Nov 182011

Nifty(4934.75): Once the important support at 4985 gave way, markets got rattled and a quick swoon followed. It was a combination of stop triggering and put writers of 5000 strike stepping in to cover their positions. What we had labelled as blue wave V turns out to be an extended blue wave iii. And only now the blue wave v of the red 3 seems to be in progress.

The supports for the markets are likely to be found around 4860 and 4830 the former gap left post the October 4th low. One fibonacci relationship ratio between blue wave iii and blue wave v also exists around this level. On the hourly charts, there is a fair amount of positive divergence developing and this is normally a precursor to a relief rally. Needless to say we will look to sell into it and the former target area of 5150 ballpark still holds good. But that is a few sessions away. If you are trying to create short positions, keep your position size small.

Open positions:

Long USDINR from Oct 21st revised stop 50.05 (November fut) -(partially booked day before yesterday)

Short Onmobile Global tgt 52 and beyond stop 62 at close

Silver Stop $35.7, revised stop $34.2

Silver had a big drop last night and this morning went below $31 in the asian session (currently at 31.5)

 Posted by at 2:56 am

  23 Responses to “Technicals 18th November”

  1. can we go long around 4860-4870 with a stop loss of 4825 on nifty.

  2. Jai,

    Massive left out feeling. We had good broad direction from you but some how couldn’t convert into strong actionable trades.


  3. hi jai,
    is there a possibility of nifty just giving away (down), without a significant bounce back?

    • Good question, yes that is always possible. Unfortunately there is no crystal ball. But the tendency of the market is to do something other than what it did in the previous correction. Previous correction was a simple pullback to 5325, i guess this time it might do a triangle or something complex. So the chances of it going down straight to new low seems very less

  4. Jai,
    any views on wipro, it has not gone down much is it a good idea to short it again

  5. Any target for Silver?

  6. jai
    onmobile is above my sell price of 56.65 dec futures should i book loss or hold on to it

  7. Jai,
    Do you think it would be a good idea to create fresh shorts on silver here or wait for a pull back?

  8. jai
    i was able to buy nov 4800 call @ 134 and 4900 put @ 59 is it okay?

  9. Jai,

    Again, good call on the Nifty and the general direction of the market. Thanks.

    Maybe I am trying to analyse your words – But would you think its IDEAL to short Silver now that its at 32.20 ? Or would you suggest to remain patient and short at a furtehr rise ?

    Thanks and have a nice weekend


    • It looks like Silver will not cross 33.15. So anything closer to 32.5 seems like a low risk bet. You too have a good weekend.


  10. Jai – I dont know if you track option data on NIFTY. But I see a huge jump (1.7M) of calls on 4800 that is simply suggesting to me that we will close below 4800 on Thursday as the call writers benefits the most in that scenario. Also the massive OI on calls above 4900 levels confirms my view that Option writers would want the market to close below 4800. What is your take.


  11. Jai,

    At the outset let me say that your daily analysis, with charts, is something to look forward to every morning. The good part is that you analyse keeping in mind different outcomes. This also makes us think for ourselves. Unfortunately (for you that is) we then come up with questions which may seem frivolous to you, but then you are the one making us think, so you can’t complain…:-)

    Here go my questions:
    1. If Blue wave v of Red 3 is in progress now, would you say that 4830 signalled the culmination of Blue v? 2. Then what next?
    3. If Blue v of Red 3 and positive divergence suggest a relief rally (to say 5070-5115-5150, maybe?) what time frame are we looking at? (keeping in mind that the date Dec 8th coming up – one of your earlier posts).
    4. What other factors are you also considering?

    Looking forward to the next 4 days of trading (and then many more, of course). 🙂


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