Oct 132011

The bearish signals that came through on Wednesday were rendered void yesterday by the strong up-move yesterday. This is exactly why we never pre-empt the market. It has always paid well to wait for the breach for the previous days low (or the previous days high in a bullish case). If you did notice, Wipro was relatively weak in yesterday’s strong price action for the IT stocks.

The focus now shifts to the critical 5170 on the Nifty. As long the market stays below that level, the next leg being a sharp to the downside remains.  Watch out for the USDINR cross rates. The level of 48.3 is an important and a reversal around that could mark an important turning point.

Whenever I have doubts whether we are in a bull market or bear market, I always revert to my prop indicator of the indian economy. It still says we have not reversed and quite a distance from it. (See Nov post on the reliability of this indicator)

India barometer

We still see short-term positives in HUL, Bharti and Syndicate – if market provides the right environment we will try position ourselves long here for some quick gains.

 Posted by at 2:42 am

  9 Responses to “India short term technicals”

  1. Thanks.

    Jai, I think this is a good start. Money protected is money earned.


  2. Hi Jai

    When you say a reversal around 48.3 in usdinr, do you mean that usdinr would go towards 50-52 levels or do you mean we will see it falling to 46.3-47 kind of levels

    • Dear prateek,
      Yes the Rupee is likely to weaken begin its next leg. As always, Wait for a reversal signals and then act. Yes weaken meaning head towards 50-52.


  4. Dear Jai

    What do you think of the double bottom formed by nifty 4720,can we expect some rally if crosses 5170.

    • Dear Prateek,

      Unless the previous peak is crossed, it is only a potential. Potential can fail. We need confirmed patterns

      Hope that answered your query.


  5. Jai,

    A few points of clarifications, if you please:
    When you say “if market provides the right environment” does not mean that we should have been long in these scrips yesterday, right? It means that we should be monitoring these scrips and also the nifty and then decide, right? Preferably, we should wait for you to give a call of buy or sell with specific stop losses and targets, right? Or. not…

    Also wouldn’t it be true that since the market has remained below the crucial 5170/5195 level, long positions carry a larger risk than short positions, especially as a sharp downside leg is a strong possibility.

    Since some of us here are new to this, I thought a discussion would clarify trading strategies, etc.


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