Friday, June 30, 2006

TECHNICAL OUTLOOK - 30, JUNE

Nifty 2997.90

It seems Nifty is likely to test 3100 initially and it could test 3300 region in coming trading sessions. The stop for the view is 2940.

On the other hand, if Nifty violates 2940 level, then it is likely to test 2860.

SBI seems to be near its bottom and it could bounce from current levels to test 800 in few trading sessions. One can enter this scrip around 700 level with a stop at 685. Follow the stoploss strictly or hedge the futures positions using 700 Put option.

For the past few weeks, I have been mentioning that the maximum possible downside potential is limited to 2500 level for Nifty. If market doesn’t violate this level here after, the long term bullish trend will remain intact. Correction extending beyond this level is highly suspectable and we have to rework the long term charts.


The post correction scenario has two possibilities. One possibility is, Nifty is likely to move towards its all time high in a slow manner and if this is the case, then it may take 6 months to 1 year to cross the all time high. The other view is, Nifty is likely to move towards its previous high without any major downside correction and in this case, Nifty is likely to cross the all time high before the month of August 2006. If Market moves in expected lines, then once again we are likely to see a strong bull market in coming months.

Thursday, June 29, 2006

TECHNICAL OUTLOOK - 29, JUNE

Nifty 2981.10

Today, if Nifty doesn’t violate 2940 in the downside and moves above 3000 and sustains above that level, then Nifty is likely to see a sharp upmove towards 3100 initially and then the level 3300 will be tested in coming trading sessions.

On the other hand, if Nifty violates 2940 level, then it is likely to test 2860.


For the past few weeks, I have been mentioning that the maximum possible downside potential is limited to 2500 level for Nifty. If market doesn’t violate this level here after, the long term bullish trend will remain intact. Correction extending beyond this level is highly suspectable and we have to rework the long term charts.

The post correction scenario has two possibilities. One possibility is, Nifty is likely to move towards its all time high in a slow manner and if this is the case, then it may take 6 months to 1 year to cross the all time high. The other view is, Nifty is likely to move towards its previous high without any major downside correction and in this case, Nifty is likely to cross the all time high before the month of August 2006. If Market moves in expected lines, then once again we are likely to see a strong bull market in coming months.


Wednesday, June 28, 2006

TECHNICAL OUTLOOK - 28, JUNE

28, JUNE
Nifty 2982.45


The last upmove has cleared 2950 and tested 3083 in the upper side and this indicates strength of the last upmove. Now, any downmove would be correcting the recent rally from the low of 2595.

Today, if Nifty doesn’t violate 2900 in the downside and moves above 3000 and sustains above that level, then Nifty is likely to see a sharp upmove towards 3100 initially and then the level 3300 will be tested in coming trading sessions.

On the other hand, if Nifty violates 2900 level, then it is likely to bounce from 2860. Only below 2840 level, Nifty could turn weak further to test 2750 region.


For the past few weeks, I have been mentioning that the maximum possible downside potential is limited to 2500 level for Nifty. If market doesn’t violate this level here after, the long term bullish trend will remain intact. Correction extending beyond this level is highly suspectable and we have to rework the long term charts.

The post correction scenario has two possibilities. One possibility is, Nifty is likely to move towards its all time high in a slow manner and if this is the case, then it may take 6 months to 1 year to cross the all time high. The other view is, Nifty is likely to move towards its previous high without any major downside correction and in this case, Nifty is likely to cross the all time high before the month of August 2006. If Market moves in expected lines, then once again we are likely to see a strong bull market in coming months.

Tuesday, June 27, 2006

TECHNICAL OUTLOOK - 27, JUNE

27, JUNE
Nifty 2943.20


The last upmove has cleared 2950 and tested 3083 in the upper side and this indicates strength of the last upmove. Now, any downmove would be correcting the recent rally from the low of 2595.

One possiblility is, Nifty is likely to terminate its correction anywhere between 2860 and 2920 region. The other possibility is, Nifty could test 2750 sharply. If this is the case, then Nifty could violate 2840 today itself and the fall would be drastic.

Though, Nifty has possibility of correcting upto 2750 region, once the correction is over, Nifty is likely to resume its uptrend.


For the past few weeks, I have been mentioning that the maximum possible downside potential is limited to 2500 level for Nifty. If market doesn’t violate this level here after, the long term bullish trend will remain intact. Correction extending beyond this level is highly suspectable and we have to rework the long term charts.

The post correction scenario has two possibilities. One possibility is, Nifty is likely to move towards its all time high in a slow manner and if this is the case, then it may take 6 months to 1 year to cross the all time high. The other view is, Nifty is likely to move towards its previous high without any major downside correction and in this case, Nifty is likely to cross the all time high before the month of August 2006. If Market moves in expected lines, then once again we are likely to see a strong bull market in coming months.


Monday, June 26, 2006

TECHNICAL OUTLOOK - 26, JUNE

26, JUNE
Nifty 3050.30


It seems Nifty is heading towards 3150-3200 region. Around this region, Nifty could see a sideways or a downside correction. A move towards this level would indicate further bullishness in coming tradings sessions. The stop for the longs is 2990.


If the level 2840 is not violated here after, then the low 2595 can be taken as bottom for this medium term correction and also Nifty should move above 3300 region in few trading sessions for further confirmation. If it fails to do so, then Nifty is likely to re-test its previous low of 2595.


For the past few weeks, I have been mentioning that the maximum possible downside potential is limited to 2500 level for Nifty. If market doesn’t violate this level here after, the long term bullish trend will remain intact. Correction extending beyond this level is highly suspectable and we have to rework the long term charts.


The post correction scenario has two possibilities. One possibility is, Nifty is likely to move towards its all time high in a slow manner and if this is the case, then it may take 6 months to 1 year to cross the all time high. The other view is, Nifty is likely to move towards its previous high without any major downside correction and in this case, Nifty is likely to cross the all time high before the month of August 2006. If Market moves in expected lines, then once again we are likely to see a strong bull market in coming months.


asksathia@hotmail.com




Sunday, June 25, 2006

TECHNICAL OUTLOOK - 25, JUNE

25, JUNE
Nifty 3042.70


It seems Nifty is heading towards 3150-3200 region. Around this region, Nifty could see a sideways or a downside correction. A move towards this level would indicate further bullishness in coming tradings sessions. The stop for the longs is 2990.


For the past few weeks, I have been mentioning that the maximum possible downside potential is limited to 2500 level for Nifty. If market doesn’t violate this level here after, the long term bullish trend will remain intact. Correction extending beyond this level is highly suspectable and we have to rework the long term charts.


The post correction scenario has two possibilities. One possibility is, Nifty likely to move towards its all time high in a slow manner and if this is the case, then it may take 6 months to 1 year to cross the all time high. The other view is, Nifty is likely to move towards its previous high without any major downside correction and in this case, Nifty is likely to cross the all time high before the month of August 2006. If Market moves in expected lines, then once again we are likely to see a strong bull market in coming months.

Friday, June 23, 2006

TECHNICAL OUTLOOK - 23, JUNE

23, JUNE
Nifty 2994.75


If Nifty manages to stay above 2920 region and rebounds from lower level sharply and if it moves above 3020 level, then the next target of 3100 will be achieved shortly. And also it would confirm further upside in coming trading sessions. The stop for the longs is 2920.


Though Nifty has moved above 2950 level comfortably, it should sustain above 2920 region and it should resume its upmove above 3020 immediately to confirm the low. And also, a move below 2840 would invite further downside. So, follow the stoploss level strictly.


For the past few weeks, I have been mentioning that the maximum possible downside potential is limited to 2500 level for Nifty. If market doesn’t violate this level here after, the long term bullish trend will remain intact. Correction extending beyond this level is highly suspectable and we have to rework the long term charts.

Now, if Nifty sustains above 2950 level, then we can confirm the bottom at 2595. Instead, if there is going to be a correction for the recent rally from the low of 2595, then Nifty should not violate 2595 level to confirm the bottom.

The post correction scenario has two possibilities. One possibility is, Nifty likely to move towards its all time high in a slow manner and if this is the case, then it may take 6 months to 1 year to cross the all time high. The other view is, Nifty is likely to move towards its previous high without any major downside correction and in this case, Nifty is likely to cross the all time high before the month of August 2006. If Market moves in expected lines, then once again we are likely to see a strong bull market in coming months.

Thursday, June 22, 2006

TECHNICAL OUTLOOK - 22, JUNE

22, JUNE
Nifty 2923.45


If Nifty doesn’t come below 2840 level hereafter, then the pattern in formation is a more bullish one. In that case, Nifty is likely to cross 2950 level imediately and it would sustain above that level and as previously mentioned it is likely to move towards 3050-3100 level initially and above 3100 level further higher targets are in store.

On the other hand, if it fails to cross and sustain above 2950 level, then Nifty has a wide range to terminate the correction. In this case, the correction could terminate anywhere between 2840 and 2600.

Today, if the level 2875 is not violated, and if Nifty moves above 2950 sharply and sustains above that level, then it is likely to move towards 3050-3100 level. The stop for the longs is 2875. If it crosses 2950 level, then the stop can be kept at 2905.


For the past few weeks, I have been mentioning that the maximum possible downside potential is limited to 2500 level for Nifty. If market doesn’t violate this level here after, the long term bullish trend will remain intact. Correction extending beyond this level is highly suspectable and we have to rework the long term charts.

Now, if Nifty moves above 2950 and sustains above that level, then we can confirm the bottom at 2595. Instead, if there is going to be a correction for the recent rally from the low of 2595, then Nifty should not violate 2595 level to confirm the bottom.

The post correction scenario has two possibilities. One possibility is, Nifty likely to move towards its all time high in a slow manner and if this is the case, then it may take 6 months to 1 year to cross the all time high. The other view is, Nifty is likely to move towards its previous high without any major downside correction and in this case, Nifty is likely to cross the all time high before the month of August 2006. If Market moves in expected lines, then once again we are likely to see a strong bull market in coming months.

Wednesday, June 21, 2006

TECHNICAL OUTLOOK - 21, JUNE

21, JUNE
Nifty 2861.30


Today,if Nifty moves below 2810 region, then correction could extend towards 2750 and it would take 3 to 4 days to complete the correction. If that is the case, then Nifty is likely to swing between 2850 and 2750 in coming trading sessions.

On the other hand, if Nifty manages to stay above 2840 level, then it would resume its upmove towards 2950 region.

For the past few weeks, I have been mentioning that the maximum possible downside potential is limited to 2500 level for Nifty. If market doesn’t violate this level here after, the long term bullish trend will remain intact. Correction extending beyond this level is highly suspectable and we have to rework the long term charts.

Now, if Nifty moves above 2950 and sustains above that level, then we can confirm the bottom at 2595. Instead, if there is going to be a correction for the recent rally from the low of 2595, then Nifty should not violate 2595 level to confirm the bottom.

The post correction scenario has two possibilities. One possibility is, Nifty likely to move towards its all time high in a slow manner and if this is the case, then it may take 6 months to 1 year to cross the all time high. The other view is, Nifty is likely to move towards its previous high without any major downside correction and in this case, Nifty is likely to cross the all time high before the month of August 2006. If Market moves in expected lines, then once again we are likely to see a strong bull market in coming months.

Tuesday, June 20, 2006

TECHNICAL OUTLOOK - 20, JUNE

20, JUNE
Nifty 2916.90


Today,if Nifty moves above 2950 region and sustains above this level, then it is likely to test 3050-3100 levels shortly. On the other hand, if it fails to clear 2950 region and moves below 2850 level, then it is likely to test 2750 region. The stop for the longs is 2850.

For the past few weeks, I have been mentioning that the maximum possible downside potential is limited to 2500 level for Nifty. If market doesn’t violate this level here after, the long term bullish trend will remain intact. Correction extending beyond this level is highly suspectable and we have to rework the long term charts.

Now, if Nifty moves above 2950 and sustains above that level, then we can confirm the bottom at 2595. Instead, if there is going to be a correction for the recent rally from the low of 2595, then Nifty should not violate 2595 level to confirm the bottom.

The post correction scenario has two possibilities. One possibility is, Nifty likely to move towards its all time high in a slow manner and if this is the case, then it may take 6 months to 1 year to cross the all time high. The other view is, Nifty is likely to move towards its previous high without any major downside correction and in this case, Nifty is likely to cross the all time high before the month of August 2006. If Market moves in expected lines, then once again we are likely to see a strong bull market in coming months.

Monday, June 19, 2006

TECHNICAL OUTLOOK - 19, JUNE

19, JUNE
Nifty 2890.35


Today, if Nifty stays above 2850 level and if it once again moves above 2950, then Nifty is likely to test 3050-3100 level shortly, from where a minor correction can be expected. A move above 2950 would confirm the bottom at 2595. Instead, if the level 2850 is violated, then it is likely to test 2750 region.

Previously it was mentioned that Nifty was in the last leg of this correction and in the worst case it could test 2500 level and also it was mentioned the Nifty would bounce back around 2500 levels and in the upside it could test 3100 levels in coming trading sessions.


Nifty has corrected more than 1000 points in a short span of time. These type of corrections usually occur during bull market where some upside moves are running corrections. Only running corrections would be corrected in the downside in a short span of time. Once the correction is over, it would resume its bull trend.


The post correction scenario has two possibilities. One possibility is, Nifty likely to move towards its all time high in a slow manner and if this is the case, then it may take 6 months to 1 year to cross the all time high. The other view is, Nifty is likely to move towards its previous high without any major downside correction and in this case, Nifty is likely to cross the all time high before the month of August 2006. If Market moves in expected lines, then once again we are likely to see a strong bull market in coming months.

If correction terminates within 2500 level, the uptrend in Market will be still intact. Correction extending beyond this level is highly suspectable and then we have to rework the long term charts and also recovery will take months. Investors can re-enter the market with keeping 2300 as broad stoploss in the long term.

Friday, June 16, 2006

TECHNICAL OUTLOOK - 16, JUNE

16, JUNE
Nifty 2632.80


Nifty bounced as expected and now, if Nifty move towards 2950 sharply and sustains above this level, then the next upside target of 3100 is likely to be tested in coming trading sessions and the bottom would be confirmed at 2595. On the other hand, if it fails to cross 2950 region or it fails to sustain above 2950, then Nifty is likely to see a final panic sell off. Today, the stop for the longs is 2750.

Previously it was mentioned that Nifty was in the last leg of this correction and in the worst case it could test 2500 level and also it was mentioned the Nifty would bounce back around 2500 levels and in the upside it could test 3100 levels in coming trading sessions.


Nifty has corrected more than 1000 points in a short span of time. These type of corrections usually occur during bull market where some upside moves are running corrections. Only running corrections would be corrected in the downside in a short span of time.


The post correction scenario has two possibilities. One possibility is, Nifty likely to move towards its all time high in a slow manner and if this is the case, then it may take 6 months to 1 year to cross the all time high. The other view is, Nifty is likely to move towards its previous high without any major downside correction and in this case, Nifty is likely to cross the all time high within 3 to 4 months. If Market moves in expected lines, then once again we are likely to see a strong bull market in coming months.

If correction terminates within the levels I have mentioned, the uptrend in Market will be still intact. Correction extending beyond this level is highly suspectable and then we have to rework the long term charts and also recovery will take months. Investors can re-enter the market with keeping 2300 as broad stoploss in the long term.

Thursday, June 15, 2006

TECHNICAL OUTLOOK - 15, JUNE

15, JUNE
Nifty 2632.80

The view remains the same. Previously it was mentioned that Nifty was in the last leg of this correction and in the worst case it could test 2500 level. Now, Nifty is closer to that level and it seems that Nifty is likely to bounce any time strongly from 2500 levels and in the upside it could test 3100 levels in coming trading sessions.


Nifty has corrected more than 1000 points in a short span of time. These type of corrections usually occur during bull market where some upside moves are running corrections. Only running corrections would be corrected in the downside in a short span of time.


The post correction scenario has two possibilities. One possibility is, Nifty likely to move towards its all time high in a slow manner and if this is the case, then it may take 6 months to 1 year to cross the all time high. The other view is, Nifty is likely to move towards its previous high without any major downside correction and in this case, Nifty is likely to cross the all time high within 3 to 4 months. If Market moves in expected lines, then once again we are likely to see a strong bull market in coming months.


If correction terminates within the levels I have mentioned, the uptrend in Market will be still intact. Correction extending beyond this level is highly suspectable and then we have to rework the long term charts and also recovery will take months. Investors can re-enter the market with keeping 2300 as broad stoploss in the long term.


Today, if Nifty manages to stay above 2720 region, further upside is possible. Below 2600, Nifty is likely to test 2516 level.

Wednesday, June 14, 2006

TECHNICAL OUTLOOK - 14, JUNE

14, JUNE
Nifty 2663.30


Previously it was mentioned that Nifty was in the last leg of this correction and in the worst case it could test 2500 level. Now, Nifty is closer to that level and it seems that Nifty is likely to bounce any time strongly from 2500 – 2650 levels and in the upside it could test 3100 levels in coming trading sessions.


Nifty has corrected more than 1000 points in a short span of time. These type of corrections usually occur during bull market where some upside moves are running corrections. Only running corrections would be corrected in the downside in a short span of time.

The post correction scenario has two possibilities. One possibility is, Nifty likely to move towards its all time high in a slow manner and if this is the case, then it may take 6 months to 1 year to cross the all time high. The other view is, Nifty is likely to move towards its previous high without any major downside correction and in this case, Nifty is likely to cross the all time high within 3 to 4 months. If Market moves in expected lines, then once again we are likely to see a strong bull market in coming months.


If correction terminates within the levels I have mentioned, the uptrend in Market will be still intact. Correction extending beyond this level is highly suspectable and then we have to rework the long term charts and also recovery will take months. Investors can re-enter the market with keeping 2300 as broad stoploss in the long term.


Today, if Nifty manages to stay above 2640 region, a strong rally is possible. Below 2640, Nifty is likely to rule weak.

Tuesday, June 13, 2006

TECHNICAL OUTLOOK - 13, JUNE

13, JUNE
Nifty 2776.85

Today, if Nifty manages to stay above 2700 level, it is likely to bounce back. If the low 2683 is violated then further weakness towards 2500 region is possible.

Nifty has corrected more than 1000 points in a short span of time. These type of corrections usually occur during bull market where corrections are of running in nature. Only running corrections would be corrected in the downside in a short span of time. Once the correction is over, the market is likely to develop a upside running triangle whose tip would fall outside the previous all time high. If this is the case, then once again we are likely to see a strong bull market in coming months.

Since Nifty is in the last leg of this correction, the last possible scenario is being that Nifty could bottom out around double the length of the previous rally in the downside. Here Nifty moved up 380 points. So, Nifty is likely to bottom out around 380 points below 2896 and it works out to 2516.

The previous intermediate top of Nifty was 2668.85 and it formed on 5th of October 2005. And also downside correction normally terminate around previous tops. So, a bottom might have already formed at 2683 or it is likely to bottom out around 2500 region.

If correction terminates within the levels I have mentioned, the uptrend in Market will be still intact. Correction extending beyond this level is highly suspectable and then we have to rework the long term charts and also recovery will take months.

Monday, June 12, 2006

TECHNICAL OUTLOOK - 12, JUNE

12, JUNE
Nifty 2866.30

Today, if Nifty moves above 2920 level and if it sustains above this level, then Nifty is likely to move towards 3100 region in few trading sessions, or if it fails to clear 2920 region, then it would turn weak. If the low 2683 is violated, then Nifty would lose another 150 points.

Nifty has corrected more than 1000 points in a short span of time. These type of corrections usually occur during bull market where corrections are of running in nature. Only running corrections would be corrected in the downside in a short span of time. Once the correction is over, the market is likely to develop a upside running triangle whose tip would fall outside the previous all time high. If this is the case, then once again we are likely to see a strong bull market in coming months for Indian Stock Market.

For the past few days, I have been mentioning that the trading pattern for the past few trading sessions suggested that Nifty was in the last leg of this correction and the possible range for the last leg to get completed was quite wide.

The last possible scenario is being that Nifty could bottom out around double the length of the previous rally in the downside. Here Nifty moved up 380 points. So, Nifty is likely to bottom out around 380 points below 2896 and it works out to 2516.

The previous intermediate top of Nifty was 2668.85 and it formed on 5th of October 2005. And also downside correction normally terminate around previous tops. So, a bottom might have already formed at 2683 or it is likely to bottom out around 2516 region.


If correction terminates within the levels I have mentioned, the uptrend in Market will be still intact. Correction extending beyond this level is highly suspectable and then we have to rework the long term charts and also recovery will take months.

Friday, June 09, 2006

TECHNICAL OUTLOOK - 09, JUNE

09, JUNE
Nifty 2724.35

For the past few days, I have been mentioning that the trading pattern for the past few trading sessions suggested that Nifty was in the last leg of this correction and the possible range for the last leg to get completed was quite wide.

The last possible scenario is being that Nifty could bottom out around double the length of the previous rally in the downside. Here Nifty moved up 380 points. So, Nifty is likely to bottom out around 380 points below 2896 and it works out to 2516.

The previous intermediate top of Nifty was 2668.85 and it formed on 5th of October 2005. Downside correction normally terminate around previous tops. So, a bottom might have already formed around yesterday’s low of 2683 or it is likely to bottom out around 2516 region.

If this is the case, then correction might have completed or it could form within few trading sessions within another 200 points in the downside.

If correction terminates within the levels I have mentioned, the uptrend in Market will be still intact. Correction extending beyond this level is highly suspectable and then we have to rework the long term charts and also recovery will take months.

Today, if yesterday’s low of 2683 is held, then Nifty is likely to move up. If not, further downside towards 2516 is the possibility.

Thursday, June 08, 2006

TECHNICAL OUTLOOK - 08, JUNE

08, JUNE
Nifty 2860.45

The trading pattern for the past few trading sessions suggests that Nifty is in the last leg of this correction. Now the possible range for the last leg to get completed is quite wide. In some cases, if the market is strong, it will not go below its previous low and here it should not go below 2896. But the low was violated yesterday.

In some cases, a new low will be formed within few points below the previous low. In this case, Nifty could form a bottom around 2850. Yesterday, it tested 2820 level. In some cases, the low is formed at double the length of the previous rally. Here the previous rally moved up 380 points and another 380 points fall below the low of 2896 is the maximum possible correction.

And also a contracting downside triangle is forming in the Nifty and in individual stocks. Contracting triangles break out sharply in either side according to the type.Here, the breadth of the triangle is 400 points. So, Nifty is likely to loose or gain atleast 400 points in a shorter period of time.

Technically the triangle seems to be bullish, simply because yesterday it did not go further down even after violating 2850 level. If it is about to break out in the downside, then it should do today in the morning itself. The initial indication of weakness comes if it trades below 2820 region. If not, Nifty is likely to move up.

However, it is better to wait and watch till a clear picture emerges from todays trading.

Wednesday, June 07, 2006

TECHNICAL OUTLOOK - 07, JUNE

07, JUNE
Nifty 2937.30


The view remains the same. The trading pattern for the past few trading sessions suggests that Nifty is in the last leg of this correction. Now the possible range for the last leg to get completed is quite wide. In some cases, if the market is strong, it will not go below its previous low and here it should not go below 2896. In some cases, a new low will be formed within few points below the previous low. In this case, Nifty could form a bottom around 2850. In some cases, the low is formed at double the length of the previous rally. Here the previous rally moved up 380 points and another 380 points fall below the low of 2896 is the maximum possible correction.



The level 2850 and todays trading pattern would decide the direction, and extent of the correction. Since a downside triangle is forming, break out from the pattern in either way is possible.

Tuesday, June 06, 2006

TECHNICAL OUTLOOK - 06, JUNE

06, JUNE
Nifty 3016.65


The trading pattern for the past few trading sessions suggests that Nifty is in the last leg of this correction. Now the possible range for the last leg to get completed is quite wide. In some cases, if the market is strong, it will not go below its previous low and here it should not go below 2896. In some cases, a new low will be formed within few points below the previous low. In this case, Nifty could form a bottom around 2850. In some cases, the low is formed at double the length of the previous rally. Here the previous rally moved up 380 points and another 380 points fall below the low of 2896 is the maximum possible correction.

With almost all the individual stocks already retraced by 33 percent, a drastic extended downside fall in Nifty seems unlikely. Chances of Nifty holding the bottom of 2896 is the most likely scenario.

On the other hand, if the region 2896 is violated, then there is a strong possibility of Nifty bouncing back around 2850 region.

Today, if Nifty manages to stay above 3000 level, it is likely to bounce from current levels and a move above 3130 region would confirm further upside in coming trading sessions. If this is the case, then market is likely to slowly move up initially and then it would pick up momentum in the upside.


Instead, if 3000 and then 2960 levels are violated, then the low of 2896 can be violated. If this is the case, then Nifty would violate these levels immediately in the morning itself.

Monday, June 05, 2006

TECHNICAL OUTLOOK - 03, JUNE

05, JUNE
Nifty 2091.35

As written in my previous newsletter, Nifty didn’t violate its earlier low and it is a strong bullish pattern. The price pattern that unfolded since suggests that Nifty would sharply move towards 3300 region or it can once again test 3050 region before moving up. After testing the high of 3280, Nifty came down to test 2937 in five trading sessions. So, Nifty should move above 3280 region in another 4 trading sessions and if it does so, higher targets are in store. The stop for the longs is 3000.

The last upmove from 2963 to 3099 is slower than the previous downmove. For the market to move further up, the last upmove should be faster than the previous upmove. Only in cases of last leg being a running pattern, the last upmove can develop as slow pattern and then suddenly it can pick up momentum in the upside. So, Nifty to continue its rally, we should see a strong rally immediately towards 3300 levels from today. On the other hand, if it once again enter below 3000 level or if it fails to clear 3150 level sharply, then the market would be choppy for some time. If that is the case, then avoid holding long position for the time being.

Of all the bullish counters, Acc and Reliance could seek higher levels quickly. Hedge any positions using Options or use appropriate stoploss as the market will be volatile.




Earlier, it was writtern that though the level 3050 was also breached, the trading pattern for the past few trading sessions suggests that Nifty was in the last leg of this correction. Now the possible range for the last leg to get completed was quite wide. In some cases, if the market is strong, it will not go below its previous low and here it should not go below 2896. In some cases, a new low will be formed within few points below the previous low. In this case, Nifty could form a bottom around 2850. In some cases, the low is formed at double the length of the previous rally. Here the previous rally moved up 380 points and another 380 points fall below the low of 2896 is the maximum possible correction.

With almost all the individual stocks already retraced by 33 percent, a drastic extended downside fall in Nifty seems unlikely. Chances of Nifty holding the bottom of 2986 is the most likely scenario.




In a medium term view, it seems that Nifty has botttomed out around 2986. If this bottom is not violated here after, then we could see a sustained rally towards 3280 region initially and then to 3780 region in coming weeks. Once Nifty tests a new high in coming weeks, it foretell a massive rally in the Index, probably the fastest in this bull Market.

Friday, June 02, 2006

TECHNICAL OUTLOOK - 02, JUNE

02, JUNE
Nifty 2962.25

Though the level 3050 was also breached, the trading pattern for the past few trading sessions suggests that the Nifty is in the last leg of this correction. Now the possible range for the last leg to get completed is quite wide. In some cases, if the market is strong, it will not go below its previous low and here it is 2896. In some cases, a new low will be formed within few points below the previous low. In this case, Nifty could form a bottom around 2850. In some cases, the low is formed at double the length of the previous rally. Here the previous rally moved up 380 points and another 380 points fall below the low of 2896 is the maximum possible correction.

With almost all the individual stocks already retraced by 33 percent, a drastic extended downside fall in Nifty seems unlikely. Chances for Nifty to bounce back within 70 points from here is more likely. Todays trading pattern can give a clue about the position of Nifty. In any case, the swing in the nifty is going to be wide. Protect your position with stoploss or hedge using options.

On the upside, a move above 3130 region would give strength to the market.

Thursday, June 01, 2006

TECHNICAL OUTLOOK - 01, JUNE

01, JUNE
Nifty 3214.90

Last week, I mentioned that 3050 region is the tip of the triangle. Markets normally bottom out around this region, if market is correcting that particular last leg. Here, the last leg started around this region. Though Nifty moved below this level in the intraday, it has not so far closed below this level. So, the chances of market bouncing from this level is very high. If Market bounces from this level and clears 3280 region in three trading sessions, then the bottom formed at 2896 would not be violated here after.

For todays trading, Nifty could once again retest 3000 levels before moving up or it would sharply move towards 3140 region. In any case, a move above 3110 level would indicate strength. After testing 3280 level, Nifty moved down to test 2970 level in four trading sessions. So, Nifty should move above 3280 region in less than four trading sessions to move up further.


On the other hand, if the region 2970 is violated in the downside, Nifty would move towards its previous low of 2896 region sharply. Even this level 2896 is not held, then the correction could extend further drastically.

It Seems Nifty has bottomed out and has turned bullish. Initially, it could move towards 3280 level and if this region is cleared, then it could move towards its previous top of 3777 in coming weeks.