough thinker, then a cautious sideways correction could emerge as the likely scenario.
That theres a lot of big money lying about is well known.

On to levels, the key levels in the preceding posts are still good for me as of now: 3361-3345-3329 are still to be challenged from the ones already mentioned. Lets see what happens to these first, before looking lower down.

For today, Im looking into some long range data to determine conflict levels, and so a few may go off the mark. However, they should mostly be in line.

To the down, 3375-3369-3363-3357-3351-3345-3339-3333-3329.

To the up, 3384-3387-3393-3399-3405-3408-3412-3421.

 

[AMITBE]

On to levels, the key levels in the preceding posts are still good for me as of now: 3361-3345-3329 are still to be challenged from the ones already mentioned. Lets see what happens to these first, before looking lower down.

For today, Im looking into some long range data to determine conflict levels, and so a few may go off the mark. However, they should mostly be in line.

To the down, 3375-3369-3363-3357-3351-3345-3339-3333-3329.

To the up, 3384-3387-3393-3399-3405-3408-3412-3421.

So 3329 finally got stung by the kiss of death.

For now I'm back to looking at short range intraday data to seek levels lower down, rather than look for long range key supports already.

3316 is a critical level.
3309-3302-3295-3288 are further below.

To the up 3318 and 3326 are important to hold.
Above 3332-3335 may be more stable.

 

[leemus]

Hi there.....could you possibly shed some light on these rule changes please? Or maybe point me in the right direction to any articles on the internet? Many thanks

 

[AMITBE]

Hi there.....could you possibly shed some light on these rule changes please? Or maybe point me in the right direction to any articles on the internet? Many thanks

Hi leemus, I suppose the new rules are partially responsible for this major shake out. The valuations have been way beyond the rationale in any case.

From what I know, the rule applies to FIIs and from April 17 on they'll need to pay out 50% more margin to hold positions, or to take new ones.
They have been the big sellers last few sessions, and quite likely this is being done to bring their existing margin money to fall within the new mandated limits.

The circular is available here: http://www.sebi.gov.in/circulars/2006/fii2006.pdf

Regards.

 

[leemus]

Thank you very much

 

[AMITBE]

So 3329 finally got stung by the kiss of death.

For now I'm back to looking at short range intraday data to seek levels lower down, rather than look for long range key supports already.

3316 is a critical level.
3309-3302-3295-3288 are further below.

To the up 3318 and 3326 are important to hold.
Above 3332-3335 may be more stable.

With 3288 surviving at the low of 3290, and then coming up past 3335, there's been a marked drop in extreme volatility.

At 3368 now, should 3370 be taken and held, the step up levels would be 3380-3385-3390 etc.
Subject to 3370.

Supports are same as in the morning post.

 

[AMITBE]

With 3288 surviving at the low of 3290, and then coming up past 3335, there's been a marked drop in extreme volatility.

At 3368 now, should 3370 be taken and held, the step up levels would be 3380-3385-3390 etc.
Subject to 3370.

Supports are same as in the morning post.

Coluld never really get to 3370 finally, and that's ok in these times with a long weekend coming on.

It's a good idea to rummage through the bits and pieces of a week like this.

The downside is still not fully clear. This has been the first week after many when we've seen a pullback, of almost a hundred points week on week.
It's early to say if this is going to lead to further shakeouts, or it's been a pruning down in passing. We are far from making lower lows yet.

For today, that the Nifty closed with a recovery in progress on a well fought out session is a decent enough sign.
A hundred points push to the down from the day's high would normally be enough to squeeze the bulls out of the ring.
But not so, looking at the nearly ninety points charge from the day's low.

As for the major levels being written of lately, 3361-3345-3329 that remained untouched till this morning, go their due salutations...and didn't quite get blown away for all the adulation.
The return charge took these levels back and more, and the end came bang on to 3345.

Numbers are all we have in this game, and the way these numbers panned out today, speaks of underlying strength in no uncertain terms.

The intraday chart is attached...it's quite interesting.

Have a nice long one all!

 

[leemus]

Thanks for the info.......it's all appreciated.

 

[clueless]

Hi Amit,

indeed a very interesting intraday chart. Being a noob, its one of my first instances i have seen such a neat down trend line and could we call the bottom half a reverse head and shoulder? and again a bit of a neat recovery attempt.

With so many things going wrong, the only good thing was to see the chart form!!

cls