Food for Thought........!

[S S]

Hi!

The last week, everyone would say that the Indian markets shot up as a result of global phenomena, and followed the US & far east markets. Buxl Shxt.

That must be clear indications from the chart, but unfortunately, I seem to have missed it. That is why, I am NOT an analyst. But even a good mathematician cannot earn 100% marks in any and every exam. There are some problems the solutions of which, is difficult to find.

Many analysts had declared in the last week that the bear phase is over. Some declared that the momentum of the market has changed direction and is now bullish. Some even predicted that the markets may shortly cross 4700 with volumes and stay at higher levels.

May be. But that was BEFORE the RIL results were out. Now everyone is expecting RIL to fall by 150-200 Rupees, and one can understand it’s impact on Nifty and the overall market.

However, with the sudden rise in Nifty last month, I get a feeling that something has been missed, and inspite of the markets going down on Monday due to RIL’s fall, markets may have something up the sleeve for the next month.

If one wants to play safe, one could wait till Nifty is above 4700 with volumes. If one wants to take risk, then the drop on Monday [and possibly of Tuesday too for the forenoon session] could be used to take positions for Aug with appropriate stop losses.

My opinion, and I could be wrong
Cheers!
SS

 

[S S]

Hi!

There appears to be a very good tussle between the Bulls and the Bears, and no one seems to have made up one’s mind so far.

The weekly chart for Spot Nifty comes in handy. While there was a time that we were considering the H&S formation, which later got violated, now there appears to be yet another danger.

The high for the month of June was around 4693. This did NOT get violated in the month of July 09, but the high was around 4670, and that too in the last week.

This poses a possibility of the spot Nifty making a try to reach the high of June 09. Then there are following probabilities :

The previous recent high of 4693 is touched but NOT violated, and the markets come down and stay down in the next week, then it amounts to a double top, which is considered as a bearish pattern.

If the level of 4693 is touched, violated and markets surge ahead of 4700, then the next resistance level could be around 4783, where again two similar possibilities exist, rebound downwards from that level or successfully crossing that level with volumes.

Therefore, the next few weeks shall be very crucial in deciding the market direction. It is the breakout that everyone is waiting for, and so am I.

My opinion, and I could be wrong
Cheers!
SS

 

[call.krishna81]

thanks sir for ur regular update it helps a lot to us

Keep posting sir

 

[S S]

Hi Krishna,

If you find the posts useful, then thank yourself and your ability to think in proper direction to get you better yields.

I only provided food for you to think about

 

[debdeeps]

Hi SS, There is a huge gap at around 3700 so do you feel (technically) Nifty will retrace back to fill up this gap?

 

[S S]

Hi!

Keeping aside all other indicators, if we just check for the Cup & Handle pattern formation on weekly chart, we find two major possibilities.

If the handle formation has been completed, then possibility A would result, if not possibility B.

Note that it is a weekly chart, so I do NOT expect things to happen overnight, unless the handle formation is already over and possibility A is about to commence, which in my opinion, is less likely, though not impossible.

Therefore, in my opinion, at this stage, Nifty is less likely to go to 3900 level, leave alone 3700 or any level below it.

My opinions and I could be wrong.
Cheers!
SS

 

[Sultaan]

what is the possibility b that you show ?

 

[S S]

The Possibility A is clear. It is the upward surge from the high of current week's candle.

The Possibility B is shown in dotted dip in form of a saucer, which is followed by the upward surge ... just like in Possibility A.

Therefore, we need to see, whether the markets go up now, or after having taken a breather for few weeks.

Remember...it is a weekly chart and the dip could occure within about 4 weeks time, if at all it occures. The daily variation in the ups and downs may NOT really matter. Ultimately, it is the gain/loss in the weekly candle, that shall be of importance.

Cheers!
SS

 

[S S]

There is not much of a change from what was written last week. But there is one additional point one could keep at the back of one’s mind.

The US$-INR chart seems to have developed something like Head & Shoulder pattern. If it is H&S, then US$ rate could come down to 47 or even below.

This means that there is going to be an inflow of US$, which infers a likely heavy buying from the FIIs. This also means that the Indian markets may shoot up.

For Daily Spot Nifty, The Keltner bands have come inside the Bollinger Bands and for a while KBs may remain inside BBs when market remains range-bound.

But remember again. This is NOT going to be overnight. It shall take it’s own time. When the KBs are ready to move out of BBs, one should be watchful for the upward move by the markets with volumes, when the US$-INR shall be dipping downwards and the Adv-Decl ratio may totally be in favour of the advances, with very few scrips declining.

That is what my opinion is, and I could be wrong.
Cheers!
SS

 

[MurAtt]

Of course, there are exceptions to exceptions too and if sometimes you are wrong it is ok.
BUT THEN AGAIN
You are seldom wrong.
Cheers.

btw -- what BB & KB settings do you use for your analysis?