11 Dec'08: Correction Pending

Yesterday nifty opened in the positive region as expected. During the initial hour nifty was testing the first resistance mentioned and same been broken eventually. Till the first half of the session nifty was trying to break past the second resistance level of 2901 but initially failed and corrected sharply till our first resistance level. In the last hour of trading there comes the surprise factor which resulted in the nifty taking support near our first resistance level and broke the second resistance level with a comfortable margin and closed at the day’s high. The Nifty high, low & close are as follows:

H: 2940         L: 2816           C: 2928

 

US market closed in negative with their indices around 1% down. Asian markets have opened and trading in negative region. Nifty is expected to open flat to negative bias. Even if nifty opens with a gap up, the gain may not be sustained due to profit booking that may emerge.

 

On the upper side nifty may find resistance near 2968 or 3019 levels. Similarly on the lower side support exists near 2849 or 2771 levels. If nifty can manage to break and stay above the first resistance which is the weekly resistance level it may add more momentum to the nifty. Profit booking may emerge at higher levels. Since nifty has entered the overbought level, correction may be expected in any time.

 

Happy Trading !

 

10 Dec'08: Stimulation Rally

On Monday nifty opened very strongly above 2800 backed by the rate cut by RBI and better inflation numbers. During the day nifty defended 2800 level but in the last hour of trade it fell very steeply below 2800 level and also closed below it. The Nifty high, low & close are as follows:

H: 2861          L: 2762           C: 2784

 

US market tumbled after two days rally to closed in negative with their indices around 2-3% down. Asian markets have opened and trading in positive region. Nifty is expected to open flat to mild positive. Intraday volatility and surprises may be anticipated for the day. The way market closed on Monday shows some weakness in the charts.

 

On the upper side nifty may find resistance near 2842 or 2901 levels. Similarly on the lower side support exists near 2744 or 2704 levels. If nifty can manage to break and stay above the first resistance which is very critical level it may add more momentum to the nifty. Profit booking may emerge at higher levels.

 

Happy Trading !

 

05 Dec'08: Speculation Rally

As expected yesterday nifty opened with a mild positive note. During the first half of the day on the way up nifty got resisted around the mentioned resistance level of 2735 but during the second off nifty gave that surprise factor by breaking all the resistance and closed at the day’s high. Nifty is rallying on expectation of economic package or rate cut from RBI this weekend. It is to be noted that the inflation has come down to 8.40% from 8.84%. The Nifty high, low & close are as follows:

H: 2794          L: 2647           C: 2788

 

US market closed in negative with their indices around 2-3% down in the last hour of trading. Asian markets have opened and trading flat to mild positive. Nifty is expected to open flat to mild positive. Intraday volatility and surprises may be anticipated for the day.

 

On the upper side nifty may find resistance near 2839 or 2889 levels. Similarly on the lower side support exists near 2692 or 2597 levels. Today would be the testing day for nifty. If nifty can manage to break and stay above the first resistance which is very critical level it may add more momentum to the nifty. Profit booking may emerge at higher levels.

 

Happy Trading !

03 Dec'08: Surprise

As we had indicated yesterday nifty opened negative with a gap down of about 100 points to take out our first support level at the opening itself.  As we know that when the nifty moves below a critical support level then the same level becomes resistance for it if it is trying to move up. In the same lines during the intraday nifty bounced back and tested our mentioned level of 2624 several times during the first half of the day and could not succeed. But in the second half of the session the surprise factor popped in which broke the mentioned level and taken nifty up to cover the gap created in the opening. Nifty high, low & close are as follows:

H: 2673          L: 2571           C: 2658

 

US market closed in positive with their indices around 3-4% up after a big fall on Monday.  Asian markets also have opened and trading in positive region. Nifty is expected to open flat to mild positive.

 On the upper side nifty may find resistance near 2707 or 2755 levels. Similarly on the lower side support exists near 2595 or 2532 levels. Profit booking may emerge at higher levels.

 

Happy Trading !

06 Nov'08: Counter Rally

As expected nifty positively with a gap up of about 100 points and also as we have indicated profit booking kicked in to utilize the global market induced strong opening. The initial downtrend was arrested around our first support level and nifty traded sideways for a while without breaching our first support level. In the second half of the session nifty breached our first support level which took it further down to close at the day’s low.

The US market closed very weak in view of resurfaced recession worries and most of the indices lost almost 5%. Asian markets also opened and trading very weak. In line with US and Asian markets nifty is expected to open very weak. Even a gap down of 100-150 points cannot be ruled out.

On the upper side nifty may find resistance near 3068 or 3165 levels. Similarly on the lower side support exists near 2898 or 2864 levels. Closing below 2949 may bring more weakness to the nifty. As we were repeatedly mentioned that nifty and other important index stocks have entered the overbought region which resulted in profit booking and this corrective move is expected to continue for at least couple of sessions.

Happy Trading !

05 Nov'08: Overbought

As expected nifty opened weak and traded volatile during the day. Nifty made the day’s low of 2985 which is almost same as the mentioned support level of 2984. Nifty closed with a strong rally during the last hour of the trading in view of US elections.

The US market closed strongly in view of Election Day and following this Asian markets also trading strongly. In line with US and Asian markets nifty is expected to open positive. Intraday volatility may be expected for the day. This ongoing pullback rally may be on for couple of sessions after which nifty has to take some rest by a corrective move.

On the upper side nifty may find resistance near 3201 or 3260 levels. Similarly on the lower side support exists near 3034 or 2926 levels. Closing above 3234 may bring more strength to the nifty. Having nifty and other important index stocks entered the overbought region profit booking can be expected in any time.

Happy Trading !

Nifty State Review for week ended 19 Sep'08

All the global equity markets including ours saw a highly volatile trade. Some of the global equity market went as high as 9 - 10% in a single trading session which could be the craziest we had ever seen. Lot of drama happened in the US market during the week with both negative and positive news at its extremes like Lehman brothers bankruptcy failing, government decision to bail out sick financial institutions and improving liquidity by injecting billion of dollars, etc.

Due to those extreme happenings, US market had a very volatile trading sessions throughout the week and in the same time it has not failed to influence the world market to dance to its tunes. Nifty also traded in a wide range with 3800 on the lower side and 4263 on the higher side for the week. Nifty touched its previous July'08 low at around 3800 and bounced heavily by recovering almost 200 points on the same day itself to close at 4038 on Thursday. On Friday nifty opened with a huge gap up influenced by global market and closed to gain more than 5%.

It is true that in a bear market there would be sharp dead cat bounces, but last week bounce doesn't seems to be dead cat bounce rather a live cat bounce. Such behaviours confuses even a seasoned trader. One day it falls as if the sky is falling and the other day moves up as if sky is the limit.

For week starting 22 Sep'08 we can expect some interesting and important things to happen. This week may be important for the reason that this week's action will give some guidance on the direction of the trend in near future. Either the ongoing momentum can continue to break past the important resistances or it may fall due to possible profit booking at higher levels and breach the establish support last week at around 3800 to a new low.