Wednesday, April 29, 2009
The bullish undercurrent that we could sense for the past three days finally turned out to be a move to trap the bulls themselves and NIFTY corrected significantly (exactly by the same amount of an expected upmove).
All this time, the concern that this rise has been with low volumes indicated that the move is not genuine and this was expected to happen anytime soon, but the expectation that this will not happen for this expiry proved to be wrong.
Given this situation, it might again be premature to say for sure that market is going to crack from this level too soon. It has to again penetrate through all the well known support levels, initially a test of 3334 followed by 3300 levels.
Any break below 3256 will clearly confirm the downtrend and a break below 3120 going forward would mean disaster. The question now is that can this all happen again so fast as it happened on the upside.
This is not clear at the moment and NIFTY could also be range bound from 3200 and 3447 levels before the next big move is triggered.
So it is wait and watch for the time being.
Resistance levels : 3403, 3423, 3447
Support levels : 3334, 3303, 3256
Tuesday, April 28, 2009
Markets made a new high for this month series yesterday and bulls could do it despite all the global weakness yesterday. Considering the move from sub 3300 levels to reach the peak of 3517 levels reiterates the fact that this expiry is again under the control of bulls.
A gap up to 3500 levels is also not ruled out and a run up till 3580 can take place today itself.
All the key levels remain exactly the same.
Sunday, April 26, 2009
The move in the last two session came as a complete surprise and also as a severe blow to the late entrant bears. The move was so clear and the trend was very much up without much of retracement and so gave very little chance for even the intraday bears to escape unhurt.
The fact still remains that those bears who enjoyed last week's intraday profits by shorting whenever nifty reached its 200 DMA are yet to believe that NIFTY is now so strongly placed above its 200 DMA and has made a strong 4.4% upmove in the last two days. Most of those to whom I talked with are still unable to take their stops and are simply sitting with a hope that NIFTY will tank before expiry and bail them out.
Given the current scenario and the way we have seen the moves of the strong bullish undercurrent, NIFTY has to see much higher levels before this expiry. A move above 3510 will be the first shock for the bears which can immediately push NIFTY to test 3580 levels and there is also a strong possibility of testing 3630 levels tomorrow itself or atleast a day after.
Tomorrow is again a big deciding day. If NIFTY gaps up and moves past 3510 immediately, then the rest will automatically fall in place.
Friday, April 24, 2009
Thursday, April 23, 2009
Again the trend is continuing, lower highs and lower lows everyday and a retracement from the low levels to close almost near the previous session's close. This has been continuing for nearly four sessions, NIFTY honouring the 200 DMA as the resistance level and testing support levels one by one each day.
Will this trend continue?
This is where my view differs and each day it tests a new support and gains strength, the bullish view gets further strength. The fact remains that the key level of 3256 is not yet broken and majority of the bears are trapped below that level.
Also this consolidation has been with very low volume and most of the heavyweights are taking support at key level (either 20 DMA or 200 DMA) and are ready to move higher.
The fact that the undercurrent is still very much bullish, how long this consolidation phase will continue. This is the important question and the expiry of April series has another 6 trading sessions left including today and the question remains as to whether there will be a breakout either side before this expiry.
My view is still that we might not see a breakout on the downside and NIFTY should not even test 3256 levels for this expiry.
Resistance levels : 3357, 3392, 3415
Support levels : 3304, 3256
Wednesday, April 22, 2009
Tuesday, April 21, 2009
Monday, April 20, 2009
Friday, April 17, 2009
Thursday, April 16, 2009
Tuesday, April 14, 2009
Higher highs and higher lows in the last 3 sessions. Bulls still strong but bears to take control ??
Sunday, April 12, 2009
Is it like biting the elbow.. so near yet so far for the bulls ?
In any case, the current view is bearish, but bulls reaching the 200 DMA milestone and rejoicing around that level for one day or two is also not ruled out before bears can take control.
It is better to look for shorting opportunity if 200 DMA is breached and may be also employ a martingale strategy of accumulating the shorts at higher levels. If it seems risky to do so, then it might not be as risky as we perceive it now.
A near vertical break of 200 DMA and a further bull run without even testing 3250 levels does not seem like a possibility at all at this stage.
Another way of looking at this is to simply wait till this steam of buying subsides and a reversal pattern is made and then enter on the short side. In any case I still hold the view that a break below 3140 seems to be remote atleast for the April series, but a pull back till 3250 seems like a good possibility.
Thursday, April 9, 2009
Bulls fought a very ferocious battle today braving all that was against them with a Dow correction, Asian markets all trading weak, a very weak opening, down 100 points, over bought indicators and what not.
In the end, it really proved that the undercurrent was very much bullish and bulls could rise against all odds. The moment the key level of 3140 was not broken and that most of the end-of-the-day bears were all sitting in pain already added fuel to the fire and bulls took complete charge and proved their might.
Now that it is history, what next is the big question?
The 200 DMA is now very near at around 3437 which is another milestone for the bulls. But then if that is reached will the bulls be able to penetrate through that with full might and reach further high levels.
This is where my view is extremely cautious.
9 out of 10 analysts have all gone bullish and the retail sentiment has started to fly high and there are headlines seen as to sensex could see 21 K levels again and so on...
The weighted volume for NIFTY that we saw today is the highest in the past six months and it looks like everyone is getting sucked into this as if there will be no gravity tomorrow and going forward.
Now if we have a close eye on the technicals, NIFTY has had a consequtive 5 day bull streak and most of the indicators are in the over bought zone which might start showing its impact going further.
It might be high time to think in terms of a bearish trend reversal, though it will certainly be premature to initiate a trade in the direction. The best strategy would be to go for a 'bear call spread', selling 3500 calls and buying 3700 calls for a net credit if at all NIFTY breaches the 200 DMA tomorrow as my take now will be that, there will be a reversal atleast in the short term before this expiry and the 'bear call spread' seems to be a safe bet.
Chart courtesy: nseindia.com
Tuesday, April 7, 2009
Saturday, April 4, 2009
This is where psychology comes into picture and can throw some light on