Mar 302012

Nifty(5178): Nifty on expected lines went below the low of 5165. The bullish interpretation at this point is that the move from 5630 is a corrective decline and the correction got over at 5135. What is in favour of this? The intraday momentum has not been able to clock new lows when price has done so. However, on the higher time frame , daily charts, momentum is with price.

What's the bearish case - the market is in its third wave and the waves are sub-dividing in a 1, 2, 1, 2 fashion. INR is in favour of this scenario. Other currency cross-rates are favouring this outcome. China as pointed is bound for a big big low.

So we need to see Nifty stay below 5400 on the counter trend bounce. Quite possible it might not even cross 5320-5340. Today, being the end of a quarter - we might see some window dressing by FM's

The chart below shows the above scenario.

Nifty intra day chart

 Posted by at 8:59 am
Mar 162012

Nifty(5380): Nifty caved in sharply yesterday and shed 1.53%, off the lows of the day. From now on the speed of the move is going to be important be it higher or lower. If we see gaps or wide ranged bars for more than just a day, it will signal to us that the market is moving in a impulsive fashion. As projected in our intraday wave count a couple days back, we think we may have finished the corrective phase to the decline from 5630 to 5165 and the next phase that takes Nifty below 5165 may have started. Watch 5330 today if market blows through that, we can be confident of a new swing low below 5165 (ideally 5077).

Some people are seeing a Inverse head and shoulder on Nifty. Mind you inverse head and shoulder is a bottom reversal pattern. It must occur after a prolonged decline. What we have on Nifty is some sort of prolonged advance. Hence in my opinion there isnt one on hand.

Open positions: Nifty March 5k Puts @13, RIL March 780 Put @7.5; Long USDINR @49.8 SL 48.8 tgt 51.75 (partially booked at 50.75)

 Posted by at 6:38 am
Mar 122012

Nifty (5333.55): Ok, let the chart speak.

Nifty- Hourly charts

Look for resistance to kick in at 5403 or 5460. A very remote chance of 5520. To get here Nifty could take today's entire session and possibly a little of tomorrow's session too. But once resistance is in, a fast decline should start, be it a C wave or wave 3 -  both have similar characteristics. Remember, it will not be a straight decline though as shown by the dotted line but rallies will be small.

 Posted by at 8:31 am
Mar 072012

Nifty(5222.40): An erratic day that finally settled lower by little over 1%.

Nifty Daily Chart

If the top at 5630 is a significant top, the counter-trend top, i.e. B wave correction to the 2010-2011 decline, there are two ways this can play out.

1) Nifty blows through 5090-5077 area - if this scenario happens, we have a powerful wave on hand and Nifty could drop straight to 4950.

2) The current decline stops at above 5077 - then there is a bounce coming through that may take Nifty to 5495 to 5510. Post that a bigger decline begins. There is some support at 5139 and 200 DMA at 5165. Hence, be willing to extinguish some short positions closer to 5100 Nifty.

Will be closely monitoring the internals of the move if the second case pans out - it needs to be in 3 steps , else the B wave stands a chance of moving higher to 5900 (see earlier post ). As the structure unwinds, Ill update in plain english.

Current positions:

Apollo Tyres  Long at 78, 3/4ths booked at 85 (I'm aware many did not get the SMS due to network Jam - this is for those who got)

Short Nifty Fut from 5450 spot, partially booked

Long Nifty March 5000 PE @32-33, partially booked @47-49

Long USDINR at 49.8 spot Tgt 52 stop 48.8

Previous position:

GMDC stopped out at 194.

 Posted by at 8:12 am