Monday, September 29, 2008

Nifty downtrending strongly..

Morning Update:- (This space will be updated in the morning based on world mkt cues):
1.Bailout plan :- Rejected by the US Congress....Negative..
2.Asian markets :- Fell sharply but off their lows right now(8.35AM)
3.Sgx Nifty had a low of 3673 and trading at 3705..not much help..
4.As we have been falling since 4293 top made on 19.09.08, we might trade off the lows in the morning but might give away the intra gains as the uncertainty still lingers.
5.Investors can start picking up the stocks of their choice at their desired levels in small quantities as this down move seems to be the last leg down in weekly cycle, though it might have many sub waves before completing a bottom.

Read Colin Twigg's latest for a clear perspective.
********************************************************************************
Nifty trended down strongly as per the technical readings, aided by Asian market & the uncertain US bailout details.
Till we see a strong positive divergences, periodic counter rallies likely to happen.
You can see from the table the likely resistances.



Sunday, September 28, 2008

Nifty's week ahead..

Morning Update:- (This space will be updated in the morning based on world mkt cues):
1.Bailout plan :- Vote on the same likely today. Consensus on $700 Billion.
2.Asian markets :- Down now 2% at 8.35 A.M. Sgx Nifty which was up by 95 points(at 7.00AM) is down by 20 points now(8.35AM).
3.Indo-US Nuclear deal passed thru' US House of representatives.
4.With so many conflicting indications, Nifty's price action will depen on the state of Asian market at 9.55AM (More likely down).



Prices are definitely trending lower. Hourly is near or in the oversold but that alone can't change the trend unless reverses above 4045 and continues to make newer highs and closes the day above 4100 - 4150.

Saturday, September 27, 2008

World Markets..undercurrents..

A Decade of Deleveraging Ahead..a peek into Colin Twigg's Diary over the weekend is quite informative.

Living Without Limits

By Brian Tracy
The starting point of great success and achievement has always been the same: Dream big dreams. There is nothing more important, and nothing that works faster, than to cast off your own limitations and begin fantasizing about what you can become, have, and do.
As a wise man once said, "You must dream big dreams, for only big dreams have the power to move the minds of men." When you begin to dream big dreams, your levels of self-esteem and self-confidence go up immediately. You feel more powerful about yourself and your ability to deal with what happens to you. The reason so many people accomplish so little is because they never allow themselves to lean back and imagine the kind of life that is possible for them.
A principle that you can use to dream big dreams and live without limits is contained in what physicist Elihu Goldratt calls the "Theory of Constraints."
You must always ask yourself, "What is the critical constraint that holds me back or sets the speed on how fast I double my income?"
So what is holding you back? Is it your level of education or skill? Is it your current occupation or job? Is it your current environment or level of health? Is it the situations that you are in today? What is setting the speed for you to achieve your goal?
Remember, whatever you have learned, you can unlearn. Whatever situation you have gotten yourself into, you can probably get yourself out of. If your real goal is to dream big dreams and to live without limits, you can set this as your standard and compare everything you do against it.
The three keys to living without limits have always been the same. They are clarity, competence, and concentration.
Clarity means that you are absolutely clear about who you are, what you want, and where you're going.You write down your goals and you make plans to accomplish them. You set very careful priorities and you do something every day to move yourself toward your goals. And the more progress you make toward accomplishing things that are important to you, the greater self-confidence and self-belief you have, and the more convinced you become that there are no limits on what you can achieve.
Competence means that you begin to become very, very good in the key areas of your chosen field.You apply the 80/20 rule to everything you do, and you focus on becoming outstanding in the 20 percent of tasks that contribute to 80 percent of your results. You dedicate yourself to continuous learning. You never stop growing. You realize that excellence is a moving target. And you commit yourself to doing something every day that enables you to become better and better at doing the most important things in your field.
Concentration is having the self-discipline to force yourself to concentrate single-mindedly on one thing, the most important thing, and stay with it until it's complete.
The two key words for success have always been focus and concentration.
Focus is knowing exactly what you want to be, have, and do.
Concentration is persevering, without diversion or distraction, in a straight line toward accomplishing the things that can make a real difference in your life.
When you allow yourself to begin to dream big dreams, creatively abandon the activities that are taking up too much of your time, and focus your inward energies on alleviating your main constraints, you start to feel an incredible sense of power and confidence. As you focus on doing what you love to do and becoming excellent in those few areas that can make a real difference in your life, you begin to think in terms of possibilities rather than impossibilities, and you move ever closer toward the realization of your full potential.

Friday, September 26, 2008

Nifty trending down ..strongly ..

Nifty gapped down and continued to fall breaking each levels convincingly.All technical indicators are in downtrend which should result in severe falls ahead.Hourly tech.table has provided confidence to stay with this week's fall. Any reversal, whenever happens, will be noticed first in these table first. Till then stay with the trend.Many stocks have fallen decisively below the multiyear upward channel (Log Chart) and index also fell below it firmly this week. Will post more over the weekend.





Thursday, September 25, 2008

Nifty on the verge of completing corrections..

Morning Update:- (This space will be updated in the morning based on world mkt cues):
1.Bailout plan approved but details still being worked out.
2.US, Europe rallied well but US market gave off some gains.
3.Asian markets are flat, not following the US markets.
4.A gap up is possible due to the new series, if so, higher level resistance around 4175-4195 and a possible supports between 4130-4145 may be expected.A close above 4225 is required to bring confidence for an upmove.Staying below 4130, weakness will continue.

* * * * * * * * * *

Though Nifty broke the range on the downside, the damage is limited to the 4070 - 4100 mentioned earlier.Besides unwinding on the settlement day results in some extremes. However, Fridays move should offer some clues.At present, the downmove from Monday to be treated as a corrective to the rise of last week though the end of that correction is not yet seen. May be the overseas cues might help to break out of it(4225).The below channel chart should give a early clue tomorrow..!!







The pattern in the above chart wherein Nifty breaks out of the channel and then slides down in a parallel small channel has given advance indications of a breakout especially when it happens after a prolonged downtrend. A close above 4150 will keep the uptrend alive and a close above 4225 will bring back the momentum and may indicate a breakout.

Wednesday, September 24, 2008

Nifty's Ranging Moves..

Morning Update:- (This space will be updated in the morning based on world mkt cues):
1.US Bail-out debate continues keeping everyone guessing.
2.Asian markets are mixed but with an upward bias as of now at 8.15 A.M.
3.End of the settlement to have uncertainity based on the OI positions.
4.Nifty likely to trade between 4200-4225 to 4130. Trade the ranges.If breaks out of either range, trade in that direction.

* * * * * * * * * *
Nifty has established a small trading range of 4118 to 4225/4293.And it managed to stay above the 5-day ema in the last hour. Till the US bail-out plan is not over, the uncertainity will continue to cause ranging movements. Make use of them.

Hourly:- Oversold Hourly RSI gave some initial push up to the index and its travelling upwards. Tomorrows first two hours of trade will give a clue to the directional change, if any, in the hourly macd which is in downtrend below its trigger just above the positive area.




DAILY:- Daily macd is still in the negative zone & below its trigger and trying to move up. A decisive move is likely in the next 2-3 days.Daily stochastics have reached the overbought area.




If Nifty can stabilise above 4210-4225 lavels and manage to close above 4300 on Friday, bull move is possible.Till then Use the "Nifty Intra Chart" Link in this blog and sell at every overbought and buy into every oversold situations.

Tuesday, September 23, 2008

Nifty's correction continues..

Morning Update:- (This space will be updated in the morning based on world mkt cues):
1. US Senate commitee clears Indo-US Nuclear deal to Senate to Vote....A positive sentiment.
2. Though US Mkts are down, Asia has recovered from their lows...A flat to +ve Cue.
3. As we finished at the bottom yesterday right at the GAP Level, Chances of Gap up is possible. Even if it opens flat, Nifty is expected to move up in the start session.There is still some short covering left in the market.
4.I like to add an alternative scenario that we might still be in the 4th wave up and follow it up with a 5th dn and during this 4th wave you are likely to see extreme moves.
* * * * * * * * * *
Nifty's correction continued into the Gap area. If this correction does not end at the 4070 to 4100 area, more falls may be likely. Trade carefully in the next 2 days of sttlement.Presently we are trending down in the most short term.

Weekly:- Nifty faced resistance at the 5.Week ema (4293) on Monday and hence its trend is still down.Though oscillators are giving advance indications of an upmove, we require a minimum close above 4300 for an uptrend.

Daily:- Nifty closed below 5 ema, macd turned down, stochastics have reached the overbought area, 14 Rsi heading lower. All indicates underlying weakness and uncertainity.

Hourly:- The corrections that started on Monday continues(Refer the Tech.Table below) without any interruptions and the quantum of fall and the subsequent rally/ bounce tomorrow will indicate the resumption of the uptrend or further fall below 4000 again.Though volume has been low on the last two days, tomorrow's price action is important. Nifty did not show any indication of re-entry pointers today also.As the hourly nears the oversold levels, our settlement considerations and US market action will affect our markets.





The Be All, End All
In order to be an effective investor, you have to do what quantum physicists do, consider the market as both random and efficient. There will never be a perfectly efficient market as long as there are investors buying into it. This doesn't, however, mean that the market is so random that no effort on your part can help you profit. You should never remove uncertainty - and, by extension, risk - from your thinking, but you should act as if forces that are generally efficient rule the market. After that, leave the debate up to the economists who are paid to keep it going because sometimes being a ladybug in a giant forest is enough to worry about on its own.(Courtesy: Sunil Saranjame -The Indian Market Monitor)

Monday, September 22, 2008

Nifty pauses.,Correcting the Short term..

As discussed earlier, The hourly "Overbought status" is getting corrected after opening today at the 5.week ema(4292).There are few supports from here..4200(Prev. Major support), 4186(3.day ema), 4172(5.day ema),4145 (5.day avg) and the 4133-4117(The Gap Area).
Retracement for the rise from 3800 to 4293 = 493 points are
23.6 % = 4176 ; 38.0 % = 4105 ; 50.0 % = 4047.
As daily continues to be in uptrend, I will prefer the 23.6 % or a little lower levels for the time being for the re-entry point and also will monitor the hourly movements for re-entry points.


NIFTY-Technical Turn up.

Weekly 14.Rsi has broken out of a falling channel at the bottom area.
12 week Roc has moved into positive area.(Inference:- Fall from 6357 to 3800 is over and an uptrend has commenced - This is NOT a BOUNCE) Weekly 5 High ema for the current week expected at 4425 and the 5 week Low ema at 4100.

Daily Macd has turned up and the stochastics too turned up.(So buy into DIPS)

Hourly oscillators such as stochastics and Rsi have reached the overbought area.(WAIT) Allow for some profit booking to take place and then resume the buying. In stocks, you may still find some attractive buys.


Saturday, September 20, 2008

Nifty's Major "B" up foxed all..!!

The Major "B" up which I have labeled since that July low at 3790 may still be playing out and the "b" down of this "B" up foxed me too.This is precisely what was mentioned at that point that it will make you change your views so frequently.In such a scenario, we have started the "c" up of this "B" up.Even a technical analyst will tell you that what the market just did was a classic text book Double bottom at 3800 and has laid the foundation for the next leg up.The direction is up, no doubt in that.(Remind you here,the July rally from 3790 to 4534 marched up without much correction)So let us remember the same. So Go ahead, make your shopping and hold your holdings ...(Volumes were quite heavy in the last two days of reversal)

Alternate view:-Major "A" Down(ABC-X-ABC) ended on Thursday at 3799 with the " C" failure and we may have just started the major "B" up which can do a retracement of 50% to 61.8% the entire fall from 6357 to 3800.

Robert Beckman in his book "Elliot wave Explained" says..."The most difficult part in following Elliot waves is that in most of the time it is hard to believe in what you see in the waves as it is happening. In hindsight, you can label them accurately but a lot of conviction is required to stick to what you see & believe in"..and I couldn't believe in it inspite of seeing it..



There are some stock ideas in Stock wealth, if you are interested in some stocks.

Friday, September 19, 2008

Wild Moves ahead & A Double Bottom..!!

I have counted the waves from 4638 as follows:
C.1 = 4638 to 4251
C.2 = 4251-4398-4204-4538
C.3 = 4538 -3799
c.4 = 3799 - is on...

Hence, C.4 should be limited below the C.1 bottom at 4251.Breaching 4251 will call for a change in the wave labeling:-
A.Bearish scenario..Option-I will come into play.

B.Bullish Scenario: "ABC-X-ABC" fall completed & Major "B" up opening up.(Though 4538 needs to be taken out, a reversal can be considered on a move above 4325)

Markets have rallied powerfully in downtrends this way earlier too and continued to fall subsequently to complete their downtrends.The inference here is that do not rush in to create "Shorts" immediately but to play out this up move due to its highly oversold status and wait for some weakness to come in the short term oscillators (may be by Monday or Tuesday)as we should remember here that we have been falling since Jan.2008 and are in the last leg of this downmove and the markets have made a double bottom at 3800. Let us respect that.

Thursday, September 18, 2008

Nifty completes a five from the 4538 TOP..

Daily price pattern is still in downtrend. However, the oversold short term reflected by the positive divergence has provided this powerful rally. Resistance to this rally will be 4095, 4130 , 4150 (At its idealistic, theoretical best to 4200/ 4225).So expect good amount of volatality from tomorrow with some wild see-saw movements. Do not get carried away by the wild upmoves and remember to write some calls above the 4100 levels(4000 Call-write) and buy some puts (4100 puts - buy).

Mr.Praveen has made some well researched comments in my earlier posts. Read them for your benefit & for its valuable guidance. Be patient with this market to get your desired levels to initiate your trades and haste not in a rush of excitement so as to not to miss all the sizeable opportunities. Write out your own plan of actions and execute them at leisure.


High volatality ahead..





Create Wealth

If you have positive thoughts, more positive things will be drawn to you. You need to change how you think and act to attract all the riches that you want. Not so much by what happens to you as by the way your mind looks at what happens.
A possible road map for this "C" down.( The other alternative is that we might end this C.3 by today or tomorrow and go onto a C.4 for till settlement and followed by C.5 for the 1st week of Oct). We will update & review this chart daily.Any suggestions and contributions is most welcome.
OPTION-I:-

OPTION-II:-

Wednesday, September 17, 2008

NIFTY'S sideways trend to end..

Nifty seems to have done a sideways pause for the last three days and poised for a further fall below 3920. Only a trade above 4040 in the opening hours may provide a rally to 4100 or above. Break of 3960-3950 will lead to a new low..



Technical data table do not indicate any reversal in the daily as yet.There are two possibilities :-

1)Make a new low now and trade sideways for 3 days and then fall for the settlement.

2)Rally now towards 4150 area and then start to fall towards settlement day.

A NIFTY Trade for the settlement.

Here is a trading (Positional) call given by my Critic for this Sept. Settlement:

SELL NIFTY Sept. 4000 Call around 200 to 250 rs upwards in the next two days time.

No anxiety of trading the Naked Nifty futures in this trade.You are actually selling Nifty at 4200 - 4250 when you sell 4000 call at Rs.200 - 250 or more.

He, my critic & friend, expects the Nifty to close below 4000 for the settlement.

Take your own decision after evaluating the merit & demerits of this call.

My addition:- If you are lucky to get this "sell at Rs.200 -250" today, book some profit when it falls to 4000 - 4050 area, and resell the same again and hold till the settlement.

Tuesday, September 16, 2008

Nifty pauses at 3920 for a rally

Having fallen more than 600 points from 4538 to 3920, Nifty shows some intra recovery in the last two days. A sideways trend or a pullback towards 4200(Break down point)or 4325 (4th wave of this down) may happen in the next one or two days with supports at 4000 and resistance at 4200/ 4300. To meet with resistance at 4200 to 4300 area. Short Term direction is likely to TURN UP today with the break of the down channel.A retracement for the fall from 4538 to 3920 works out to 4150 (38%); 4225 (50%) and 4300 (61.8%).





Nifty's Internal waves

I'm posting a chart of Nifty's hourly movements from 4638 top and it's possible internal wave counts:
4638 - 4204 = C1 = 434 points
4204 - 4538 = C2 = 334 points
4538 - 3911 = C.3.1 = 627 points(whether it is C.3 or part of C.3,we'll know soon)
3911 - .....= C.3.2 = 23.6% will target 4059; 38% target 4149; 50% target 4225.

As the hourly & daily are getting oversold & far away from averages, a sideways move between 3900 to 4100/4200 may be expected.

Any change in the labelling will be done promptly.However, direction is most important.

NIFTY's Likely Targets

Breaking the 4200, confirmed a channel break and the next downtrend which is labelled as "C" wave which has already completed the 1st down(4204) & 2nd up at(4538) and its on its 3rd down which is quite ferocious having likely targets of 3830 & 3662 or even more..If we take the "A" wave to equal the "C" down, then the likely targets could be 3173.

While trading this major "C" wave down, follow the technical table which shows the internal strength & weakness of the Nifty (Week, Day & Hour) placing more weightage to the week followed by daily indicators.

Though "B" Major wave up was in contention till Thursday, the break of 4204 on Friday confirmed this "C" down, necessitating the change in the labeling.

Monday, September 15, 2008

AN INTELLIGENT GAMBLER?

Most people gamble at some point in their lives. For most it provides entertainment, for some it becomes an addiction, while a few become pros and make a living at it. Gambling provides a living for a very small minority and entertainment for the masses, but a casual gambler reaching for a quick buck has the same chance of success as an ice cube on a hot stove.
Some famous investors like betting on horses. They include Peter Lynch, of Magellan Fund fame, and Warren Buffett, who used to publish a newsletter on handicapping. Some card games,such as baccarat, are based on chance alone, whereas others, such as blackjack, involve a degree of skill that attracts intelligent people. Professionals treat gambling as a job. They keep calculating odds and act only when mathematics point in their favor. Losers, on the other hand, itch for the action and enter one game after another,switching between half-baked systems.
When you gamble for entertainment, follow a set of money management rules. The first rule is to limit how much you’ll risk in any given session. On a rare occasion when a friend pulls me into a casino,I put what I am willing to lose that night into my right pocket, and stuff my winnings, if any, into the left one. I stop playing as soon as my right pocket is empty, without ever reaching into the left. Once in a
while I find more money in the left pocket than I had in my right, but I certainly do not count on it.
A friend who is a successful businessman enjoys the glitter of Las Vegas. Several times a year he takes $5,000 in cash and flies there for a weekend. When his bankroll runs out, he goes for a swim in the pool,enjoys a good dinner, and flies back home. He can afford to spend $5,000 on entertainment and never blows more than his initial stake.Lounging at a pool after his cash is gone, he differs from legions of compulsive gamblers who keep charging more chips on their credit cards, waiting for their “luck” to turn. A gambler with no money management is guaranteed to bust out.(Excerpts from "Come into my Trading room"..by Dr.Alexander Elder.)

Nifty's intra bounce

Nifty bounced off an intra day low of 3955 and the oversold Hourly indicates a minor reversal.



NIFTY Down Channel

Friday confirmed the down channel, though last Thursday has given an advance indication. Any move upto 4100 to 4150 is a good sell area. 4638 to 4200 = 438 pts. So the next fall that has started from 4538 can target 3830(1.6182 times 438 pts) or 3662 (2 times 438 pts).After this 3rd down, a rally as 4th wave up & then the last 5th wave down ( The target for the same will be calculated based on the 3rd wave completion)

Sunday, September 14, 2008

NIFTY- Trading Range

The More I study the stocks, I am of the view that we are still in the "B" up, targeting the 200 DMA at 4950 (With in which we are trading the "b" of the "B" wave; Only falling beyond a 61.8% retracement of 3790 - 4638 i.e below 4113, should I change my views). Let me, then, wait for few more days to change my views.

Nifty is falling down from 4538 and its internal waves suggests a fall upto 4130 to 4160 in the next one to two days time periods during which it will have resistances in three stages of 4250-4260; 4280-4260; 4300 to 4325.As and when the projected five waves are complete(If its a "ABC" down from 4538, you may not see a 4th & 5th), the daily & hourly will bottom out and a bounce/ rally will materialise. I have been stating often on the importance of channel trading when things are unclear at times and I still feel its importance is not realised by many short term traders who are not able to adjust to the fast changing markets because their time frame is all confused.



Hourly internals likely to become oversold in 5 to 10 hours during which time the market will find a temperory bottom and rally from there. The quality of the rally (Pricewise faster compared to the internals or vice versa)will determine the future direction and its duration.





NOTHING FAILS LIKE SUCCESS:
You are most vulnerable when you are successful. Success actually breeds complacency, inefficiency and worst of all - arrogance. When people get really successful, they fall in love with themselves. They stop innovating, working hard, taking risks and begin to rest on their laurels. They go on the defensive, spending their energy protecting their success rather than staying true to the very things that got them that success. When you are making money, you tend to get sloppy. The more successful you become, the more humble and devoted to your work you need to be. the more committed to efficiency and relentless improvement you need to be. The more value you need to add. Because the moment you stop doing the very things that got you to the top of the mountain is the very moment you begin the slide down to the valley. (The greatness guide by Robin Sharma)

Friday, September 12, 2008

Nifty-into "SELL" Mode..

As per the technical parameters, Nifty has logged into downtrend since Wednesday.The table below amply confirms the weakening Nifty this week.However, Nifty can stage a bounce back either from 4200 or 4160 levels as a correcttion for the 5-wave fall from 4538 to 4200(Or lower on Monday morning),A retracement of 38% to 50 % is a possibility.



14 Day Rsi has broken below the 50 Mark signaling a 3rd wave in progress.



Nifty has broken the daily supporting channel.A gap down will give the final confirmation. A sideways trend will keep the other options alive.



The positive divergence of Thursday led to a small intraday rally but the weekend blues kept the Nifty pressed down to the lowest level, developing further positive divergences. As the larger trend is down(Weekly), the divergences deceptively keep many a hopes alive only to fall continuously.As we have fallen 338 points(4538 to 4200or lower as per Monday morning lows)as the 1st of the 3rd wave, we might start a corrective rally up towards 4300 to 4365 levels. Alternatively, we can also do a totally sideways or a downwards running corrections. Be prepared..



Thursday, September 11, 2008

Nifty at its last base line.

Most of the stocks are trading within a range as Nifty has been doing in a "4200 to 4650" range.As the index & stocks near their upper range, excitement takes over and as they fall towards the lower range, a sense of gloom descends.Unlike other markets, our market has withstood the overseas bad news till date. So Buying near the 4250-4200 area with a stop below 4200 is the normal act till Nifty breaks 4200. Though technically a sell has triggered, I would hold my shorts confidently only on a fall/ close below 4200.



There are minor positive divergences in 5-minute charts.Let us monitor the quality of the bounce and if resisted at 4400 levels & inability close above 4400 in the next two days and a subsequent fall below 4200 will confirm the downtrend.





Will the 5.week Low ema (4250) hold the falling Nifty tomorrow..?

Elliot's Impulse waves.(Part-5)

IMPULSE WAVES :- The Basics Waves that move the market in the direction of its main trend either up or down are called Impulse waves. 1....