Apr 092012

Nifty(5322): Nifty's struggle and inability to cross 5385-5400 resistance is the first sign of trouble. If Nifty closes below 5260 that will be sign of more trouble brewing. Going forward, the most important data points for us are going to come from currency charts. If INR prints 52.2, it will be the ultimate confirmation for us that the rally from Dec 2011 is over and the path to a new low below 4530 is underway.

The Euro seems to be forming a head and shoulder consolidation pattern. A break below 1.30-1.2975 would be additional bearish clue for us.

 Posted by at 8:24 am

  44 Responses to “Technicals 9th April 2012”

  1. Dear Sir

    I have a nifty short at 5360 levels. At what levels can we add to my positions.

    prateek sinha

  2. Jai,

    Any specific sectors to look at shorting ? How do you see the chart for Infosys ?


  3. hai jai


    • That is a valid reading of the market (small correction to your count needed and that is my alternate view). You can use that as stop is u think the market is going to turn bullish.

  4. Whats your short term view on the Nifty.Is it still unclear?

  5. jai
    i am still holding hero waiting for closing @2080.00 is it advisable to still hold since it has come down or should i exit, can u please guide me regarding wipro my holding is of 412.00 should i hold or get put of it

  6. error in above message kindly read for wipro should i get out of it

  7. Jai

    Please do a write up on the flash craash we experienced in Nifty yesterday. I checked the CDS spread for Spain and they have gone beyond their high in december.

    A small note on the nifty with a medium term view on Nifty would really help us a lot

    prateek sinha

    • Medium term picture – no change.As I have been projecting since Mid Feb, new low is coming. The question is when. INR 52.2 or lower would be one sign. If Nifty spot drops to 5077 it would no longer be a triangle.

      This is why we are long USDINR. We will add more to our position, heavily, when 52.2 is touched.

  8. jai
    in one of your earlier post you had mentioned regarding the price of copper going below 3.65 giving signal of coming correction, today it has touched 3.579, does it mean that the expected correction could come without a significant bounce up?

    • Yep. The signal from copper is that a new low is confirmed for the medium term for most equity indices. Tomo – would it lead to a small bounce and then a collapse a day or 2 later or would it accelerate the decline – thats what needs to be answered.

      Taking a straddle or strangle will be a good bet for tomo.

  9. hey Jai,

    what sur view on nifty at current levels??? An insight on gold & silver too pls??
    thanks, Pratik

    • Gold negatively biased but $1615-20 finding it a tough support to break, if that support goes, a brisk move to $1500 would come. Similar for silver at $30.9.

      As logn as Nifty remains below 5385, sell rallies.

  10. Can today’s up move be safely considered as the rise before the decline or can the Nifty go further up from here in the very short term?

  11. Jai

    You have given a long call on Jindal Steel.. Have you changed your view on Nifty i.e short the rallies…. We have yet not managed to reach the 5385 levels let alone close above it.. I have added jindal long as a hedge against my nifty shorts

    • Not changed. The call is on its individual merit – but we have to be light on this but can serve well if market were to bounce – direct beneficiary

  12. Can we take a out of the money put for next month,something like a 5000 put which is around 30 or should we wait for a confirmation that Nifty wont cross 5385?

  13. hi jai
    can u throw light on todays flash crash in nifty april futures going too 5000.00, and if possible your take on current month closing

  14. Given that INR hit 52.20 on Friday and even CHF crossed 57 and assuming the Nifty does not cross 5385 in the near term, can the new low below 4524 come in the same or lesser time frame than the time taken for the Nifty to go to 5630 from 4524?

    • Time is the most difficult component to predict. The trend is lower and as long as below 5385 expect markets to keep heading lower. BUT since the markets were compressed for so long, range expansion should bring in some quick move.

  15. jai
    if u can please comment on the immediate trend in nifty, before market open’s tomorrow.

  16. Jai,

    Has the tide turned ? do you think the time has truly come for shorting ? Thanks


    • The range got compressed and Nifty is now almost out of the range. Currency markets are pointing to further weakness. So yes, strategy should be to short the rise. Metals good bet

  17. Jai,

    i am short in Heromotoco at 2130, with USINR above 52.2, and market heading down, what target you anticipate.
    Also let me know at what price the downtrend is confirmed so i can add more if it goes below my purchase price


    • The ideal set up failed in HH. But if further follow through sell off is seen here, same tgt 1800

  18. Jai

    We had another crash in shanghai composite.It was up 1 % in the initial hour or so and in the next 20 minutes or so lost 2%. Is it simply algos playing wild and crazy or is someone big emptying their portfolio.It can be a result of ECB margin calls on banks for the LTRO money since spanish bond yields have been steadily rising over the last few weeks and by that logic those bonds must be losing money and hence the imminent danger of ECB Margin calls.

    prateek sinha

  19. Jai, do you think it is the ideal time to short NIFTY, given the S&P downgrade? Thanks

    • Im afraid the market is taking the bad news well. Atleast so far. IF market does not blow through 5135 and goes abv 5240 in the next session or 2, we must look at the MERIT of trading the market to the upside for the short term.

      • Jai
        ‘it might be because of the expiry. the max built up of open positions is in 5100 and 5200 puts.. Thus the effort to prop nifty up even after bad news. A clearer picture will appear only after friday close.

        Prateek Sinha

  20. Jai

    I was going through some material on kondratiev waves and how will affect our markets. This guy was speaking about multiyear distribuition patterns in various countries etc. I wish to know your view on it. Also i have a large portion of my investments in equity mutual funds.. Should i move that into cash with a 3-5 year view on the mkt. I would do that if we expect a bigger than 20% correction in the near term

    • Kondratiev cycle is a bit dubious in my opinion – anyway, I think its academic and there are easier options to decide on investment cycle. I expect Nifty to go below 4000 in 2012.

  21. jai
    is there any strategy by which we can buy out of money put 3/4/6/ months ahead and then just sit on it for the market to turn around

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