NEWSLETTER

MY CHART

Nifty :: As per our yesterday post Nifty exactly take support near 4398 and made double bottom. From last three day’s volume decreasing constantly .. Now for 12th Aug 4398 double bottom works as strong support below 4398 watch next strong support zone 4323/4284.. Still situation under control for bulls.. Our strategy for 12th Aug up to 4398 buy in deep (4398) Sell at high (S.L 4565) .. Once Nifty break 4398 change strategy as sell at high buy in deep up to 4323 (S.L 4284).. Avoid shorting near 4398/4323/4284.. Resistance for up move at 4495/4503/4515/4565/4600.. Supports at 4398/4337/4323/ 4284..

(S S Cheema)

I have searched high and low for the answers to the questions that have been hounding my mind seeing the markets today. They opened as per the expectations… so far so good – then went on to show strength – suddenly sold off with a bounce again. I wonder those sitting with tons of certificates in finance and economics are not the ones jittering like this. But then what the hell – it happens every second day. The moves were extremely sharp and am sure that only the fast fingers would have got anything worthwhile fishing in these waters. The FII data streaming in is not really bright from any angle except that they have not sold the whole lot like they did yesterday and day before. The DII seems to have become pretty active – the moot point will be to see how long FII withdraw and DII keep pumping in money. There is tons of money in our country that sits in the side lines. That is okay but historically a vast majority will never flow into the markets at any rate. Another angle is the money being sucked out due to the IPOs that have been open and are to come in the next few days.

As far as the global cues are concerned – they are not good at the moment – what can happen till morning is --- uhh !! not likely to become good – but then as I sleep the world turns around. Asia was good – we had Nikkei up 0.58%, Hang Seng up 0.69% and Strait Times – the one that was not trading yesterday make most use of the lost time and ended up 1.88%. I will not talk about our levels as shown close after adjustment were far away from where they were at the moment. – they were green nevertheless. Europe had opened green and perhaps that was the strength that was with us to remain green – all the same the Europe thereafter nosedived to close at the day worst levels. FTSE was down 1.08%, DAX down 2.44% and CAC down 1.38%. US has reached its mid session and no – it is nowhere good as of now. They are waiting for the beginning of two day feds meeting. As of now Dow is down 1.07%, Nasdaq down 1.38% and S&P down 1.36%.

As far as our technicals are concerned – there is no good news inspite of this bounce in green that we had. Let us see the details… 3 EMA first had crossed below the 15 EMA and now it is below the 20 EMA. So shorts rejoice. We are past the middle of the Bollinger Bands on the down side now – it remains to be seen when and how we hit the bottom of the lower Bollinger band. Bollinger bands are constricting and I – being the bear I am at the moment am not interested in at the moment. The volumes were low – 74% of the last 50 Day average. Do not look at the ADX in the chart – I have already written to iCharts that their values are incorrect and they have promised to rectify them – till then the ADX reading is 16 – weak trend. So I am really waiting for a value above 20 while the markets fall for it to be classified as a down trend as per this. All the same the sell signal remains. MACD is bearish. RSI is at 50.53 so I will disregard the bearish indication that it had generated yesterday. Slow Stochastic is bearish but oversold. Remember – if we are indeed in a downturn then it can remain oversold for pretty long – so keep aside the worry for some time. The TRIX – the leading indicator is looking down.

As far as the options data is concerned not too much of change – nor any out of the way build-up at any levels so the same holds true for today as yesterday. So I will summarise – the Global cues are likely to remain weak tomorrow. Technically markets are weak and likely to have a greater down side in the days to come. The ideal strategy is to go short or remain short who initiated them earlier. Stoploss for shorts is 4555 and absolute stoploss for longs (if anyone is holding) is 4421. For day trading be long above 4500 and short below it. The fireworks will start only below 4388 levels. And mind you there is a strong support there.

Indicator	Bullish/Bearish	Sell/Buy Signal	Nifty level at signal	Points gained/lost since 4471	Remarks.
Harami	Bearish	Sell / 04 Aug	4681	+210
315 Strategy	Bearish	Sell / 10 Aug	4437	- 34
ADX	Bearish	Sell / 07 Aug	4481	+ 10
MACD	Bearish	Sell / 10 Aug	4437	- 34
RSI	-	-	-	-	Disregarding – waiting for clearer indication.
Slow Stochastic	Bearish	Sell / 05 Aug	4694	+ 223
Options	Neutral	-	-	-

I would like to wish every one for tomorrow’s trades.

Bramesh

RIL which dragged Nifty Down today formed a Gravestone Doji (not perfectly)which can be trend reversal signal.

Stuck in a range of 1971 to 2096 Today closed at lower end of Range.I would advocate that next rise in Nifty will be lead By RIL 2040 CE has seen good accumulation by smart money.

by Keeping a sl of 1945 go long for a tgt of 2039 2078 2106

Bramesh

MLL is in quiet a strong Downtrend.But the good things for Bulls in this counter was the fall accompanied by a very small Volume.

Now strong is near a good support between 50-52 Range If the Stock is able to hold this support on a closing basis than stock can negate its downtrend and can move forth for a tgt of 56 59 66.

(*M J Akhtar*)

Rangebound.......

If Nifty crosses 4800, then it would form one of the bloodiest bull traps, I would have ever seen

SVShah)

After three days of weakness, the market closed in the positive today but saw a volatile session. Sensex shut shop at 15074, up 64 points and Nifty at 4471, up 33 points from the previous close. In the morning session, despite Asian markets opening in green Indian markets witnessed a negative start. But it recovered immediately and entered the positive zone and stayed there for long duration. But like last three trading sessions heavy selling towards the end of trading session resulted in market entering the negative zone. But again some value buying helped the market recover and close in green. On the sectoral front, Auto, Real Estate and metals witnessed good amount of buying. But rest of the sectoral indices closed with marginal gains. Market breadth was positive today with 1356 advances and only 1282 declines.

NIFTY (4471.35)

Resistance : 4495 / 4535 / 4570

Support : 4465 / 4410 / 4350

SENSEX (15074.59)

Resistance : 15240 / 15315 / 15410

Support : 14885 / 14700 / 14615 / 14525

NIFTY FUT

Resistance : 4520 / 4550 / 4575

Support : 4405 / 4380 / 4325

MKT COMMENTS

NIFTY FUT :-

OI down 2.59% with flat volumes. NIFTY AUG series PCR (OI) at 0.95. Short covering. Buying seen in 4400 CE.

Short covering plus buying seen in 4500 CE, 4600 CE. Total OI of NIFTY AUG series CALLs is up by 2.59 LK to 2.37 CR.

Volumes down 12.95%, 4700 CE highest OI in Calls.

Put writing seen in 4300 PE, 4400 PE. Total OI of NIFTY AUG series PUTs is up by 15.26 LK to 2.25 CR.

Volumes down 11.20%, 4400 PE highest OI in PUTs.

LONG POSITIONS :-

ABAN, ACC, ADLABSFILM, BAJAJHIND, BALRAMCHIN, BRFL, CUMMINSIND, DRREDDY, FSL, GVKPIL, HCC, HCLTECH, IFCI, JINDALSAW, LUPIN, NAGARCONST, RELIANCE, RENUKA, RPL, TRIVENI.

UNWINDING OF LONG POSITIONS :-

CAIRN, ONGC, SAIL, STER, WELGUJ.

SHORT POSITIONS :-

BANKINDIA, INDHOTEL, JPASSOCIAT, ORIENTBANK, ZEEL.

SHORT COVERING :-

AXISBANK, CROMPGREAV, HINDUNILVR, ITC, JINDALSTEL, M&M, MARUTI, PUNJLLOYD, RANBAXY, RCOM, SBIN.

SECTORS TO WATCH NEXT SESSION :-

SUGAR, REALITY.

On Wednesday,Opening Is Flat To Down,

Buy NIFTY Above 4485,Sl Below 4465,Tgt 4525/4540/4575/4600

Sell NIFTY Below 4460,Sl Above 4480,Tgt 4420/4405/4370/4345

BUY

ROLTA Abv 140,Sl 135,Tgt 145/50/55+

PBAINFRA Above 60,Sl 55,Tgt 65/70

BAJAJHIND Above 185,Sl 180,Tgt 195/200/205

SBIN (1729),Sl Above 1715,Tgt 1740/50/60

SRF Above 150,Sl 145,Tgt 160/70/80

SELL

ESSAROIL Below 135,Sl 140,Tgt 130/25

IVRCLINFRA Below 300,Sl 305,Tgt 295/90/85

RELCAP Below 830,Sl 840,Tgt 820/15/10

Nifty feels strong Support of 4358........and strong resistence of 4566...........Nifty not break these levels on Wednesday.............Support: 4439-4414-4384-4358..........Resistence: 4504-4524-4547-4566............. .............soooo according to us if nifty not break the strong resistence 4566 on Wednesday then we see some more correction in Indian mkts.........but if breaks then we see 4600-4650 This week.......and if nifty not sustains above the strong support today then we see 4300-4250 this week..so trade cautiousely

Rel Infra :- Sell below 1132 with sl 1151 for tgt 1111-1101-1082

The real test of conviction happens when things go bad/become extremely difficult.

It is very easy to be bullish when going is good but now is the test of conviction. Will bulls be able to pass the test?

Yesterday, Nifty after lots of intra-day volatility and choppiness managed to close above 50 dma. But today is a different day - Global cues are not supportive; and internal domestic situation looks no better. Add nervous investors/traders to the situation and you know what kind of market we are in.

The market conditions do look slippery and the big thing to watch today - Where will Nifty close today? I guess opening is not the issue - what needs to be seen - how market participants react to the opening and how they trade the market during the day - whether they buy the dips or sell the rally.

Nifty Daily Chart

Source: ChartAlert (www.chartalert.com)

As you can see in the chart above, Nifty formed two bullish signals yesterday - i. closed above 50 dma; and ii. formed a matching low on Monday and Tuesday around 4399.

Nifty intra-day Chart

Perfect Start: Yesterday, Nifty started the day near Monday’s low of 4400 and then managed a one way rally to 4510 without any choppiness.

Choppy end - Nifty really turned choppy the moment it hit 4510 - and first it had a steep fall and then equally sharp rebound before finally - Nifty closed at 4470

Looking Ahead:

SGX Nifty suggests that Nifty will start the day weak somewhere around 4420. What needs to be watched - whether Nifty holds 4398-4400 on intra-day basis or not. If Nifty sustains above 4400 - then one can expect strength in second half but if Nifty fails and break down below 4400 and stays there for a while - I am afraid lots of people will start dumping atleast short term positions leading to sharp fall.

Sometimes, Nifty do slip below an important level on intra-day basis but does not sustain there for long - so keep an eye on 4400. On an intra-day basis, bulls need to defend 4400 and on daily chart - bulls need to defend 4410. The 50 dma is at 4410.