Oct 252011

Nifty(5098.35): The Asian region was strong, European and US futures higher and yet the Nifty faltered once again under the 5145-5177 zone. As mentioned yesterday, with a weak Rupee and 3 top heavyweights on Nifty under pressure, clearing above critical resistance was never an easy task. As should be expected, the momentum behind this move is also weak.ย Having said that, the thrust downwards at this moment is also lacking fire power. As can be seen from the chart below its a narrow triangulation between the bullish and bearish forces.

Nifty - Hourly charts

A move beyond these borders is needed for a decisive move.

Nifty short term:– While the range is 5160-5010, a break below 5040 would be an early indication that 5010 is about to go.

A couple of interesting points from the Global markets.

S&P Daily Charts

Yesterday’s high on the S&P and the Dow Industrials are exactly at the 61.8% fibonacci retracement of the entire decline from May. The french CAC too has paused at 38.2% fibonacci retracement of its fall from the summer highs and the DAX a few points above the 38.2% fibonacci retracement. Dr. Copper is just a few cents away from a perfect A = C wave relationship. While these levels are not fatalistic and markets need not halt here but it is interesting that we have such decision point levels right at the time when markets are at cross roads. A strong sell off for the US and European and US futures during the Asian session would be quite meaningful and would possibly signal a reversal is at hand.

Strategies yet to achieve their price objectives:

Strategy Security Price Entry Price Objective Stop loss Remarks
Larsen Short 1397 1235,1105 1450; moved to 1400 Partial profit booked at 1331
Long Ambuja Cem 154 170, 188 142 at a daily closing level
Short Wipro 347 305, 290 365 at a daily closing level
TCS Write 1150 Nov Call Around 10-11 0
 Posted by at 2:39 am

  18 Responses to “India pre-market Oct 25th”

  1. Perfect analysis. elliotwave.com has been recommending its subscribers to start buying 2X / 3X short DOW ETF’s with a SL @ 12000 Closing on DOW since Friday. Exact same analysis they published on DOW / S&P today where the uncanny part is the exact percentage retracement from Oct 4 low. Awesome!!!!

  2. pls mention its cash or Future ,also

  3. Dear Jai

    RBI has hiked the interest rate again by 25bps and at the same time has said that it wont be hiking the interest rates in the near future. How do you think it will affect the markets.

    Also with European bailout decision/plan supposed to come out today, do you think markets will just hold out and take a direction tomorrow.

    prateek sinha

    • That is what it seems like. Atleast so far. Very likely it will be a pop and drop after the European announcement.

  4. Jai,

    Any thoughts on the banking stocks like SBI. Some huge decisions taken in the monetary policy today.


  5. jai,
    when i am short in LT in futures, one lot how do i book partial profit at 1331.00?

    • Square the position in futures and day trade half the position in cash Or just tighten the stop and hold.

  6. Sir

    Wipro close to our stop loss level. Should we carry it over. Also do we consider the prices which we see on muhurat trading while deciding our stop loss levels.

    For eg if wipro gives a closing above 365 tomorrow, do we square it off or take it forward and wait for the stop loss to be triggered on basis of the friday closing.

  7. Wow…that rally hurt !

    • Yep ๐Ÿ™ But this too will pass

      • Could not exit out of WIPRO as was sleeping (2:00 AM here on West Coast, USA). US markets are going down as expected from the peak, so probably will hold WIPRO through muhurat (usually stocks rise on muhurat day). Let’s see what happens on Friday!

  8. Hi Jai
    Sbi, Axis bank found no short covering in the end though Nifty went up at close. It looks like heavy shorts carried to Nov.
    Do you feel these 2 stocks can fall substantially more in Nov

  9. Asian higher by 2-3%.Looks like Larsen will stop out on Friday ๐Ÿ™

    Jai, has the tide turned in favour of Bulls?.We have traded above 5177 and looks like we will do that on Friday too.

    What do you think about India Cements and Escorts?


  10. Massive rally building on DOW today morning. Will take DOW up 300+ points intraday. Short traders will be squeezed causing short covering as well.

  11. DOW is up 335 points, still 2 hours to close. NIFTY will zoom by at least 200 points tomorrow. Man .. and that will cause a short squeeze. Hoping to make money on Ambuja call and some other faltering longs (though not sure if I should stop out of shorts – more shorts than long right now .. bad for me)…

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