Nov 022011
 

Nifty(5257.95): Nifty has so far partially filled the gap that was above 5169 and from the early morning SGX Nifty quote does look like there is going to be a further push down. Next significant supports for the short-term supports are at 5190-95 and 5150-40. IF there is a gap down beyond 1% on the Nifty it would be prudent not to short. The best place to buy or sell is always at the first reaction to a move. We have seen Nifty drop from 5400 to low 5200's, now we will wait for the reaction come and through and see to it that the dip buyers have spent their energy.

The most important take away from yesterday's move was from Reliance.

Reliance - Daily Charts

It was indicated in yesterday's note that Reliance was showing early signs of weakness and here is the confirmation from Mr Market. If the rise from August low was the start of a fresh uptrend Reliance should not have overlapped into 858 but it did and hence the rise is corrective. If your know a bit of Elliot wave you know why but what is important is the implication. Also, notice the October low for Reliance was way above the August low and this strength was the reason why we did not see a breach of 4720 on Nifty. I expect Reliance to trade around 842-848 at open and provide a relief rally. It is this rally we would interested in selling into. Like Reliance's overlap we should also see Nifty overlap into 5215 to eliminate the bullish case (though 5170 would more ideal). Be patient and let the opportunity fall on our lap.

 Posted by at 2:17 am

  3 Responses to “India pre-market 2nd November”

  1. Bala you have become defensive in your approach you should play with free mind

  2. Hi Jai

    What is your view on HUL. The stock has shown a large rise and a very quick one at that.

    Regds
    prateek sinha

    • If you recall the first note I sent before the members area was up, I was bullish on HUL.I know some of you pulled that trade but I Missed converting it as a call at 335 officially.Sincere apologies to all on that. The high of 393 is just 1 rupee over a perfect 5th wave relationship. I think it will not exceed that level for a few weeks. If you are long it may be time take money off the table, partially atleast. If the high of 393 is exceeded it may proceed to 423-455.

      Best regards,
      Jai

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