Nifty(4967): Nifty had another up day and pierced through resistance at 4920-50 zone. As labelled on Monday, there was some doubts over the end of the C wave , which is why we had an OR c label and this exactly why we called for some additional patience yesterday. As the market goes higher, it pushes the sentiment one sided and emboldens the late buyers. The next resistance for Nifty is at 5022 and Nifty is still maintaining the bearish configuration of 5 down 3 up mentioned on Monday (click here).
The important development over the last two-three weeks - probably very few have taken note or even aware is the baltic dry index.
Baltic dry index - weekly chart
The index has dropped precipitously over the last fortnight, shaving off a nasty 50%. This does not augur well for the world economy. There might be delay in equity markets reaction but it will react soon as this often tends to lead equity market moves.
So as far Nifty is concerned the conservative trade is to wait for overlap at 4800 or an one day reversal that tells that overlap of 4800 is coming. Patience is a virtue and it will reward handsomely - sit on your hands. If you can't keep your thumbs down, go for an out of the money put in small quantity but remember you would be preempting the market if you did that.
Some of you are curious about gold - NO it has not formed a double bottom.... yet. It is a double bottom IF AND ONLY IF it goes above 1805.
Gold - Daily charts
As can be seen from the chart above Gold is rising with much lower volumes. This is not a bullish sign. After a small bump Gold is set to resume lower. Ill keep it very simple without getting technical. Dollar Index is unlikely to drop below 79.5 and head to 85 by Feb March. Can gold suddenly decouple from Dollar and move up with Dollar? It can but extremely unlikely. The same holds for silver. QED
11 Responses to “Some Charts”
Sorry, the comment form is closed at this time.
Jai,
Thanks.
Just understanding your comments better – as a response to my last question, u had mentioned that IT seems to have rolled over. So….why would you not give a call to short the IT index ?
1. Risk is high
2. Upside is low
3. We have missed the bus
Again, this is not for the specific case but to understand your comments related to some of the questions asked.
Finally, more specific, do you see immediate downsides in Infosys ?
Thanks once again.
Hi Rut,
Perfect :)If CNX IT pulls back to 6200+, it will be good shorting chance. Support at 5700 – so risk/reward not good at present
Hi Jai,
Have requested for some opinions yesterday on the blog.
Pls let me know your opinion on HeroMotoc and Bajaj Auto. We have stayed short since last month. What’s the path and the targets for these in your opinion.
Regards
Srikanth
Dear Srikanth,
Someone else too wanted a view on Hero and I have answered in the comments section. Bajaj similar picture, will drop to 1173. 1485-1530 ceiling.
Dear Sir
Baltic Index does paint a very sorry picture of the economy but what i understand about the shipping industry is that shipping is plagued with heavy oversupply and the index does behave in a very volatile manner.
I dont disagree with what you say but just wanted to give an alternate view.
prateek sinha
Dear Prateek,
1700-1400-1650- 1350 kind of price move is erratic. 1700 to 975 is called C-O-L-L-A-P-S-E 🙂
Jai
No updates for today ??
No change in view, hence no update.
hi jai,
any thoughts on SBI
Hi Sir
There is a morning star reversal visible on Icici Bank.. Any views on that if we want to take a intraday swing on that.
Dear Prateek,
No morning star. Morning star occurs at the bottom after a prolonged move, not in the middle of a move. Hope that helps.