Morning Update at 0800hrs for Intraday Market Level

[pranayk]

morning update at 8 am 16 july 09

as was written a few days earlier, dow having closed above critical level of 8200 will head for 9000+ levels & on wednesday night dow moved up by a record 256 points to close at 8616 and after small corrections & flats dow will cross 9000 by end july. European markets closed 2% to 3% up with uk ftse closing up by 2.6%. Brazil had a great day & was up by 5%. Asian markets have opened in the +ve & likely to continue with the bullish momentum.

For indian markets, expect a gap up open around the critical level of 4292 that may see the big battle between bulls and bears. A decisive cross over may see nifty moving up towards 4355 to 4380 levels. The way markets are moving up it looks like the a,b,c correction from 12th june high of 4693 till 13th july low of 3919 is over & nifty is all set to shoot past 4693 to move towards 5000 levels as next leg of the up move. However bulls should not take things for granted as long as nifty does not move up to decisively breach and close above the critical level of 4480 or at least close above 4424. Till such time nifty does not decisively cross budget day high of 4480 or close above 4424, nifty can always slip down. Bullish traders must keep this in mind.

For thursdays trading, it is wiser to hold longs, bought calls and also the puts. Option traders having both bought calls & puts may quit the puts on any intraday decline or by holding on to the bought calls(must), short 4400 or 4500 calls as nifty crosses 4300 & hold on to earlier bought calls of 4000, 4100 & 4200 along with shorted higher calls. Future & option traders may have nifty level 4222 as the must quit point & hold longs as well as calls till 4222 is not breached. Possible target for nifty on thursday is 4355 or higher levels till 4380 if nifty sustains above 4292.

 

[pranayk]

markets for 17 july 09

after the gap up open for just 1 second at 4305 nifty could not sustain above the given magic level of 4292 and kept on falling gradually from the start through other critical fibonacci level of 4266 and 50 & 20 dma cross over point of 4230 to 4240 to close flat at 4231. In fact there were may bouts of up & down movement across the 20 & 50 dma cross over point. Most likely nifty will move up saying final bye bye to this magic cross over point perhaps early next week. The fact that nifty has closed flat after 2 days of big up move, there is every possibility of upward break out after another day of consolidation.

The markets had come down from budget day high of 4480 & now since day by day budget is proving to be a good budget, the budget crash will be fully retraced perhaps by mid next week. Traders must remember the magic level of 4292 which nifty must decisively cross during actual trading to shoot higher up & as long as this magic level of 4292 is not decisively crossed, nifty will consolidate for some more time before taking it on, to even shoot past 4480 levels.

Nifty had gone up by 386 points from mondays lows of 3919 to a high of 4305 on thursday. So it is quite reasonable to pause for a day or two before moving up further. Dow too having moved up by 256 points on wednesday night is likely to pause a bit before heading for 9000 levels next week. In the daily eod chart of nifty, most of the daily indicators are giving indications of further up move.

For intraday trading on friday, the cross over point of 20 & 50 dma will again play a major roll in attracting & repelling nifty up & down before finally giving it up. On last friday nifty had closed at 4004. So one should not expect a big rise on this friday that will be quite unreasonably high from last weeks closing of 4004. So one must have the patience to see some more consolidation between 4142 & 4292 before breaking out on the higher side next week.

Us & asian markets also will play a major role in deciding the extent of consolidation in indian markets. For friday nifty has intraday support around 4200 levels a breach of which will weaken nifty to lose about 75 points to find support around 4125 levels. So critical support for friday is 4200 & critical resistance id 4292, a decisive breach on any side can see a big move on that side.

If traders are able to see the 5 minute or 15 minute intraday chart for 16th july, they will notice that nse index has bounced back thrice from the pivot level around 4205. So, for intraday trading on friday , the pivot at 4205 to 4200 levels will play a major roll in supporting nifty. So with two intraday highs around 4292 and 4276, if the neck line around 4200 is decisively breached then expect a sharp fall towards 4164 to 4141 & then 4125 levels which is a good buying point for carrying over to next week. Secondly , during intraday trading on friday, if nse index manages to cross 4275 to 4280 then it can reach 4292 to threaten 4300 levels to reach 4325 to 4345, which seems to be most unlikely on friday at least because last fridays closing was at 4004.

 

[pranayk]

morning update at 8 am 17 july 09

dow continued with its bull march by rising another 95 points most of the rise coming during the second half of the day. European markets were up around .5% with uk ftse closing .35% up. Brazil continued with its bull run by moving up by 1.2%.asian markets due to week end considerations have opened flat to mildly bullish & may remain flat to mild by end of their trading.

For indian markets expect a flat to range bound market within the range of 4200 on the lower side and 4277 to 4292 on the higher side. A decisive breach on any side may see a good move on that side. 20 & 50 dma cross over point around the closing levels of nifty at 4230 will play a major roll in repelling nifty away & then attracting nifty towards it to finally close flat or mildly weak.

Dow having gone up so much, is likely to correct or remain flat on friday night. So option traders should carry both 4200 call and a 4100 put for next week. As nifty comes down, buy a 4200 call and as nifty moves up towards 4275 or 4290 buy a 4100 put and carry both the call & put for next week in the ratio of 2 calls to 1 put or safe traders may carry call & put in equal ratio. Carry over of un hedged future positions should be avoided. Market magic reliance having gone up nicely during last 3 days may correct to restrict any big up move in nifty.

On thursday nifty future just touched 4290 and started to fall. So on friday 4290 may be a major resistance for nifty future although on lower side 4190 to 4177 can even be tested by nifty future.

 

[pranayk]

weekly markets analysis for week ending 24th july 09

with analysts & common people realizing day by day that the budget was really a good budget, the budget day crash from the level of 4480 will be fully retraced by nifty in equal number of 6 days that nifty took to fall from 6th july highs of 4480 to 13th july low of 3919. As on friday 17th july nifty has taken 4 trading days after 13th july lows to reach 17th july high of 4390. So, another 90 points can be covered either on monday or most likely on tuesday. As was earlier said, a decisive cross over of budget day high of 4480 will see extremely sharp & swift move to cross june highs of 4693 towards much higher levels before the expected mid august crash.
Traders & investors must keep in mind that the rise from present levels of 4375 is not going to be a cake walk but will be a jerky move as indian markets are going to be influenced by world events, as well as us & asian markets. However the fact that nifty has decisively crossed over & closed above the magic level of 4292 as well as above the critical cross over point of 20 & 50 dma around 4230, there is every possibility of nifty ultimately conquering the highs of 4480 as well as 4693 for resumption of bull run towards 4800 to 5000 nifty levels. Long position holders may now have 4305 to 4292 or at the worst 4230 as the quit point and remain long for targets of 4800 in coming days. Most likely the abc zigzag correction from the high of 4693 till the lows of 3919 is over on 13th july, which will be confirmed after nifty decisively breaches 4480. Inability of nifty to breach and close above 4480 will again set weakness in nifty for another consolidation pattern before mustering enough strength to cross it to shoot past 4693 towards 4800 levels.
As per candle stick chart pattern, from 14th july onwards,2 white soldiers followed by a doji that was decisively breached on the higher side by another white soldier closing near the highest point on friday 17th july, should under normal circumstances take nifty higher by at least an equal amount of distance from the base of 2 white candles(3974) till top of doji candle(4305) which is 331 points, from the base of next white candle(4230) after doji candle to the levels of 4561 in next 2 to 3 days. However after a decisive breach of 4480,one can expect much higher levels. So, traders must use every intraday decline to buy futures and calls keeping 4305 to 4292 or more safely 4230 as critical support area. With the result season showing good and much better than expected results, possibility of higher highs look quite bright. Us & asian markets are also likely shoot up to much higher levels after an expected pause.


weekly technicals for week ending 24th july 09

the way markets have moved up during last 4 days after 13th july lows of 3919 have given enough strength to the indicators to turn mega bullish again. If one has a look at the daily eod chart above, nifty has breached and closed above the resistance line coming from the tops at 4693 and 4480.secondly in the closing daily eod chart, the closing resistance line from the closing tops at 4655 & 4424(black line) meets at 4300 & on friday 17th july nifty decisively closed at 4375 much higher than the closing resistance line. This coupled with a decisive cross over of the 20 & 50 dma point gives added strength to nifty for further up move.
In the weekly charts, the big rise of 370 points on a week on week closing basis have started to infuse life into the drooping weekly indicators to look upwards. Weekly macd with a +ve divergence of 58 looks highly bullish. Rsi turning up before breaching 50 is another bullish signal. The weekly indicators will take 1 more +ve week to generate confirmed bullish signals.20 week sma above 50 week sma , 50 week ema above 200 week ema together with nifty trading well above all these 4 weekly moving averages confirm the long term bullishness of markets.

All the daily indicators are giving strong bullish signals for further up move to new highs. The cross over of macd & its signal line in the daily chart above can see another sharp up move. Trend indicator the adx although at 25 is looking up & +ve dmi at 34 has crossed -ve dmi at 18 & has generated strong bullish signals again. Lack of showmanship & dull presentation, in an otherwise good budget on 6th july, ruined the bulls party for 1 week & the only thing that can again spoil the bull party this time could be due to the negative influence of us & asian markets, otherwise nifty is all set to cross 4480 to target yearly high of 4693 in coming days.

elliott wave count for week ending 24th july 09

the abc zigzag formation from the highs of 4693 till lows of 3919 seems to be over and a new up wave has started from 3919.if one counts the waves from the 6th march lows of 2539.1st up wave was till 16th april high of 3511.2nd down wave flat was till 3297.the 3rd up wave was over on 12th june high of 4693. The 4th corrective wave zigzag was till 3919.now perhaps we are in the 5th up wave from 13june lows of 3919 that should be generally equal to 1st wave of 972 points that should take nifty to around 4888 to 4900 levels. This will be the 1st major up wave of the new bull run after which one can expect a correction possibly around mid august which will be of a zigzag pattern that can come down to about 4000 or lower levels.

If the 5th wave has started from 13th july lows of 3919 then this will consist of 5 waves, 3 up & 2 corrective down. The 1st up sub wave was from low of 3919 till 16th july high of 4305, a total of 386 points. The 2nd corrective down sub wave was till the intraday low of 4206 on 16th july. Now the 3rd up sub wave of the 5th wave has started from the low of 4205 which is generally 1.62 times the length of 1st up sub wave of 382 points which should take nifty from 2nd sub wave low of 4206 by 624 points till 4830 after which there will be another correction as 4th sub wave, to be followed by 5th up sub wave of the 5th wave towards 4900 to 5000 levels. So if things go fine without any unexpected hitch, then the present up move can take nifty to around 4800 levels with mini sub sub corrections in between.



fibonacci levels for the week ending 24th july 09

from the high of 4693 till the low of 3919, nifty fell by 774 points. So as per fibonacci rule, various stages of upward retracements are:- 38.2% till 4214, 50% till 4306 and 61.8% till 4397. On friday nifty having reached till 4390 has crossed 38.2 & 50 levels & most likely will cross the 61.8% level around 4397 on monday. Since a fresh up wave has started from the low of 3919,the fibonacci levels of previous correction are just for academic interest only & fibonacci extensions of last up leg will play an important role.

The up move from the low of 3919 will have 5 legs. The 1st leg was till the high of 4305 covering a distance of 386 points, the 2nd down leg was till low of 4206.the third up leg in which nifty is presently trading will move up 1.62 times the first leg that should take nifty from the 2nd leg low of 4206 till 4830 levels.



weekly trading range for week ending 24th july 09

expecting the coming week to have 3 +ve days and 2 -ve days, nifty can trade in a broad range of 4480 on the higher side and 4305 on the lower side. A decisive breach on the higher side can easily see a sharp rise towards june high of 4693 but may not be reached this week. A decisive breach of 4305 can bring down nifty towards 4205 levels that will see solid buying support.

Traders may remain long with quit point below 4300 nse index levels & should add more longs in case index decisively breaches 4480 levels. Even a decisive close above the critical closing level of 4424 may indicate sharp up move towards next closing level of 4518 followed by closing level of 4655.

 

[pranayk]

markets for 20 july 09

trading on monday opens with fresh optimism of a buoyant previous week as well as huge disinvestment proposals announced by govt sources. Baring a nasty surprise from asian markets, there is every possibility of nifty crossing the psychological 4400 mark to head towards the critical level of 4480 levels. However when every one is bullish, the operators play the reverse game as had happened on thursday, when every one was bullish after a 256 point rally in dow, nifty after opening gap up at 4305 kept on falling continuously on thursday till 4205, only to move up on friday. Not withstanding the hedge fund operators game plan of counter action, the charts of indices look extremely strong till at least 4480, the level around which will decide further fate of nifty. There is every possibility of resumption of bull run from where it left on friday, after just a minor blip on monday or tuesday to shake off weak hands holding long positions.

For intraday trading on on monday, in case asian markets do not demoralize, then expect nifty to open and move up to 4400 levels where it may find temporary resistance. A decisive cross over of 4400 & sustaining above it can take nifty towards 4414,4440 to 4444 levels that may see some profit booking. Sustaining above 4444 can take nifty to next resistance at 4466 & finally to 4480. However with weak asian markets, expect nifty to find initial support around 4368 levels followed by strong support around 4343 levels. A decisive breach of 4340 levels can take nifty down to 4313 levels that may see reemergence of buying interest for next leg of up move to cross the critical level of 4480, most likely by tuesday, if results to be announced are good and us markets dont disappoint on monday night.

Traders holding long positions must hold the longs & bought calls of 4100 to 4300 and bought puts of 4000 to 4100 & written (shorted) lower puts. Along with it, traders can write (short) higher calls of 4500 instead of booking profit on futures & lower bought calls. With the big announcements of disinvestment plan, long term investors must buy stocks of ntpc, eil,bhel,sci on every decline and hold these for great gains in the long term. Future traders may trade on the long side on these futures on every intraday decline.

 

[pranayk]

morning update at 8 am 20 july 09

on friday night, with no negative news from us markets, dow closed 32 points up, brazil closed .3% up, most of the european markets closed +ve with uk ftse closing .6% up. Asian markets have opened in the +ve and may remain +ve.

For indian markets, expect the bull run to continue with bouts of profit booking & short covering time & again. Nifty may find support around 4343 where solid buying support is likely to emerge and resistance around 4433 to 4444 where some profit booking may be expected. After a pause, nifty will cross 4480 to move towards 4693 during the week. Traders should remain long and add long futures and calls on every intraday decline towards 4343 index levels. For sgx nifty, traders must see the volume of nifty traded in sgx nifty before seeing the price.

 

[pranayk]

markets for 21 july 09

as expected nifty crossed the critical level of 4480 to move up above 4500 to close above 4500 levels. The fact that nifty took just 5 days to cross 4480 levels from the lows of 3919 which was 1 day less than it took to fall from budget day highs of 4480 to the lows of 3919,shows continuing strength in nifty to shoot past the june highs of 4693 much before july expiry. Now a minor but trapping hurdle around 4538 remains to be decisively crossed by nifty to head straight for july highs of 4693.

It is interesting to note that other asian indices of hong kong, singapore & korea have already breached the june highs on monday 20 july. So unless there are nasty surprises, there is every possibility of nifty and sensex crossing june highs of 15600 & 4693 in next 2 or 3 days. If one has a look at the daily eod chart of nifty above, one can clearly see nifty decisively breaching the resistance line at 4370 coming from the june top of 4693 & budget day top of 4480. So after a small pause nifty can shoot past not only june highs of 4693 but will move up by an amount of 450 points from the breaching point of resistance line around 4370 by nearly equal to width of the channel between 3919 and 4370 that should normally take nifty towards 4820 levels in coming days. Make full use of this mega bullish move by adding longs on every intraday decline.

The indicators like rsi,cci & macd,roc & adx in the daily charts are giving super bullish signals that can take nifty to much higher levels in coming days. However one can expect a day or two of correction or a flat type consolidation during the week before another sharp up move. Investors & traders should make full use of these pauses for adding long positions as long as nifty does not fall to breach & close below 4480 again. A close below 4480 again can take nifty down towards 4390 to pause & muster enough strength to move up & shoot past june highs of 4693.

For intraday trading on tuesday, nse index has initial support around 4480 followed by 4466 & finally 4444 where solid buying is likely to emerge again. On the higher side 4538 may be a pausing point for nifty, a decisive cross over of which can take nifty to next higher level of 4555 above which 4600 can be within easy reach.

 

[pranayk]

morning update at 8 am 21 july 09

last night dow continued with its upward march with a 104 point gain and closed at 8848.having now gone up for the 6th day in a row, dow most likely will breach the june highs of 8911 this week, but there is possibility of a pause either on tuesday night or wednesday coinciding with the eclipse on wednesday, although the solar eclipse occurring in the cardinal signs of cancer capricorn axis may give a booster dose to the ongoing up move. In fact the markets had started to move up in anticipation of this market friendly solar eclipse. European markets were up by 1% to 1.5 % with uk ftse closing up by 1.25%. Brazil was up by 2%.asian markets have opened up and may continue to remain +ve.

For indian markets, expect a +ve opening to move up to cross mondays highs of 4510 to move up towards initial resistance around 4538 levels & then 4555.on the lower side 4480 to 4466 will provide support to the index. Or it could be a flat open followed by initial correction till 4480 or 4466 to move up towards the later part of the day.however, having moved sharply up on friday & monday, although the markets look extremely bullish to make a 3 white soldier pattern in candle sticks on tuesday, yet one should be a little cautious at higher levels and book some profits to re enter at intraday corrections, to avoid getting trapped by operators action.

For intraday trading, traders may continue to hold long futures and calls as long as nse index remains above 4466 or at the worst 4444 levels. Traders holding long future positions & lower calls may hold these and remain in the markets by writing (shorting) higher calls of 4600 on rise of the index . Wednesdays eclipse phobia may generate a false fear towards end of trading on tuesday. Traders should make full use of this intraday correction to add longs and buy calls & have 3 calls to 1 put ratio. A correction at this stage if it comes in the pretext of wednesdays eclipse, is extremely healthy for further up move of markets to make new yearly highs above 4693.

 

[pranayk]

markets for 22 july 09

after 2 days of mega up move from thursdays lows of 4205 till mondays highs of 4509,nifty took a well deserved pause on tuesday to muster enough strength to shoot past mondays highs of 4509 towards june highs of 4692 before this expiry. The day was quit a volatile one with bears trying to breach the critical 4440 support levels & bulls trying to save the support level to take nifty past mondays highs of 4509 & finally bears had the last laugh by managing to close nifty below the critical level of 4480. Since nifty is in the process of 4th sub wave flat formation, there is every possibility of another day of consolidation within the channel range of 4427 on the lower side and 4490 on the higher side.

If one has a look at the 15 minute intraday chart below, one will notice that nifty is confined within a bigger upward going parallel channel by joining the top of 1st wave at 16th july high of 4305 & top of 3rd wave at 21 july high of 4509 on the higher side and by joining the 2nd wave lows at 16 july low of 4205 and tuesdays level of 4455.secondly, nifty is confined initially within a lower slopping rectangle within the limits of 4490 on the higher side and 4427 on the lower side. A breach on the lower side can bring down nifty to next solid support at the base of the bigger rectangle around 4411 and a breach of 4490 on the higher side can take nifty towards mondays highs of 4509 as the upper side of the bigger rectangle.

So, on wednesday, a decisive breach of lower channel at 4455 can bring down nifty initially to inner rectangle lows of 4427 and if this level of 4427 is decisively breached, then nifty nifty can slide to take final support around base of outer rectangle at 4411 where solid buying support is likely to emerge. Similarly on the higher side nifty finds initial resistance around 4490 & then 4509. A decisive breach of 4509 with volume during actual trading can easily take nifty to next resistance around 4538 followed by 4555.

One thing to be kept in mind is that, the indices after a day or two of pause after a big up move should generally break out on the higher side. Almost all the asian markets baring sensex & nifty have already breached june highs on friday & monday and it is just a matter of time one will notice that after the present pause is over both sensex and nifty will breach the june highs of 15600 & 4692 by early next week if not during this week.

 

[pranayk]

morning update at 8 am 22 july 09


last night dow was up by 67 points and in the bargain had a consecutive 7th day of up move & breached the june highs of 8911 to move up to close above it at 8915. European markets were up by about 1% with uk ftse up by .8%.european markets too touched june highs and closed just at it. Brazil was flat and was up by only.1%. Asian markets having already crossed june highs on monday, have opened mixed & may remain flat to mixed today and are all set for much bigger rise in coming days.

For indian markets, as it had corrected yesterday, expect a flat to mildly bullish opening around critical level of 4488 to 4490. A breach of which can take nifty to mondays highs of 4509.trading above 4509 only can generate bullish momentum to take nifty to next higher levels of 4538 & 4555 or even 4600+ levels. Be sure, indian markets will not be left behind us, european & other asian markets by trading below june highs of 15600 & 4692 and will very soon cross these levels to trade above june highs.

On the lower side 4455 to 4450 is the critical support for the day as can be seen in the chart above below which weakness may set in for an intraday fall towards 4427. Traders must buy on every intraday fall for good gains in coming days before expiry. Call holders may write higher calls of 4700 & 4800 on rise of index towards june highs but must hold lower calls. Dow having gone up for 7 days in a row may correct for a day or two or remain flat, but that may not deter indian markets in crossing june highs.