Nifty Weekly Update for week ended 29th May 2009

Nifty Weekly Update for week ended May 29th, 2009.
The nifty opened on a week note then moved down and from Wednesday onwards it started to move up and nearly touched 4500 from where it reversed and ultimately closed at 4448. It may be noted that nifty is continuously rising for last 12 weeks and the coming week is the 13th week and 13 happens to be a Fibonacci giving an indication that we there is high probability of correction being set in. In the coming week nifty might try to move up and there after has chances of correcting. But till the support line drawn from the bottom of the raise is broken the trend is intact. The support line is at 4000 so till nifty is above 4000 there is no problem for nifty as the trend is intact. It may be noted that there is huge divergence in Elder bull ray indicating that bulls are loosing ground and bears are slowly creeping into the market. There is also divergence in the RSI which is indicating that the market is loosing ground or undertone is not strong as it was at the start of the raise. It may also be noted that TRIX is also at very very high level higher that that where it is in December 2007 indicating the correction might be coming in sooner or later. It may also be noted that indices are at the September 2008 highs which it failed to break last week and also this week so very strong move above 4600 is required for nifty to indicate strength but the oscillators are indicating that nifty is showing signs of weakness. So it better to protect your longs. Even DMI has reached a very high level of 47 the maximum reached by DMI during the last bull market is 51 indicting the end for the current rise is near. So all these things are pointing towards imminent correction at-least for the short term.

As per Elliott wave analysis it appears that we might be in the fifth wave of the raise i.e E wave and any fifth wave failure would indicate that nifty has chances of moving towards the 3700 levels. Fifth wave occurs when the wave E fails to move above the high of ‘C” wave i.e above 4509 and to the upper resistance trend line. Any failure of nifty to move near the Resistance line drawn joining all the tops indicates the we might see a deeper correction that witness during the last three months. It may also be noted that nifty has also completed three months of raise and three happens to be Fibonacci and we can expect some correction in the fourth month. If during the month of June 09 also the market moves up then we have chances of market moving up during the month of july also.
Larger picture of nifty:
It may be noted that nifty has corrected from 6357 to 2539( where the wave ended even though the low was 2222) a fall of 3818 points and the raise has moved above the 50% level and moved below that 50% level is at 4448 it just moved above it and is below it so it will offer a formidable resistance now. The 61.8% level is at 4898 which will be very very difficult to break and market might take time to break above it. Any break of the same has chances of seeing nifty a new high. If the correction on larger picture is not over and we are forming a zig-zag we might see market moving up above the 61.8% level in time to come. It may go near it and correct towards 3000 levels. This now not body will believe now but if correction is not over (which according to me is not over now) we have all the chances of seeing nifty near 3000.
Directional Momentum index
As indicated in my last weeks update bulls have taken firm grip on the market. DMI has moved from 46 to 47 levels indicating that bulls are still in control of the market. As the DMI is above 40 we can see a huge volatility in the market with upward bias in the market. It may also be noted that DMI is at very high point. The High point reached by DMI during the entire bull market is 52. When ever it moved to 45-49 levels it has reversed the trend correction was witnessed. So it is pointing towards a correction and wait and watch for nifty to give an indication.

Turtle Trading: - 20 days phenomenon;
Current Indication – buy Generated at 2850
Longs may be closed on movement below – 4167
Shorts may be initiated on close below 3479
ATR is at 110.

Individual Stocks
Easun Royal- Rs.82/-

This is one of the fundamentally strong company which has give a buy signal technically and also as per flow technique and has confirmed the same with forming higher top indicating that the stock is gaining momentum. The very very high volumes are also indicating the there is ample scope of upward movement. It appears that the stock has chances of moving atleast 50% from the current levels. Stop Loss: Rs.70/- you should not hold if it breaches Rs.60/-
OCL Limited- Rs.92/-

This is one of the fundamentally strong cement company which has given an indication that it will move up from current levels and it appears that it is on its way to 150 in shorter period of time. The volumes are also increasing indicating that the stock has potential upside movement from the current levels. Technically it is a safe bet at these levels. Stop Loss: Rs.70/-
Tanla Solutions Rs.79/-

This stock appears to be one of the technically sound stocks which is moving up on very very high volumes. The extraordinary high volumes when the stock has just started to move up is pointing towards some substantial movement in the stock in days and months to come. Fundamentally the performance of the company is not very good by is into profits. But the volumes are indicating towards some good times both stock performance and also on fundamental side. Stop Loss: Rs.50/-

M.Sri Mahidar
Sunday 31st May 2009 8.30 PM IST

Trend is friend

Nifty Update for week ended 23rd May 2009

Nifty Weekly Update for week ended May 16th, 2009.
The movement of nifty during the week is nothing but spectacular. It opened with a gap that too with ceiling and also went on to hit a second ceiling. Till now we are experienced on down ward ceiling and this is a quite new to us. Nifty closed during the week with a gain of nearly 15%.On point may be noted that till indices or stocks are raising/falling steadily there is no problem with the rise but when they raise/fall vertically the real problem arises as the generally after such a vertical raise the entire raise/fall is recovered of major portion of it is recovered. And another point to be noted is that the high or low of such a vertical raise/fall is difficult to break. You might have noticed on black Monday i.e. in May 2004 when new government was formed the market formed a new low which till now has not been broken and also the vertical fall of January has ensured that the low of vertical fall was not taken out till 5 months and also the fall of October 2008 the low made during that period is not broken till date even though 7 months have gone by. If going by the history technically it appears that the high made on Monday will not be taken out easily as it will offer formidable resistance to any further up movement. Generally such vertical raise/fall is associated with extreme optimism/pessimism that is the reason those levels are difficult to be taken out as such optimism/pessimism is difficult to exceed.So now history is to be believed we have made a top at-least for three to five months period. And also the indices are far above the moving averages which is giving an indication that indices might move towards the moving averages or MA will move towards the price. But going by the history price moves towards MA giving an indication that price will move towards MA indicating that we might see a down ward movement in the indices at-least for next one to two weeks. So be care full with longs.It may also be noted that indices have been raising continually for the last 11 weeks and we are two weeks away from the magical 13 but as I have indicated there so many cases when correction has set in after 11 so we have to see what the market indicates..
Elliotte wave Analysis

It can be seen from the above chart that the indices are in a trading channel and till the channel is not violated on the down side there is not problem for the uptrend. As the channel is still intact the uptrend is still maintaining. It may be noted that the A wave from 2539 to 3497 a raise of 958 points and the “B” a flat was a raise of 37 points ( it was a running correction) and the “C” generally will imitate “A” wave in value or time wise and also Fibonacci relation ship of the same. The “C” wave of from 3534 to 4509 a raise of 975 points which is nearly equal to wave-A. so it is giving an indication that the wave ”C” might have completed and we might see a correction at-least for short period of time which will bring the indices to the support levels which is around 3800 levels. So as far as technicals are considered we might see a correction in coming weeks.
Larger picture of nifty:
It may be noted that nifty has corrected from 6357 to 2539( where the wave ended even though the low was 2222) a fall of 3818 points and the raise has moved above the 50% level and moved below that 50% level is at 4448 it just moved above it and is below it so it will offer a formidable resistance now. The 61.8% level is at 4898 which will be very very difficult to break and market might take time to break above it. Any break of the same has chances of seeing nifty a new high. If the correction on larger picture is not over and we are forming a zig-zag we might see market moving up above the 61.8% level in time to come. It may go near it and correct towards 3000 levels. This now not body will believe now but if correction is not over (which according to me is not over now) we have all the chances of seeing nifty near 3000.
Directional Momentum index
As indicated in my last weeks update bulls have taken firm grip on the market. DMI has moved from 38 to 46 levels indicating that bulls are still in control of the market. As the DMI is above 40 we can see a huge volatility in the market with upward bias in the market.
M.Sri Mahidar
Sunday 24th May 2009 8.30 PM IST
Trend is friend

Nifty Technical Update for week ended 14th May 2009

Nifty Weekly Update for week ended May 16th, 2009.
Nifty during the whole week has been in a trading in a range between 3550-3700 it appears mainly due to the electoral results. As is wants to decide on which way to go after the results are over and which government will form. As now stable governments is going to form which will be going to last for next five years we might see the markets trending up at-least for the current week. I may be noted that nifty has completed 10 weeks of continues rise and it appears to be heading for the next target of 13 weeks so wait and watch as the market marches ahead. It may also be noted that nifty is maintaining above the 200 day Moving average for the last one month indicating the bulls are in control of the market and also 20 day EMA has moved above the 200 Day EMA after nearly 15 months indicating that bulls are taking control of the market and we might see further upsides for the market. As the market is above 200 Day EMA firmly and also stable government at center we might see markets heading further upside and it appears that long term investments can be made with a stop loss when ever market fall below the 200 day EMA.

It can be seen from the above that nifty is still maintaining in the upward channel starting from 2500 levels. Till that channel is intact there is no problem for bulls. It may also be noted that there is a healthy divergence between Indices and Elder bull ray and RSI and other oscillators which are pointing that even though market is raising bulls are loosing battle in their course and bears are slowly entering the market. The divergence in the elder bull ray is a very powerful are it is clearly indicating the bulls are loosing ground. The divergence does not indicate that we should short the market no no never go against the trend. Till the upward channel is intact don’t ever try to short the market and it pays to go long the upward channel support line is at 3600 and till market does not go below 3600 no need of worry for bulls. So just follow the trend. It may be noted that nifty might be heading for 3850 which is 61.8% of the fall of the last wave from 4500 to 2500 levels so 3850 is going to be a formidable resistance as far as elliotte wave is considered. It may also be noted that the yearly pivot is at 3856(of Jan to Dec 08) So we might see bulls taking a breather at 3800 to 3850 levels and then make an attempt to move further.
Directional Momentum index
As indicated in my last weeks update bulls have taken firm grip on the market. DMI has moved from 42 to 38 levels indicating that bulls are loosing ground but still in control of the market. As the DMI is near 40 we can see a huge volatility in the market with upward bias in the market.
Turtle Trading: - 20 days phenomenon;
Current Indication – buy Generated at 2850
Longs may be closed on movement below – 3367
Shorts may be initiated on close below 3297
ATR is at 111.
Individual Stocks:
Bharti Shipyard:109

Bharti Ship yard is a fundamentally good stock which has fallen from its high of above 800 to around 50 levels and currently it is at 109. I has moved above the 100 day EMA after nearly 15 months and also 15 day EMA has just moved above the 100 day EMA indicating that bulls are just coming into the stock and also it may be seen in the above chart that the volumes during the last week are so were very huge indicating that good amount of accumulation has gone into the stock and it might be heading further upsides. It may also be noted that for the last one year or so the stock has been making lower highs and lower tops and during the month of may it has made a higher top and higher bottom indicating the trend might has just reversed. So technically an excellent stock and if Fibonacci ratios are applied the stock should at-least reach 170 in next two to three months. Stop Loss: Rs.90/-
M.Sri Mahidar
Sunday 17th May 2009 9.00 PM IST

Trend is friend

NIfty Update for the week ended 10th May 2009

Nifty Weekly Update for week ended May 9th, 2009.
Nifty opened very very strongly on Monday and successfully closed above 3517 its resistance level for last two weeks and went on to cross 3600 and stayed above it for rest of the week. It went on to make a high of 3717 and there after slightly corrected and now place at around 3620. Nifty all through the week stayed above 3600 and except during the opening trade it quoted below 3600 and during the rest of the week it made its low around 2620 levels. It appears that nifty has tired of raising and giving signs of weakness at-least for very short term. All the technical oscillators like ROC, RSI, CCI, and Momentum are showing a –ve divergence indicating that market is raising but lacks strength. So we can expect some amount of correction in the coming week or two. Longs may be initiated only on close above 3717. If nifty moves below 3600 we have chance of seeing nifty at 3400 its 200 day EMA. Nifty sustaining above 200 day EMA for the last one week to 10 days is an indication that bulls are holding on but the –ve divergence in oscillators indicating that they might have tired and need a rest before they go on to make a new high. Any up move and a new high from current level will be dangerous for the market as we might see a far bigger correction after the rise. In my view its better for the market to correct and then make an attempt for a new monthly high. But we never know what market has in-store for us. Nifty has completed 9 weeks of continues rise and 9 is above 8 so we can see nifty making a montly high at-least by 13th week. So we might see nifty raising for the next four weeks. Don’t be carried away it implies that by 13th week nifty has all the possible chances of closing above 3717 with intermediate corrections. As per Fibonacci the trend should be up at-least for next four weeks means at-least till the end of may. There are some instances where market have corrected in the 11th week or so. But there are fair chances that by 13th week nifty has chances of making a new monthly high.

It can be seen from the above chart that market is moving in a channel for the last 9 weeks any break of the channel has chances of seeing a bigger correction than what is seen in the last nine weeks. The first support line is at 3600 and the second one is at 3550 so any move below 3550 has chances of taking nifty towards that 200 day EMA. If the trend line is not broken in one week or so we have chances of nifty moving towards the resistance line which appears to be at around 3850 levels.

Directional Momentum index
As indicated in my last weeks update bulls have taken firm grip on the market. DMI has moved from 39 to 42 levels indicating that bulls are still holding upper hand... As the DMI has moved above 40 we can see a huge volatility in the market with upward bias in the market.

Turtle Trading: - 20 days phenomenon;
Current Indication – buy Generated at 2850
Longs may be closed on movement below – 3311
Shorts may be initiated on close below 3149
ATR is at 110.

Individual stocks:
Jammu and Kashmir bank Rs.356

This is one of the fundamentally good, sound bank which has given a very good technical reversal indication. It has formed a reverse heads and shoulders pattern and the break our above the neckline has happened when it closed above Rs.350 and that too with volumes. This appears to be perfect technical reversal pattern. The minimum level of the break out should be at around Rs.140 from break out so the minimum target should be 490-500 a 50% return from the current level. Stop loss:300/-

M.Sri Mahidar
Sunday 10th May 2009 9.00 PM IST

Nifty Weekly update for week ended 30th April 2009

Nifty Weekly Update for week ended 30th April, 2009.
Nifty on Monday opened on a positive note moved up and then collapsed late on Monday and Tuesday and there after on Wednesday bulls came back with vengeance and took every body by surprise. Nifty is flirting with 200 day EMA for the last two weeks when ever it’s moving below the 200 day EMA the bulls are coming back with vengeance and taking the nifty above that. But it may be noted that nifty is struggling to move above the 3500 mark so unless and other wise nifty move and close above 3500 longs should not be initiated, any shorts should be closed when ever nifty closes above 3500 without any argument. There neutral zone between 3400 and 3500 and any move below 3400 should encourage bears to take nifty towards 3300 it appears that nifty has formed a temporary support at 3300 levels as good buying pressure is coming in when ever indices reach that level. It may be noted that nifty is moving up with higher tops and bottoms and any close below 3300 will violate that and bears might become move active and try to take nifty toward 3250 to 3150 where in the buying pressure should come. One point may be noted that indices are moving up with –ve divergence of RSI and also Momentum oscillators indicating that the rise in the market lacks conviction. It may also be noted that the nifty has moved up during the week with –ve divergence of Elder bull ray indicating that indices are moving up without the support of bulls and we have chances of market reversing and moving down in the coming week. Another point to be noted is that nifty has completed 8 weeks of continues rise and eight happens to be a fiboancci and also as there are –ve divergences we can expect a correction in the coming week. If nifty on weekly basis closes on a positive basis during the current weeks also we can see nifty raising for another four weeks to complete the next Fibonacci of 13. So the coming week is going to be decisive one to decide the course of the market for the next one month. So keep your fingers crossed.

As far as elliotte wave is considered there is no change to that explained during the last week so no update on the same is furnished.
Directional Momentum index
As indicated in my last weeks update bulls have taken firm grip on the market. DMI has moved from 39 to 38 levels indicating that bulls are still holding upper hand but as DMI has moved down indicating the at present they are loosing their ground.. As the DMI is moving above 40 we can see a huge volatility in the market with upward bias in the market.

Turtle Trading: - 20 days phenomenon;
Current Indication – buy Generated at 2850
Longs may be closed on movement below – 3297
Shorts may be initiated on close below 2962
ATR is at 109.
Individual Stocks

Kirloskar Bros: Rs.101/-
This is one stock which was beaten down from Rs.550 to around Rs.65 in the 2008 and now has started to raise and has made a six months high currently and it appears to be heading for Rs.150 from current levels. The OBV ( on balance Volume) oscillator is indicating that some good amount of accumulation has gone into the stock and stock may be heading for higher prices. Stop Loss Rs.75/-

M.Sri Mahidar
Sunday,May 3rd, 2009 8:23:38 PM IST