newsletter

(Satyam Sit)

Yesterday I stated............. "a break bow 4975 can certainly make Nifty weak for the day and a immediate target will be 4940. Further breakdown can cause in more damage to Nifty which can lead fall up to 4860-4810/15-4730." We broke below those areas in very early morning and the downward slide was smooth enough. Impulse moves on every time frame is live and kicking. 

Re-posting the first chart posted in the view for 20th January, and check for yourself. HERE is the chart posted earlier and below is the current update.

 

Perfect..... isn't it?

Supports: 4825/10 looks like very close. But I am personally expecting some bounce as correction on the upside.So holding 4810/25 can provide some reasonable upmove on intra day basis. Further Violation can cause 4725/30.

Resistances: 4855 is immediate. Above that 4905-4955 is possible. Bigger bounces will be targeted by the shorters to create further short positions. Will try to update intra day tomorrow.

SENSEX takes strong support around 16210 and should sustain above the channel support line too. It may take a dash below 16200 briefly but should close above the support in weekly chart.

NIFTY too has honoured strong support at 4810. It is showing more weakness than the SENSEX as it has breached the channel support in daily chart. However the combined volumes of both the indices  suggest that the bottom may be very near. Adventurism at this stage could however be dangerous and entry is advised only after an emphatic upmove.

(Nooresh Merani)

Today in the morning had just made a post on RSI reaching highly oversold levels. The markets were down arnd 100-200 points in the morning. As per RSI we have reached to levels which were last seen around 15300 and previous major lows.

Check the RSI suggests oversold post -- http://nooreshtech.blogspot.com/2010/01/rsi-suggests-oversold-time-for-bounce.html

Further Technical/practical Observations with charts :

The index has fallen more then 16600 levels which i expected to hold or at least give a bounce. Better part is we were early into the rally with leverage taken at 16600-17k last time which we kept booking at higher levels so such a healthy correction is digestable.

Currently for stock specific actions this is a time to watch and enter/average on turnaround signals. But i would continue to maintain that avoid leverage as volatility can cut traders.


1) Fibonacci Retracements :

In the last few short term uplegs none of them have fallen much below 61% which comes to 16250-16300.
Retracement for the last move from 15.3k the 38% level comes to 16100.
For the total upmove from 8k the 23% retracement comes to 15500.

So ideally one could see bounce from 16100 band or in case we see further downmoves even after that then also 15500 should hold up for the next few weeks.
Move below 15500 opens up a correction of a higher degree.




Trendlines/Averages :
The extreme short term trendline which was at 16600 and a few bottom supports in that zone got broken today and the next important one comes around 16100.

Recent bottom at 16200 is a level to watch for. 200 day moving average comes closer to 15500 which would be the worst case in near term.
Sustaining below 15500 could really open the gates to much lower levels.

Conclusion :

Traders can look towards a bounce back trade on Nifty with a stop of 4770 and buy niftybees in parts. If the level gets broken look to re-enter around 4640-4670 with a stop of 4600.

Momentum could be seen on crossing 4950 levels which can take it to 5050-5090 also.

Sensex levels are 16100 and 15500 respectively. Do adequate risk management.

(Ilango)

Stocks have broken major trendlines and the correction or the downtrend will be deeper that the ones experienced during this last one year upmove. Do not get deceived by any rallies. Sell into 3- 4 days old rallies.

 

(Ilango)

Last time Nifty made a sharp reversal from 4807. Would it consider the same now. May be briefly or may be not, being the settlement day can be wild.. The weekly set up has now changed to a serious reversal.The settlement day will be a serious one with huge choppiness. Only the "harvesters"(Positional Shorts) will have it good. High volume selling could be of only delivery selling which may not attract rallies. Only if there are "shorts" in a big way, will it result in a sharp rally. As my critic puts it, "Stuck longs will come in to unwind on every small bounces to cut their losses".

 

 

 

 

 

 

 

 

 

 

 

 

There seem to be a positive divergence developing in hour charts but the manner in which it is developing(sharp falls) do not give it much credibility. A good +ve div should have an exhausting index/ stock where as Nifty seems to be sprinting fast..

The serious minded positional shorts may book profits either @ the multiple tops of 4700-4750 zone or when Nifty is able to close above the "Day Low Ema". Let me add this: this is not a foolproof reversal but a likely sign of "pause".