Nov 222011
 

Nifty(4778.35): Given the ferocity of the decline from 5325, let us re-visit the big picture of Nifty and see where we are in the larger trend.

Nifty - Daily Charts with wave count

The speed of the decline is definitely of that of a third wave, which we have been marking as one on the daily updates. The possibility that we might still be in the 3rd wave in the bigger picture too is now a possibility. The implication of that is that there might one more leg of decline like the decline from April to August, after this downward leg is complete. This would work well with our call for INR 57+ to the dollar. It is also possible that green circled area shown on chart is a wave 4 of C of green Y. Either case, Nifty should drop closer to 4400. If Nifty breaks 4720 without a pause, the odds that we are still in the third wave (purple 3) would gain more weight. We will update on the bigger picture as things evolve.

Short term: Given that Nifty has been relentlessly dropping from 5325 to 4764, it is very doubtful it may have the energy to break the big support of 4720. A bounce to 5000+ would be the bare minimum but as we have been seeing extended waves are very difficult to pin down. In case, 4720 is broken supports to watch are at 4650 and 4530.

Open positions:

USDINR long from Oct 21st - Take profits here today (52.3 was November Fut close) - RBI will come under intense pressure to intervene. We will get in on a pullback for the next target of 57+

Silver - holding with upgraded stop of $34.2. Take Partial profits @$31.4

Nifty Long Guts: November with a debit spread of 184-188.

 Posted by at 12:48 am

  10 Responses to “Technicals 22nd Nov 2011”

  1. Hi Jai,

    Good morning.

    Any views on Reliance and Wipro ?

    Regards

    • waiting for Reliance to bounce so that we can whack. If it comes to 830-50 will say a big thank u and whack. Wipro small trading play to 390-410 potential

  2. Hi,

    Pls explain the last line on Nifty.. Was is Long Puts that you meant ..?

    Regards

    • See the SMS of Friday. Long Nov 4800 call and simultaneously long 4900 put. That is called a Long Guts strategy.

  3. DOW is going to gap up tomorrow morning and I expect at least a 200+ point rally in DOW. Dollar index may fall below 77.5 for a small Wave 4 rally I presume.

  4. Jai Bala,

    Can you share your views on Page Industries? Can a stock with average daily volume of 3000 can sustain the raise from Rs.250 ?

    -Kishan

    • I think the stock has already peaked. A close below 2340 would confirm this. At least a top for the short term if not the long term

  5. hi jai,
    i got caught on the wrong foot i had not closed short on onmobile as i thought it will not run up in down market, today it is up by 10% i have shorted on more lot @ 65.50 is it worth averaging, or should i call it a day? is there any news on which it is shooting up
    regards

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