Nifty(4613): The decline from Friday continued and Nifty pushed closer to our projected support of 4530. There was some erratic moves later in the day and markets saw a mild recovery and finished the day paring some of the losses.
Nifty intra charts
From the chart, we have not seen any divergence to indicate that the move is ending but we have to be a little flexible here about taking our profits, a little early. First, the momentum on the daily charts is yet to dip below the level registered when markets hit 4640 in November. Second, there is a hammer pattern on daily charts - this can fail and needs follow up buying to confirm. Third, in the smaller degree we are assuming we are in the fifth wave which is often known for failure to reach ideal levels. So let us keep these in mind.
In the bigger picture though, recovery if any, is likely to be temporary and the broad trend is still strongly lower.
Open Positions:
1)Long Nifty 4500 Dec put @20-21
2) Short Induindbank from 267 (covered and reloaded at 254)
3) Short heromotors from 2025 (covered at 1938, reloaded at 1910)
4) Silver short from $34.2 (booked part at $31.4 and reloaded at $30.65) - Please book profits today at $28.8. When silver breaks $28.1 short again
24 Responses to “Technicals 20th Dec 2011”
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Can we expect some sort of a bounce in the nifty before the expiry next week?
Jai
Any views on Jp Associates… The share is currently testing its lows. It can be a low risk trade if we play long..
It was an intraday trade for 54. If it breaks 52 it will go to 38 or 12 :D. We will sell this one on rise
Hi Jai,
Any views on ONGC and Sail.
Sail over the medium will make a low below 2008-9 low. Sell on rallies. ONGC chart is a bit unclear(I had thought it wud dip to 175 fast) but 220 will defintely come through.
Jai I missed the heromoto short the second time u asked us to go short… It has fallen badly since. Any levels from which i can get in if heromoto corp gives a bounce…
Or any other short opportunity which might be there in the market….Maybe IT or Cement sector…
ur sectors are perfect but those are the candidates on the next bounce back. Ambuja medium term target 110. Below 2200 Grasim’s run will be over.
Boss, I share that on the free area too!! Anyway, market will always through up something. Just wait
Sorry got a little impatient because of missing out on Hero Honda trade.
I do not know how much it will bounce or if it will bounce at all. Try buying a put. Difficult call now decide if u shud go for Jan or Dec. You do not want to pay too much premium by buying Jan OR buy Dec and loose bcos of time decay.
Jai,
We have hada great run for the last few days. Thanks to you.
I was wondering if you have any “toss up” kind of calls ? Last time that you tossed up was on ICICI Bank…..and look what happened ? 😉
Thanks for ur help mate.
Regards
😀
Sir
Your views on Tata Power now that it has broken 84 on an intraday basis…
My assumption that it was a long term 123 is now proved wrong. It was an ABC since there is an overlap. tatapower is now headed for 62.
Jai Bala,
I was bit confused. Around August 2010 I invested in GMR Infra at Rs.56. I was looking for a third wave rally. After certain time it was not behaving as It was in Third Wave so I did exit that stock taking bit of loss. If you see the ‘USD Vs INR’ Chart (When it was around 44) it was exactly like the GMR Infra chart at that time. From 44 it moved up as it was a third wave. Can you explain the fundamental difference between two charts.
By the way I took position in nifty as per your call and booked profit today. Thanks a lot for that.
-Kishan
Hi Kishan,
You should also try to look at 1 degree on the higher time frame – a rough idea would suffice. For INR there was a huge 5 wave rally from 08 to 09. So at the bottom of Aug, you could be convinced that the correction was over. For GMR there was a huge 5 wave decline from 07 to 08. And the high of June 09 was exactly 61.8% retracement of the down 07-08 down move. If you had seen this, you would have known that the higher time frame would not have allowed a huge rally. The high of 65 in Aug 10 was the 2nd wave of a downswinging 3rd wave – so you were playing the countertrend rather than the bigger trend.
I did not track GMR so closely – I do not know what I would have done if I had been tracking. Remember, your mistakes in the markets are invaluable lessons. Stay true to your counts and then when proven wrong by market learn from it.
Cheers,
Jai
Thank a lot Jai Bala for the explanation. Now I can see the difference in the charts. But I got to say this – you use elliott wave principle in effective way than the elliott wave people themselves. 😀
Happy Holidays
-Kishan
hi jai,
i am holding one lot LT short from 1296 as advised by you the first target was 1100 and going as low as 700, i am following it down with a stop loss gap of 30 is this strategy okay? kindly advise if there is any better way of doing it, i have only booked 1/3rd qnty in Indusind rest 2/3rd i was holding with a stop of 240, it came down in last few minutes, kindly advise for further action on the same
regards
I think 30 is ok for now as the market is trending lower. On the day of pullbacks you will get stopped out. LT will drop to 830 or 700. If you get stopped out with this 30 point, wait for LT to reverse – re-enter when it breaks the previous day low and then maintain stop above the 2 day high. Yes maintain indusind 200 could get delayed to January but the trend is lower.
Best regards,
Jai
Jai,
I had shorted a pretty significant quantity of Hero M and hence decided to book profit at 1840. However, I am feeling that I might have exited early. A few questions :
– do u see a bounce in the stock in the short term ?
– should I re enter now ?
– any long term targets ?
Thanks. Again ur call on L&T for three digits bordered on the impossible when u made it, but……
Regards
Yes, it does look like there will be a bounce. I need to check the hourly charts here doesnt seem an easy count but it looks like it may not cross 1870 or max 1905 during the relief rally.
Best regards,
Jai
thanks
Hi All,
I’m having a relaxed holiday. My trigger on Silver went through at $28.1 – hope you guys had set it too. Will take partial profits Target $25.8 and potentially $22.8 for balance.
Enjoy!
Cheers,
Jai