Wednesday, May 31, 2006

TECHNICAL OUTLOOK - 31, MAY

31, May
Nifty 3214.90

If Nifty manages to stay above 3140 region, and if it moves towards 3250 region sharply, then a move above 3250 region would confirm a rally towards 3350-3400 region initially. For the level 3140 to be broken in the downside, Nifty should go below 3140 level immediately in the morning itself. For Nifty to move above 3250, it should move above this region before afternoon, since upmove should be faster than the downmove to show strength.

If the region 3140 is violated in the downside, Nifty would move towards 3000-3050 region sharply. If the level 3000 is held, Nifty could bounce back, and higher targets are valid. If the level 3000 is not held, we could see further downside.

It Seems Nifty has bottomed out and has turned bullish. Initially, it could move towards 3500 level. After a short term correction of 300 points from that level, Nifty could move above 3500 level and it has possibility of testing 3800 in coming weeks. The view would get negated if Nifty moves below 3000 level.


Tuesday, May 30, 2006

TECHNICAL OUTLOOK - 30, MAY

30, May
Nifty 3214.90

As I have mentioned yesterday, if Nifty sustains above 3200 region and moves past 3250 region, initially it could test 3350-3400 level and then it could move towards 3500 in coming trading sessions. If that is the case, then we could see sharp and strong broad based rally in individual stocks. Scrips like Satyam, Acc, Reliance, Tisco, and Telco would lead the rally. Stop for the Nifty longs is 3170.

On the other hand, if the region 3140 is violated in the downside, Nifty would move towards 3050 region. Even if it tests 3050 region, it could rebound from that level. Only below 3000 region, Nifty could turn weak further to go below its earlier low of 2896.


It Seems Nifty has bottomed out and has turned bullish. Initially, it could move towards 3500 level. After a short term correction of 300 points from that level, Nifty could move above 3500 level and it has possibility of testing 3800 in coming weeks.

Monday, May 29, 2006

TECHNICAL OUTLOOK

29, May
Nifty 3209.60


If Nifty sustains above 3200 region and moves past 3250 region, as previously mentioned, it could move towards 3350-3400 region.


On the other hand, if the region 3140 is violated in the downside, it could move towards 3050 region. Even if it tests 3050 region, it could rebound from that level. Only below 3000 region, Nifty could turn weak further to go below its earlier low of 2896.


If Acc sustains above 785 region, it could move towards 850. If reliance sustains above 940 region, it could move towards 1000.


The level 3000-3050 level is crucial for deciding whether a bottom was already formed or there is still some downside. As long as Nifty stays above 3000-3050 level, there is a strong possiblity of a bottom being formed.
If 2896 is the bottom, then we could see a strong rally towards 3650 region initially.

It seems that the overall trend in the Nifty continues to be bullish. Nifty has retraced around 25 percent from the high in percentage terms. Any percentage of retracement with in one third ( 33% ) retracement level is acceptable for a bull market correction.


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Sunday, May 28, 2006

MEDIUM TERM VIEW OF NIFTY

28, May

Click the image to enlarge it.




Normally, expanding triangles are completely retraced. In Nifty, expanding triangle started around 2000 region. If Market has to retrace completely, then it should retrace upto 2000 level. If market has to retrace the last leg of the expanding triangle, then it should retrace upto 2500 level. But, so far Nifty retraced upto 2896 level. When compared to other possible corrections, the present correction is a shallow one. Only if market is very strong and the upside is huge, we could see a shallow correction.

If that is the case, then we should not see a downside below 3000 level and also if the conceived pattern is validated, then we could see a huge rally in coming weeks and probably, the rally would be the fastest in this bull market and initially it should move above 3800.


The present view is validated, if and only if, Nifty stays above 3000 level. If that level is violated, then we could see correction extending towards 2500 level.

Saturday, May 27, 2006

REVIEW OF SELECT SCRIPS

Scrips like IPCL, CESC, Orchid chemicals, Reliance Energy, S kumars, Himachl, Prism cements were recommended for delivery. These scrips have come down below the stoploss levels. Some might have cut their exposures at stoploss levels and some may be holding these scrips.

The technical reason for the bullishness in these scrips is the formation of running triangle in the charts. The present correction has brought the scrips by one third or half of its value. Even after this correction, the scrips are well within the pattern and exhibit medium and long term bullish strength in the charts.

Those who have cut their exposures at stoploss levels can re-enter at current levels. Those who are holding these stocks can continue to hold. My long term view and the targets of this scrips haven’t changed. Below I have given the stoploss for the scrips for fresh long positions and for those who are holding these stocks.


For IPCL, the previous medium term high of 220 is the stop.
The one third retracement level of 240 is the stop for CESC.
The previous medium term high of 200 is the stop for orchid chemicals.
The level 28 is the stop for both prism cements and Himachl.
The recent low of 47 is the stop for S Kumars.

The previous low of 450 is the stop for Reliance Energy.

Friday, May 26, 2006

TECHNICAL OUTLOOK

26, May
Nifty 3177.70

If Nifty sustains above 3110 region and moves past 3180 region, as previously mentioned, it could move towards 3350-3400 region sharply.

On the other hand, if the region 3110 is violated in the downside, it could move towards 3050 region. Even if it tests 3050 region, it could rebound from that level. Only below 3000 region, Nifty could turn weak further to go below its earlier low of 2896.


The level 3000-3050 level is crucial for deciding whether a bottom was already formed or there is still some downside. As long as Nifty stays above 3000-3050 level, there is a strong possiblity of a bottom being formed. If 2896 is the bottom, then we could see a strong rally towards 3650 region initially.

It seems that the overall trend in the Nifty continues to be bullish. Nifty has retraced around 25 percent from the high in percentage terms. Any percentage of retracement with in one third ( 33% ) retracement level is acceptable for a bull market correction.

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Thursday, May 25, 2006

TECHNICAL OUTLOOK

25, May
Nifty 3115.55

If Nifty sustains above 3050 level and rebounds quickly towards 3180 region, it has possibility of testing 3350-3400 level in one or two trading sessions.

On the other hand, if the region 3050 is violated in the downside, it could move towards 3000 region. Even this level is not held, we could see a sharp fall towards it previous low of 2896. Below this low we can expect atleast another 150 points fall. Be alert, if Nifty moves below 3050 region.

The level 3000-3050 level is crucial for deciding whether a bottom was already formed or there is still some downside.


It seems that the overall trend in the Nifty continues to be bullish. Nifty has retraced around 25 percent from the high in percentage terms. Any percentage of retracement with in one third ( 33% ) retracement level is acceptable for a bull market correction.

Wednesday, May 24, 2006

TECHNICAL OUTLOOK

24, May
Nifty 3199.35

If Nifty sustains above 3120 level, it has possibility of testing 3350-3400 level in one or two trading sessions. If Nifty moves in expected lines, then we could see sharp rally in many frontline counters. Buying Call options could fetch good profits. Futures positions can be hedged using options as the swing is going to be wide in any case.

If the region 3120 is violated in the downside, we could see a range bound trade or a sharp decline towards 2900 level. An early indication of weakness comes if Nifty trades below 3050.

It seems that the overall trend in the Nifty continues to be bullish. Nifty has retraced around 25 percent from the high in percentage terms. Any percentage of retracement with in one third ( 33% ) retracement level is acceptable for a bull market correction.

Tuesday, May 23, 2006

TECHNICAL OUTLOOK

23, May
Nifty 3081.35

Yesterday, I mentioned that 3050 region is the tip of the running triangle. On previous day Nifty closed at 3081.35 and it is well above 3050 level. It seems that a bottom is formed, provided Nifty doesn’t go below 3000 in coming trading sessions. For today’s trading, if the region 3000 is not violated, we could see a rally towards 3300 region initially. If that is the case, then we could see strong rally in frontline counters.

On the other hand, if Nifty moves below 3000 level, it could move below its previous low of 2896 and it could test 2800 level.

It seems that the overall trend in the Nifty continues to be bullish. Nifty has retraced around 25 percent from the high in percentage terms. Any percentage of retracement with in one third ( 33% ) retracement level is acceptable for a bull market correction.

Monday, May 22, 2006

TECHNICAL OUTLOOK

22, May
Nifty 3246.90


Normally, Bull market correction in index correct upto 15 percent from the high in percentage terms. For Nifty, it works out to 567 points and it gives a target of 3210. Technically, Market would bottom out near the high of the previous wave. Here a wave pattern completes its high around 3200. If that is the case, then Nifty would move towards 3500 region initially. A move above 3320 would confirm the rally towards 3500.



On the other hand, if Nifty violates 3200 region, then Nifty could move towards 3050 region which is the tip of a running triangle. An early sign of weakness comes if Nifty trades below 3250.


If both the levels 3200 and 3050 are not held, then correction could extend further.

Friday, May 19, 2006

19, May
Nifty 3388.90

If the level 3340 is not breached, Nifty could bounce back from current levels and move above it’s previous top of 3642 in two or three trading sessions. Even if it moves above 3642 in coming trading sessions, another drastic fall from there towards 3425 is possible.

Instead, if it breaches 3340 level, then Nifty could slide towards 3290 region. Even this level is violated, We could see further drastic fall towards 3050 region in coming trading sessions. Exit your long positions if 3340 is breached.

Only a move below 3290 would confirm further downside. Otherwise, there is a possibility of sharp bounce back.

In the Medium term, if Nifty moves below 3290 region, the bullish view on Nifty for the time being is negated. But, as long as Nifty stays above 3290, the bullish view on Nifty remains valid.

Thursday, May 18, 2006

STOP FOR THE LONGS 3560

18, May
Nifty 3635.10

In this type of fast retracement of expanding patterns, the top of present rally from the low of 3382 could fall short of previous high of 3777 or it could even move past the previous high, which means a minor correction can be expected at 3700 – 3777 region or around 3800.


Instead, if it retraces back from current level, the level 3560 should not be violated for Nifty to move up. If it breaches 3560 level, then it could move below further to test 3425 region.

As long as Nifty stays above 3340 level, the outlook remains positive for the Market. Below this level, the perceived technical picture has to be reworked.


The medium term technical picture suggests that Nifty could rally above 4200 region in a short span of time.


The views and targets of select scrips which were recommended for investment remains same. But if it trades below the stoploss level, cut positions below the stop and re-enter above the stoploss level, when it moves up.

Wednesday, May 17, 2006

17, May
Nifty 3523.13

Today, If Nifty moves above 3570 region and sustains above this level, it would indicate that the bottom is formed. And further upside potential is possible.

If that is the case, then Nifty could move towards 3700 level comfortably in two or three trading sessions. And a correction can be expected around this region.



Instead, if it couldn’t manage to stay above 3570 region, and if it moves below 3480 region, then further downside towards 3400 is possible. Even in this case, Nifty could bounce back, unless 3340 is breached.

As long as Nifty stays above 3340 level, the outlook remains postive for the Market. Below this level, the perceived technical picture has to be reworked.



The medium term technical picture suggests that Nifty could rally above 4200 region in a short span of time.

The views and targets of select scrips which were recommended for investment remains same. But if it trades below the stoploss level, cut positions below the stop and re-enter above the stoploss level, when it moves up.

Tuesday, May 16, 2006

THE UPTREND IS STILL INTACT

16, May
Nifty 3502.95

Contrary to my expectation, Nifty continously moved below 3590 region and even violated the 3550 level which I have given as important for the Nifty to stay bullish.

Going by the price pattern, that unfolded below 3590 level shows that the uptrend in Nifty is still intact. Now, It seems that the present downside is correcting the previous rally from the panic low of 3340. Nifty rallied 430 points from the low. In this type of retracement, the correction can have a depth of 50 percent to 90 percent of the previous rally. This works out to 210 points to 390 points. With already Nifty down by 277 points, the downside potential seems very limited.

After the panic low of 3342 made on 28th of last month, Nifty consolidated around 3425 to 3450 region, and moved towards its all time high of 3777. So, the possibility of Nifty bouncing from 3425 – 3450 levels is very high. Nifty could swing between 3530 and 3450 region for another two trading sessions before moving above 3570 region.

A move above 3570 would confirm the bottom, and in coming trading sessions, If Nifty behaves in expected lines, it could move towards it previous high of 3777 in few trading sessions.

Yesterday’s downmove doesn’t alter My previous view of Nifty forming a big base for a strong rally towards 4200.

Monday, May 15, 2006

NIFTY IS ABOUT TO BOTTOM OUT

15, May
Nifty 3650.50

Today, If Nifty doesn’t violate 3634 level it could quickly rebound from that level and a cross-over above 3675 region would confirm the bottom.

If it moves below 3634 level quickly in the morning itself, then Nifty could bottom out around 3590-3610 levels. If that is the case, then the stop can be kept at 3570. A move above 3675 would confirm the bottom.

Once Nifty bottoms out, it could move towards 3710 region initially, in one or two trading sessions.

Nifty is forming a bullish triangle pattern, and at present, Nifty is well within the pattern and it is about to break out in the upside in coming trading sessions. Only if Nifty moves below 3550 region, the bullish view on Nifty would get negated. So, until such time, the lower levels can be used to initiate long positions.


As previously mentioned, Nifty is about to explode in the upside in coming trading sessions and it could test 4200 region in a very short span of time.

Friday, May 12, 2006

ENTER AT LOWER LEVELS

12, May
Nifty 3701.05


Today, If Nifty doesn’t violate 3655 level it could quickly rebound from lower levels and a cross-over above 3730 region would confirm the bottom.

If it moves below 3655 level quickly in the morning itself, then Nifty could bottom out around 3590-3610 levels.

In any case the trend in Nifty continues to be bullish, and we could see a quick rebound from any of these levels and in coming trading sessions Nifty could move above 3800.

The stop for the longs in VSNL is 478.

Nifty is forming a bullish triangle pattern, and at present, Nifty is well within the pattern and it is about to break out in the upside in coming trading sessions. Only if Nifty moves below 3520 region, the bullish view on Nifty would get negated. So, unless 3520 is broken, the lower levels can be used to initiate long positions.

As previously mentioned, Nifty is about explode in the upside in coming trading sessions and it could test 4200 region in a very short span of time.

Thursday, May 11, 2006

HOLD YOUR LONGS, STOP 3730

11, May
Nifty 3754.25


Today, Nifty could move towards 3780-3800 region sharply as mentioned earlier. However, if it moves below 3730 region, it has potential of testing 3700 region. The stop for the longs is 3730.

If the level 965 is not violated in the downside, Acc has potential of testing 1030 region in coming trading sessions.

Majority of individual stocks are about to rally sharply in coming trading sessions.


Nifty is about explode in the upside in coming trading sessions and it could test 4200 region in a very short span of time.

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Wednesday, May 10, 2006

NIFTY HEADING TOWARDS 3800.

10, May
Nifty 3720.55

It seems Nifty is about to test 3800 region in one or two trading sessions. The rally would be sharp. Fresh long positions can be initiated at current levels. The stop for the view is 3680.

VSNL has potential of moving towards 550 region shortly.

As I have previously mentioned on the post dated 05 May, the counters like Infosys, Tata Motors, Bharti and etc are all on the verge of bullish breakout.

Majority of the individual stocks are ready for a strong rally.

Nifty is about explode in the upside in coming trading sessions and it could test 4200 region in a very short span of time.

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Tuesday, May 09, 2006

HOLD YOUR LONGS, STOP 3680

09, May
Nifty 3693.15

Now, Nifty has potential of testing 3750 region today. A small correction is possible from there. The stop for the longs is 3680. In one or two trading sessions, the rally would pick up momentum and the upside moves will be quicker than now.

Majority of the individual stocks are ready for a strong rally.

Nifty is forming a big base for a strong rally and it has potential of moving towards 4200 in a very short span of time.

Monday, May 08, 2006

INITIATE FRESH LONG POSITIONS, STOP 3640

08, May
Nifty 3663.95


Nifty seems to be heading towards3700 region today. And it could hover around this region for some time before moving towards 3750 region. Fresh long positions can be initiated at current levels. The stop for the view is 3640 for today.

Majority of the individual stocks are ready for a strong rally.


Nifty is forming a big base for a strong rally and it has potential of moving towards 4200 in a very short span of time.

Saturday, May 06, 2006

SHORT TERM INVESTMENT PICKS

06, MAY

The technical picture of mid-cap companies show they are about to explode in the upside in coming weeks. Here, I am presenting some short term investment picks. Though the list of the scrips is very high, I am presenting my view on some scrips.

S kumars is looking attractive at current levels, and it has potential of testing 90 levels in coming weeks. The stop can be kept at 53.

Himachal Futuristics is looking bullish at current levels and it has potential of doubling from current levels in coming weeks. The stop can be kept at 39.


Prism cement has potential of testing 65-70 region in coming weeks. The stop can be kept at 36.

Friday, May 05, 2006

ENTER AT LOWER LEVELS

05, May
Nifty 3648.40


If Nifty stays above 3620, it would move above 3670 region. If 3620 is violated, then it has possibility of testing 3580.The stop for the longs is 3620.

Counters like Infosys, Telco, and Bharti are on the verge of bullish breakout.

Nifty is forming a big base for a strong rally and it has potential of moving towards 4000 in a very short span of time.

Thursday, May 04, 2006

STOP FOR THE LONGS 3610

04, May
Nifty 3634.25


Nifty has potential of testing 3650- 3670 region. But, a correction is possible from this region. Initially it could test 3580.

The stop for the longs is 3610. On contrary, if it continuously moves above 3670 region, hold your positions with a close stoploss.


But, as I have said earlier, Nifty is forming a big base for a strong rally in coming trading sessions and it has potential of moving towards 4000 in a very short span of time.

Wednesday, May 03, 2006

CUT EXPOSURES AROUND 3650

03, May
Nifty 3605.45



Now, Nifty has potential of testing 3650 region shortly. But it seems Nifty could see a correction from that levels. Initially, it could test 3580 region. If this region is violated, then it could bottom out between 3520 and 3550.

The stop for the longs for time being is 3580. It is better to cut exposures around 3650. On contrary, if it continuously moves above 3650 region, hold your positions with a close stoploss.

But, as I have said earlier, Nifty is forming a big base for a strong rally in coming trading sessions and it has potential of moving towards 4000 in a very short span of time.

Since Nifty is forming a large bullish triangle pattern, the legs are more violent in both the sides but as time passes, within the pattern the volatility will reduce. So, the violent moves like the one we have seen during this week would not happen in coming trading sessions.

Tuesday, May 02, 2006

HOLD YOUR LONGS, STOP 3525

02, May
Nifty 3557.60



Since Nifty is forming a large bullish triangle pattern, the legs are more violent in both the sides but as time passes, within the pattern the volatility will reduce. So, the violent moves like the one we have seen during this week would not happen in coming trading sessions.


Now Nifty has potential of testing 3600 region and after a brief consolidation around this region, it could move towards 3630 region. The stop for the longs is 3525.