Dec 052011
 

Nifty(5050.15): Given that Nifty hit resistance of 5065 on Friday and evolving technical structure on the intraday charts, there are odds for this market to turn lower from here.

Nifty Daily chart- short term cycles

Nifty - hourly charts

Also, since January this market has shown tendency to provide reversals around a 6-7 day time period after a rally from a swing low. If this cycle is still in force, this should act as additional impetus for the roll-over to the downside. If you are already short on this market, you might want to use a stop above 5110. This happens to be the 61.8% fibonacci retracement of the entire decline from 5400. The conservative trade is to look for a lower low, lower high pattern on intraday charts before initiating short position. Remember the seasonals for December: Only 3 negative Decembers for Nifty since 1992.

Open Positions: Long OFSS 2037 SL 1953 Tgt 2200-2250

Short Heromotors 2025 SL 2195 Target 1750

Long Apollo Tyres 64 SL 59 tgt 71

Short Silver $34.2 stop $33.5 Tgt 28.8

 Posted by at 3:08 am
Dec 012011
 

Nifty(4832): The day was ranged between important supports of 4725 and resistance of 4866 though an erratic and volatile day with a mildly positive finish. Now given the global euphoria about cheaper dollar swap lines, Nifty is very likely to take the double three corrective outlined here in yesterday's technicals.

Nifty - intraday charts

The resistance at 4980 is going to become important today, and if by some chance markets exceed 5000, It would do a world of good from a contrarian point  of view- weak bears would fold, fundamental traders would think the low at 4640 was THE LOW and world would  become a better a place because the central bankers "solved" the problem of insolvency with cheap credit!!!!

The level of 5065 is the level of a previous fourth (red horizontal line on chart), most corrections end around the previous fourth or slightly below. The volume footprint has left 5015 and 5040 as important levels for market activity. So be aware that the zone of 5015-5065 is a big resistance cluster. So those of you who have been saying you are high risk traders in the comment section, this is the zone you need to step up and stand in front of the market.

Open positions:

Same as yesterday. Hero Honda if it comes to 2130 (unlikely) do not close, the stop is likely to get revised to 2195 and we may stay on for the bigger trade to 1750-1400.

 Posted by at 3:15 am