Sensex Technical View :
Yet again a new low made but not much below the recent one. Then again a recovery from lows seems to be the standar pattern. Technically one can confirm a bottom only after it stays in place for quite some sessions and then a follow up consolidation . For Sensex the major levels remain 8800-9700 on the downside. The recent top at 11870 could be the decider for extreme short term and sustaining above 3400 on Nifty and 11200 for some sessions will give some power to a bounce. So next 3-5 sessions could see some clarity come in.
In previous times its seen whenever RSI has given a positive divergence to previous lows we do see a bounce which is yet again the case. But the bounce has fizzled after 10 % or more bounce. So ideally going by this study we should see a bounce to 11200 levels and on crossing 11900 it could get highly positive for 12900-12300. ( Disclosure : Have advised buying 3500 call option at 68 )
Stocks to watchout for :
Review :
Bharti Tele moves below 700 gives a trading down tick till 660s but not a close below 700 so still not a breakdown and can again remain in the range.( Disclosure : short call at 690 covered half at 660 then stop of 685 hit )
BHEL hasnt closed so wait and watch ( stop of 10-15 rs hit ) . LIC housing bounces back from the lower zone and above 275 could be positive.
NALCO cracks and gives a good downmove and can continue till 240 or lower also .( Disclosure : short at 310 tgt of 285 half booked )
Some of the stocks have bounced back sharply after breaking recent lows and given a good closing which is a good sign and nice candle patterns in certain cases.
So if one is a short term trader then a quick trade can be done if the stocks cross recent bounce back highs ( 11900 Sensex ) for 10 -15 % + bounces and a stop of 3-4 % on crossover.
Some of the possible trades which can be looked at with similar tech logic.
Aban lloyd .... above 1300 can touch 1450-1550
Balrampur Chini .... above 60 can touch 66-69
HDIL ... above 140 can do 155-165
IDFC ... above 65 can touch 72-75 ...
Renuka .. above 73 can touch 80-85
There could be many such trades possible.... Keep a watch and its a trading bounce play so keep stops and book at 10 % moves.
Market Observations and Thoughts :
As we have been seeing 61 % is the level for Sensex and Nifty which are nothing but averages for the 30 and 50 stocks. So i was just having a brief look on some heavies to how much they have corrected. The main weightage ones are Reliance,SBI,LnT, ICICI,Infosys .
Reliance 1300 , SBI 1050,Lnt 850, ICICI ( below 61 % ) , Infosys 1100. All of these have made lows close to 61 % or are very near to it. At the same time many constituents are below 61 % and may go to till 73-75 % retracement too. So if we consider it to be a long term bull trend then lot many stocks have come back to attractive levels and much of the price correction is done although there could be scope for more but staggered buying over a period of time would be preferred as time to recover phase is still left.
" Many investments become LONG TERM coz PRICES have dropped, BUT SUPERLATIVE Gaining Long term investments are created by buying when SENTIMENTS have DROPPED "
Yet again a new low made but not much below the recent one. Then again a recovery from lows seems to be the standar pattern. Technically one can confirm a bottom only after it stays in place for quite some sessions and then a follow up consolidation . For Sensex the major levels remain 8800-9700 on the downside. The recent top at 11870 could be the decider for extreme short term and sustaining above 3400 on Nifty and 11200 for some sessions will give some power to a bounce. So next 3-5 sessions could see some clarity come in.
In previous times its seen whenever RSI has given a positive divergence to previous lows we do see a bounce which is yet again the case. But the bounce has fizzled after 10 % or more bounce. So ideally going by this study we should see a bounce to 11200 levels and on crossing 11900 it could get highly positive for 12900-12300. ( Disclosure : Have advised buying 3500 call option at 68 )
Stocks to watchout for :
Review :
Bharti Tele moves below 700 gives a trading down tick till 660s but not a close below 700 so still not a breakdown and can again remain in the range.( Disclosure : short call at 690 covered half at 660 then stop of 685 hit )
BHEL hasnt closed so wait and watch ( stop of 10-15 rs hit ) . LIC housing bounces back from the lower zone and above 275 could be positive.
NALCO cracks and gives a good downmove and can continue till 240 or lower also .( Disclosure : short at 310 tgt of 285 half booked )
Some of the stocks have bounced back sharply after breaking recent lows and given a good closing which is a good sign and nice candle patterns in certain cases.
So if one is a short term trader then a quick trade can be done if the stocks cross recent bounce back highs ( 11900 Sensex ) for 10 -15 % + bounces and a stop of 3-4 % on crossover.
Some of the possible trades which can be looked at with similar tech logic.
Aban lloyd .... above 1300 can touch 1450-1550
Balrampur Chini .... above 60 can touch 66-69
HDIL ... above 140 can do 155-165
IDFC ... above 65 can touch 72-75 ...
Renuka .. above 73 can touch 80-85
There could be many such trades possible.... Keep a watch and its a trading bounce play so keep stops and book at 10 % moves.
Market Observations and Thoughts :
As we have been seeing 61 % is the level for Sensex and Nifty which are nothing but averages for the 30 and 50 stocks. So i was just having a brief look on some heavies to how much they have corrected. The main weightage ones are Reliance,SBI,LnT, ICICI,Infosys .
Reliance 1300 , SBI 1050,Lnt 850, ICICI ( below 61 % ) , Infosys 1100. All of these have made lows close to 61 % or are very near to it. At the same time many constituents are below 61 % and may go to till 73-75 % retracement too. So if we consider it to be a long term bull trend then lot many stocks have come back to attractive levels and much of the price correction is done although there could be scope for more but staggered buying over a period of time would be preferred as time to recover phase is still left.
" Many investments become LONG TERM coz PRICES have dropped, BUT SUPERLATIVE Gaining Long term investments are created by buying when SENTIMENTS have DROPPED "
Nifty looks great for an upmove only till 3250 is held, it can hit 3445-3490 levels for the day.
breaking 3250, weakness will set in, tgts are 3225-3195
now in the chart, if u see, we may go close to the upper trendline, and hit around 3457 levels before we continue with the downward jouney again.
till we breakout of the upper trendline, we may fall hard anytime, play smart.
Inference from Weekly Charts
As per Weekly Charts of Nifty Downside is limited to 3050-3100
Even if there is a fall then the amount of incurred fall is limited.
So good to grab stocks within this limits. And Resistance for weekly charts at 3980 region where exactly the 200day Weekly EMA is coming.... would act as a long term resistance.
But we had already tested downside trendline twice... So if we are to test the
upside trendline it will take alteast 4-6 weeks to achieve the target of 3980
and ofcourse the timeframe comes near mid of November. So concentrating on november or december 3800 or 4000 option may pay you heavily which are currenlty trading at cheaper prices.
And there is a possibility of october calls may end worthless As the result reason is facing hard emotions there is a possibility that every upside may be counter attacked with subsequent sell off. So Every Subsequent sell off should be consider sportively to accumulate your long with stoploss near 3050-3100 range.
Best Buy : 3100-3200
If everything is correct then possibly a bullish hammer or a Bullish Candlestick will be formed in next week Candle in nifty weekly charts.Iam expecting one more panic selling to get into the longs as the sco value is still above 5.
SCO Values
14th OCT : 64
15th OCT : 23
16th OCT : 15
If SCO closes below 5 then good to initiate longs and if closes above 95
then huge change of nifty to come down in next 2 days
Nifty CMP : Rs 3269.3
It is the Game repeated again and again in nifty
And Today's of maintanence nifty above 3200 and it is the 2nd attempt to save nifty above 3200. Clear sell signal if nifty closes below 3200.
And Today's of maintanence nifty above 3200 and it is the 2nd attempt to save nifty above 3200. Clear sell signal if nifty closes below 3200.
Bulls are still holding its grip in Hero Honda, Ranbaxy and Sun Pharma. And Bull run started for Hero Honda
Remember Bears are Hungry below 3200 in nifty
Inference from Weekly Charts
As per Weekly Charts of Nifty Downside is limited to 3050-3100
Even if there is a fall then the amount of incurred fall is limited.
So good to grab stocks within this limits. And Resistance for weekly charts at 3980 region where exactly the 200day Weekly EMA is coming.... would act as a long term resistance.
But we had already tested downside trendline twice... So if we are to test the
upside trendline it will take alteast 4-6 weeks to achieve the target of 3980
and ofcourse the timeframe comes near mid of November. So concentrating on november or december 3800 or 4000 option may pay you heavily which are currenlty trading at cheaper prices.
And there is a possibility of october calls may end worthless As the result reason is facing hard emotions there is a possibility that every upside may be counter attacked with subsequent sell off. So Every Subsequent sell off should be consider sportively to accumulate your long with stoploss near 3050-3100 range.
Best Buy : 3100-3200
If everything is correct then possibly a bullish hammer or a Bullish Candlestick will be formed in next week Candle in nifty weekly charts.Iam expecting one more panic selling to get into the longs as the sco value is still above 5.
SCO Values
14th OCT : 64
15th OCT : 23
16th OCT : 15
If SCO closes below 5 then good to initiate longs and if closes above 95
then huge change of nifty to come down in next 2 days
Nifty :: A long lower shadow & Hammer , bullish candle pattern occurred.. We clearly indicate in our yesterday post that it might be last extended C of 5th wave.. And it may be finish today. Treading above today’s high give more conformation about bullish candle pattern structure.. In one level above 3316 momentum seems up, below 3259 momentum down.. Our strategy for 17th Oct. above 3316 buy on deep sell at high.. Resistance for up move at 3316/3376/3396/3441/3490/3594.. Supports at 3259/3200/ 3150/3076..
A quick update here...
As I said before, I am bit confused on what next but some ideas here on what can happen...
Today should be up huge...Monday also might be up...good probability for it....we can get to somewhere like 3500...even 3600...more than that for this round might not be possible...after that again, i expect a downmove to an important low sometime mid to end next week....this will be the final low....and should be bought very aggressively...
Now the problem here is I do not know how low that low will be?....Can be a lower low....Can be something very close to 3000 also...
BUT there is also a possibility it goes lower to somewhere in the 2700-2900 range...
So best keep above in mind...
What can be done is keep buying in cash but also hedge positions with equal number of PUTs...Atleast our risk is managed for this month..The idea being that we build a long term portfolio for the next big rally...
What we are seeing now in the markets and economy is truly unprecendented....Something I have never seen...Bottom picking is never easy and can never never be 100% accurate...But the aim is to get as close as possible...And maximize reward with respect to risk...
This is my last post before I join you on Monday. Here are three kinds of bottoms ! Bottoms are fast and furious than tops because people feel more f***** up here than at the top. There is pain in the bottom ! Let us see what happens on each type.
As I said before, I am bit confused on what next but some ideas here on what can happen...
Today should be up huge...Monday also might be up...good probability for it....we can get to somewhere like 3500...even 3600...more than that for this round might not be possible...after that again, i expect a downmove to an important low sometime mid to end next week....this will be the final low....and should be bought very aggressively...
Now the problem here is I do not know how low that low will be?....Can be a lower low....Can be something very close to 3000 also...
BUT there is also a possibility it goes lower to somewhere in the 2700-2900 range...
So best keep above in mind...
What can be done is keep buying in cash but also hedge positions with equal number of PUTs...Atleast our risk is managed for this month..The idea being that we build a long term portfolio for the next big rally...
What we are seeing now in the markets and economy is truly unprecendented....Something I have never seen...Bottom picking is never easy and can never never be 100% accurate...But the aim is to get as close as possible...And maximize reward with respect to risk...
This is my last post before I join you on Monday. Here are three kinds of bottoms ! Bottoms are fast and furious than tops because people feel more f***** up here than at the top. There is pain in the bottom ! Let us see what happens on each type.On type 1, a first low is made which is followed by a pullback and then a reaction. But the reaction stops above the first low and a rally begins leaving you back because you thought of buying near the first low ! WTF ! Type 2 makes everybody happy because they were able to buy at the level of the first low. Type 3 - aha ! the one we are having now - is the most screwed up case because the guys who bought at the first low have sold out at the second low and nobody has the guts to enter at the lower low. Now you know why the current set up in our markets is a sell unless you want to be a hero. You can read more on this in John Bollinger's book - Bollinger on Bollinger Bands.
The Indian market again gap-down opening and smart recover sell off at last hour and close in red zone. On daily chart nifty had made hammer if we open above 3330 than we can see some more rally towards 3460-3500 on the lower side 3130-3060 will act support .Market will react more on global cue
The Indian market again gap-down opening and smart recover sell off at last hour and close in red zone. On daily chart nifty had made hammer if we open above 3330 than we can see some more rally towards 3460-3500 on the lower side 3130-3060 will act support .Market will react more on global cue
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