Nifty(5265.75): Nifty defended the 5200 level and bounced off the lows of the day. The key takeaway from yesterday's price action was that the decline has been in a five legged fashion.
Nifty - Hourly Charts
When a market declines in five legs (see chart above), it is normally part of a larger decline. The ideal levels to watch for a turn after this short term push would be around 5324 and 5350. Volumetric analysis also tells us that 5320 and 5340 could offer fair amount of resistance. The 5350 level seems more ideal to me. The ratios drawn from this level coincide well with important supports of 5160 and 5030 (that way the markets could posture an image of support being held when it drops).
The anniversary of last year's peak falls on Saturday, the odds of market running into some serious resistance today or on Monday is a good possibility. (Just one example if you are curious why this is important: the Satyam scandal hit the markets in 2009, exactly on the anniversary of 2008 peak). May be the G20 meet and the ECB rate cuts could provide the short-term euphoria. Stay nimble.
9 Responses to “India pre-market Nov 4th 2011”
Sorry, the comment form is closed at this time.
Dear Jai
Just one concern… have we not gone too bearish on the markets.
Fair question Prateek. Our view is bearish but we have not taken such a bearish action on markets. Also this is the reason why I keep presenting the bullish options and say why this is not the case. I remember, in Apr-May, markets did the same thing only to finally fall back to trend. We should definitely know one way or the other by maximum Mon/Tues.
Best regards,
Jai
Jai,
It’s tough one…..Personally I have been stopped out on a few times now. 🙁 However, I have signed up to listen and hear your TRUE and CONVICTION views. Even if those go wrong, thats fine.
So…In a way, I am ok that you are still maintaining your views. How I manage my portfolio’s (or not) is my look out.
Dear Mr.Bala,
The intellectual conviction & honesty displayed is outstanding and that will save us all from becoming delusional. Thank You.
Warm regards, J.
Dear Jai,
This market is really confusing i must admit i am totally confused… although market is at 5400 almost but broder market stocks are still down 60-70% from highs and not recovering along with index’s…. fundamentally things are becoming worst in india instead of improving….. but markets are not going down ?
Could this be actually bottoming of the market slowely without going new lows …. since u have been in market very long …. has such kind of scenario either occured earlier ? if yes then what was the outcome …
Regards,
Vipan
Jai,
Your thoughts on DLF, good time to sell at 248. Also IDBI at 116.
Dear Vivek
DLF weakness below 232. It may have some more upside left but momentum has started to drop.
IDBI too is similarly placed. So may be 5-6% upside here.
Thanks Jai.
Jai,
I may be wrong and different people will read thngs differently, but if you don’t mind and for what it is worth, I would like to share an insight or two from my experience. Please do clarify/correct me as you think fit.
Dear All,
When the markets are going to make new highs, they always go the reverse direction i.e. sharply down, and stop out the weaker bulls. Once the smaller/weaker bulls get tired/lose money/give up is when the markets give sharp rises.
Similarly when the markets are to go down, they always tend to go in the reverse direction i.e. up, before resuming the downtrend. In such cases the market is testing the smaller/weaker bears and making them lose money/time/patience. When these bears get tired and/or lose enough money and give up is when the markets will give a sharp down.
In both cases, most people don’t get to make much money. They will make some but not as much.
I am sure if the trend changes, the market will give a definitive sign and who better to read it than Jai. He will surely inform us. Not to worry.
Till then our best bet would be to be patient, trade with stoplosses and don’t lose hope or give up. Also don’t over trade that you lose so much that you are not able to come back again.
Happy trading. Let’s all make some smart money.