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

  48 Responses to “Technicals 16th March”

  1. Hi Jai,

    If you could enlighten me:
    What is an evening star pattern?
    Was it formed on Thursday?
    What are the implications?


    • Hi Hiren,

      Evening star is a 2 day candlestick reversal pattern, First bar is a narrow body candle (where open and close are very close) and the 2nd candle is a wide ranged sell off which shows the light is shut (so evening star). In Nifty’s case no it was not one – but the price action was negative.


  2. Jai

    The decay in nifty 5000 put is a bit puzzling. Does that mean that people dont expect the nifty to fall further. If that was the case then Nifty calls shouldnt have decayed by as much as they did. I am a bit confused which ” greek” did this to us.


  3. Jai,

    Can I request u for a slightly broader thought on the Bank Nifty ? Do you think this will lead the expected fall in the Nifty ?


  4. Jai

    We did close below 5330 but did not really blow through it. What do u think our strategy should be

    • We will give time till Monday. If it doesnt pick up speed or gap down’s it will mean we have to look at alternates for market

  5. Jai

    any views on the nifty….

    • So far it looks like it has to make new swing low below 5165 – be it bullish or bearish for the medium term. But abv 5466, it wud be bullish

  6. Strangely I am thinking about this previous post of Jai Bala.

    and look at today’s VIX

    -Kishan Bobba

  7. Do you think 5240 is the bottom, if so at what point we get confirmations?


  8. hai jai
    i am learner i have doubt pls can u clarify me

    1 )which wave is currently running Major 2 nd is right???
    2) If this is wave 2 means it is in “Flat correction or triangle”
    3)Wave 2 is divided into abc or 12345????? One more falling leg is pending or over?????
    4)Though Nift filled is gap spotted on 09th march 2012 so when Nifty taken support at 5233 its fresh buy and 3 rd wave started right???? Or else we need for confirmation???

    • Hi Sara,

      1)Don’t bother about wave degree’s; just know that set of small waves make something else in the higher degree and they in turn something else in higher degree and so on.
      2) Triangles are very rare in wave 2
      3) wave 2 is made of “three’s” or combination of three’s
      4) 3rd wave ? ur Q not clear.

      Best regards,

  9. Jai,

    Super call on the Nifty. Your confidence on seeing a dip helped pull a good trade on SBI. I also think, this call was against the general belief in the market. Good one.

    What next ?


  10. Shall we start accumulating the nifty in the range of 5077 to 5180 for an upward thrust to 5650 or 5950 or would you advice to start accumulation above 5325.


    • Ajay,

      These are decision point levels – so if you want to be bullish keep tight stops at say 5040. I think the market will find it difficult to cross 5330 now. Better to buy with the trend. So I will wait for market to take out 5330.

  11. If we want to take some strangle Nifty option positions for April,do we keep the quantity same or total amount same,given the fact that there is still a price differential between call and put prices,call options are still expensive compared to the put options for the same strike?

  12. hi jai,
    i am a bit confused after reading some of the above comments, in your earlier post as well as recent one you are bearish on nifty and possible target of 4960. where as in one of the above comments by ajays u are discussing of going long nifty for a possible target of 5650 or 5950? i think i have misunderstood something over here can u please make things clear for me.

    • Shabbir,

      5650/5950 are not my view. It’s just my response to a question. One can trade any side but must have a predefined exit strategy. Im bearish on markets

  13. jai one more thing i am holding 5300 put at avg rate of 60.00 of which i have booked half today till what rate should i be holding the other half, can u please touch base on few of the earlier scrips Larsen , Wipro, Indus Ind, Siemens, Hero, I am caught on the wrong side of the trade i.e. short on all of them but they are much above my sell price

    • Larsen needs a close below 1237. Though the bias is bearish – I do not think it presents a low risk set up. Wipro is strong at the moment, better to short TCS in the IT sector. Hero looks like a sell – some internal up down fluctuation need to be completed.

  14. hi jai
    awaiting for your feedback eagerly on above queries


    • I do not think 4400 or 4300 will become in the money in April. Try June – have my doubts on its liquidity and the premium cud be crazy.

  16. Sir

    Why CNBC calls (NTPC etc.) are not updated to members…

    • They asked me what do u think of power sector stocks like NTPC & I answered . Also risk reward 1:1. Can trade it if that suits your profile. I prefer to send 1:2 risk reward set ups to subscribers.

  17. Jai

    Any change in views on Nifty. I also came across an interesting observation, if we draw a regression channel connectiong the lows of december to todays low, we get a perfect channel whose top was exactly where nifty topped in February. Right now we are closer to the lower line of the channel


  18. How much probability will you give the Nifty breaking 5170 in the very near term?

    • Its higher now than it was yesterday. Attempt is being made to keep index up for the march expiry.


  20. JAI

    On the basis of option data it looks like the expiry should come between 5200 and 5300 region. May be we can short Nifty close to 5300 and target 4960.

    Also can you have a look at the charts of following stocks
    1. axis bank
    2. Coal India
    3. Jindal Steel

    1. hdil
    2. Financial Technologies
    3. Bajaj Auto

  21. Jai,

    Thanks. Last one month your views convinces me that normal services have resumed 🙂

    How do you see this panning out further. Is it better to be on the long side for a bounce or rather continue with short trades as you are expecting deeper corrections immediately ?


    • Im expecting new low below 4500 RUT. China is headed below 2008 low. Looking for 52.2 on INR and 57 on CHFINR for final confirmation

  22. hai
    can i close ster

  23. jai pls give the closing call also

  24. hi jai,
    i have also not received close call on sterlite, i am holding april futures should i hold it longer kindly advice if hold what should be the price target

Sorry, the comment form is closed at this time.