Saturday, June 30, 2012

The Big Challenge

Today I am trying to make all my readers witness for a Challenge between me and my fellow analyst friend, this will give you a good chance to look at a same picture from different angle. This also help you to know, how our mind play important role in deciding market condition and how and why two different person perceive same situation differently based on their previous experience, logic and belief. The challenge is all about predicting the market movement for the month of July 2012
Abusama Shekh:
My fellow analyst who, had correctly predicted about May Month based on two observation, first the old story "sale in May and go away" and second "Market was indifferent towards RBI policy suprise rate slash in April month". for June Month it was a good show for first half of the month and for second month he was bearish which failed.
His views for July month is as follows:
Nifty Direction: Strong Bullish
Nifty Range:     5300 to 5500
Support:           5352
Resistance:       5480
Target(Month close): above 5400
Comment: If market would not perform this month, then still remain bullish for August Month.

My Target (Dhirendra Kumar)
Nifty Direction: Mild Bearish
Nifty Range:     5000 to 5400
Support:           5095
Resistance:       5302 (61.8 retrenchment) and 5390 (21 month average)
Target(Month close): Below 5300
Comment: Market would try to fill the gap created today and 5300 is 61.8% retrenchment

Time will only tell, who will pass in selling his own believe in the month of July 2012.
Note: My further analysis will be unbiased of this challenge

Friday, June 29, 2012

5313 is very much possible now

5313 is very much possible now, as it is 61.8 % retrachment from Feb 12 high to June low. Next week target should be 5300 and stop loss 5140. Shorting opportunity at 5313 with a stoploss of 5320

Thursday, June 28, 2012

Bears have upper hand but..!!

OI are still now reducing for 5100, which signifies, bulls will be able to protect the support today.

Nifty Expiry most likley above 5100

Put Option writers are betting on above 5100 expiry. Just have a look at change in OI today. 60 Lacks OI has been added in 5100 PUT.

Buy Nifty

Buy Nifty in the range of 5140 to 5145 for a target of 5165 then 5180, keep stoploss of 5131

Tuesday, June 26, 2012

Uncertainty Index

It seems that from the 'Lehman' moment (some might call it an 'epiphany' moment), and later the US downgrade, markets realized that the impossible was possible and while every long-only manager will try to convince you that nothing has changed, these four charts (via Barclays) will go a long way to proving that everything has changed.


Click here to read full article.

It's time for Bulls to rest

Almost all indicators are oversold now, we can expect safely that it time for Bulls to rest. They are very tired after reacting on all good and bad news. They were boldly supported 5100. However today I am feeling it was a tired rally now, there is no energy (Look out for volume).
For rest of the week, I have bearish on Nifty. There is very few occassion when I decide solely on my instinct and this is one of those.
My target is 4960. I am waiting for the confirmation of bearish trend now. I advise not to be rigid and change as soon you realize, you are wrong. I will do the same.

Sunday, June 24, 2012

India Growth story is still intact

India Growth story is still intact, at least above graph is reflecting the same. Let's hope to continue the same in current decade.

Secular Bull & Bear Market

Was the March 2009 low the end of a secular bear market and the beginning of a secular bull? Without crystal ball, we simply don't know.
One thing we can do is examine the past to broaden our understanding of the range of possibilities. An obvious feature of this inflation-adjusted is the pattern of long-term alternations between up-and down-trends. Market historians call these "secular" bull and bear markets from the Latin word saeculum "long period of time" (in contrast to aeternus "eternal" — the type of bull market we fantasize about).

To read Full Article click here

Saturday, June 23, 2012

Germany Could not Save Greece

Saturday’s Bild cover (the best selling newspaper in Germany):

 It says “Bye Greece, today we cannot save you” in reference to yesterday’s 4-2 win by Germany over Greece in the Euro Cup.

The Worst Mistake a Trader Can Make

We’ve heard the laundry list of trader pitfalls time and time again – they range from overtrading and adding to losing positions to fighting the trend, indicator abuse, and not allowing profits to run on winning trades. These are all great pieces of wisdom, however, the one pitfall which I have seen hurt traders more than any other and from which many of the other pitfalls are often derived is trading too large.
Trading too much size as a percentage of ones account leads to many of the other pitfalls because it affects the trader’s decision making and causes them to do things that they otherwise wouldn’t do such as:
  • Overtrading resulting from stops that are too tight because the position is too large
  • Not adhering to stops and/or adding to losers because “they can’t take such a big loss”
  • Using confirmation bias and/or indicator abuse to justify remaining in a trade that they would otherwise close out
  • Taking profits simply because the trader has a big P&L not because it’s objectively the right decision
  • Subjecting oneself to market noise (small price deviations) instead of being able to withstand normal market fluctuations because the position is too large
Please read full story click here

Friday, June 22, 2012

Should I carry or not


should I carry or not
should I carry or not
should I carry or not
should I carry or not
should I carry or not

Rule says :

When in doubt stay out
Today my expectation was either Nifty resit at 5150 to previous close Zone or it will take support at 5095 to 5100. And hence I did not advise any trading in the middle. If you are taking position to satisfy your curiosity, then it is like betting and equivalent to gambling

Always remember if you are a trader try to close your position 90% of the times same day. If you suddenly become investor in the middle of trading, you will end up on losing side.

Nifty Trading Range June 22

Today is friday, hence I would request not to carry forward any option. Buy now for a target of 5150. stoploss 5128 Spot right now is 5133. No immediate shorting opportunity even if it hit the stoploss.
shorting opportunity is at around 5160 to 5165 with a stop loss of 5175

Go long in Nifty once it takes support in the range 5095 to 5110. Stop loss 5095
Next week is Expiry week hence do  forward your position and do not average your position

Thursday, June 21, 2012

Politics and Trading

Politics and Trading is very much similar in nature. Everybody is only thinking of himself. I would request all of you to sticks with only current situation and do not fight with the reasoning. There should not be any question from your side towards market if you are a trader. If you are an investor, this is good time to accumulate quality shares. Market is not far away to forming bottom.
Yesterday I was expecting wild movement above 5145 and below 5045. However it did not move so wild as expected and bears has still chances to overtake. US is trading in red at the time of writing this post.
Short below 5124. for a target of 5095 then 5075. Maintain a stop loss of 5190
I am bearish for tomorrow trading.

Nifty target and trading zone

Nifty is technically seems bullish as it is trading above all important SMA, above all 200 SMA
Today would be probebly the last chance for bears to drag down Nifty as it will enter into the expiry week.

India VIX is resting on support line

India VIX is very likely to jump from the support line of 21.00. And if this happen, it will only favor bears in market and Nifty may see pressure at upside.

INR about to upper breakout

INR on secular bull run since last week of July 2011. one month is still there to complete 13 month of bull run which is a fibnocci number. Also INR chart seems ready to give a breakout above 5630. Today it has closed again above 56.00
In case INR starts sliding down then 54.00 is a major support.

Wednesday, June 20, 2012

Short Nifty

Short Nifty if it breaks below 5115 on spot. no long position now. Stop loss 5135. If on closing basis it closes below today's high then short on closing hours. for a target of 5100, 5080 then 5050 tomorrow.

Short today once broke below 5115 else short on closing 5 min only if trade below 5135

Saturday, June 16, 2012

How much you need?

Rakesh Jhunjunwala has said the following words when ask, about his target

"Even if my wealth is 20% of what it is today, I'd smoke the same cigarette, drink the same whisky, drive the same car, have the same office, the same house, wear the same clothes, have the same wallet, eat the same food," he says. "Money is not anything which is going to affect me, or the way I live."

 "I've lived the world on my own terms. I do what I enjoy. I enjoy what I do."

read full story to learn how to take on trading

Some points fitting to Trader

  1. Do not carry position overnight out of speculation, because you are neither gambler nor investor
  2. A trader's job is to judge the market in hand, trade accordingly, accept the outcome and sleep well
  3. Don't go into analysis paralysis, you will only get confused
  4. Book profit continuously
  5. Trend is your friend
  6. Do not average out losing position
  7. Always set target, preferably two target and one stoploss keep your finance healthy, wealthy and wise

Friday, June 15, 2012

Niftymama Score Card

Please click this link to record your own performance in Nifty Future. Do not go for Nifty Index as the feed is delayed by almost 10 min and hence it would not be true major of your strength.

Trading Strategy for June 15, 2012

The Nifty is likely to open positive on the back of positive global cues. It is
likely to trade in the range of 5030-5110. The trading strategy would be to create
long positions if the Nifty takes support at around 5040 levels for targets of 5075
and 5100. On the other hand, one can also create short positions if it resists at
around 5110 levels

Nifty is likely to open at around 5075, hence wait till reaching till 5110. do not be adventurer. to go long and then short. Just wait for first 15 min and then decide what to do. Because, there is risk to carry forward your position, as next week is very crucial and important news even, RBI policy and Europe debt crisis.

Hidden Friends of Market

A report that major central banks would be ready to pump money into the financial system after the Greek elections this weekend gave the stock market a late push higher.
The Reuters report said major central banks were preparing for coordinated action if the results of Greek elections on Sunday strain global financial markets.
The Dow Jones industrial average jumped 155.53 points to close at 12,651.91 Thursday. That’s a gain of 1.2 percent. The Dow jumped 100 points after the report came out then pulled back.
Investors are on edge ahead of Greece’s election this weekend because parties opposed to the terms of the country’s financial bailout could take control of the government. If that happens and the country leaves the euro, many fear the currency union could be torn apart and European banks could fail.
My conclusion: Greec is on verge of Euro Exit, and all other news are just rumors to catch investor's stay with market

Thursday, June 14, 2012

Inflation Data Expectation

Tomorrow market will be looking forward for inflation data. Expectation is of 7.60%. any number more than this would only shun RBI to rate cut. Hence this would act as negative news. Again as my advise was for IIP number day trading, to go long between 10:15 to 10:30 till 11:30.

Wednesday, June 13, 2012

Astrology and world market


What if the movement of the planets in relation to Earth could foretell whether an investment will be a boom or a bust? And what if you could use that information like technical and fundamental data to pick when to enter a market?
Humans are superstitious, and Americans are no different. Nostradamus is as plausible as the existence of angels.  Drive through any small town and there will be a tarot card shop waiting for you to cut the deck.  We believe there is a genie in a bottle, we just have to find her. Those superstitions, mixed with what may be a unique American belief that with a little bit of insider know-how we can grow rich and successful, are what made books like The Secret by Rhonda Byrne a best seller in 2006.

Tuesday, June 12, 2012

Magic Formula for Trading

The Magic
Let  us assume there is a magic formula to make money in trading. Let us also assume that I know of this magic formula. So, I share it with a few of my colleagues. They share it with a few others, who share this with some more traders. Soon enough, almost all traders are making money using this magic formula. 
Hey, wait a minute. If everyone is making money, then we must ask ourselves, where is the money coming from? Who is losing?
We can conclude that there is no magic formula. 
The Magic is inside you 
Trading remains one of the biggest challenges of life. We trade because we want to achieve something more than a nine to five job.
Trading is a profession at the highest level of human competence.
The reason we love trading is:
Not the Money
It is the human urge, desire or force to grow
Markets strike at the core of our competitive and adaptive instincts
(adapted from the book: Market Mind Games)

How to trade on IIP result day

Market is ready to surprise everybody again. Everybody is expecting a good IIP number and a good numbers of people do not want a good number as it will prevent RBI to rate cut.
How should trade before and after 11:00 AM. I have observed many times that before such action, market often try to move high irrespective of global cue. It does not mean if global cue is negative Nifty will open positive. It simply means that at around 10:15 to 10:30 AM Nifty will start moving upward and as soon IIP will release at 11:00 it will take new course of action.

Market is expecting IIP figures as 1.7% . Anything less than this sound bad but it is good because RBI has a chance to rate cut. and vice versa if figures came out higher than expected. But if the variation would be much more then RBI factor would work only after discounting the result output.

Monday, June 11, 2012

First BRIC nation to lose the rating

India could become the first BRIC nation to lose the rating, the rating agency said in a statement. 
S&P cut the nation’s credit outlook to negative from stable in April, dealing a further blow to Prime Minister Manmohan Singh’s development agenda.  
Singh’s efforts to allow greater investments from overseas insurers, pension funds and retailers in the past year have been rejected by his coalition allies, dampening investments. 
The agency’s long-term sovereign credit rating on India is BBB-, one level above speculative grade. Aside from India, the BRIC group also includes Brazil, Russia and China.  
India’s factory output probably grew 1.7 percent in April, compared with a decline of 3.5 percent in March, The government will release the data tomorrow.
  
Investors has taken all these views as negetive and hence try to low down their exposure from market. Tomorrow bearish sentiment may play more actively and  further downside can not be ruled out. first support seems at 4964

Sunday, June 10, 2012

Next Week Target range

Market often moves higher when very special is expected. However this time it has already resistered this year's highest single weekly gain. Hence it may pause and trade in range of 5123 to 4964
Without fresh hope, Nifty technicals are not strong enough to move higher than 5123
Do not rush to take short position, below 4957 for this week. Nifty may surprise this week.

Nifty Diamond formation

I believe Nifty is in major channel band with strong resitance now placed at 4800 firmly. However second picture is more bear's friendly and may move accordingly if Greece election fails and RBI did not cut rate as per wide expectation.
Nifty is in making of Diamond formation this may be consider as a pause in downtrend. There is one more possibility of spending some more time in downside as diamond is not equilateral. Gap between last two lows 4720 and 4531 was of 5 months and between 4531 and 4770 is of 6 months. Hence time wise also bulls has upper hand. Still my advise is wait and watch.

Last week target achieved

Last week target has been achieved and now I believe a pause before moving wildly in any direction. After Greec election and RBI policy meeting review on 17th and 18th June respectively, market will show clear picture of trend. Till the time, my advise is to sit on cash.
Click here for Last week reading

Saturday, June 9, 2012

Nify in resistance Zone



Visit StockCharts.com to see more great charts.
Nifty has entered in the very strong resistance zone.

Sensex PE since 2000

Sensex PE suggest Indian Market is very near to it's bottom. Do not be adventurer to predict exact bottom.

Friday, June 8, 2012

Fitch downgrades Spain by three notches from A to BBB

Fitch Ratings slashed Spain's sovereign credit rating by three notches on Thursday, citing ballooning estimates of the cost of a banking crisis, mushrooming debt and a deepening recession.

The long-term rating was chopped to BBB from A and left with a negative outlook, said Fitch, swooping as expectations mounted that the Europe Union would have to throw a lifeline to Spanish banks.

"The likely cost of restructuring and recapitalising the Spanish banking sector is now estimated by Fitch to be around 60 billion euros ($ 75 billion) and as high as 100 billion euros in a more severe stress scenario," it said.

That was more than double its previous estimate that the banking sector, stricken by its vast exposure to the collapsed property market, would need 30 billion euros.

A bank rescue would also push up the state's total accumulated debt at a rapid pace, Fitch said, warning that gross general public debt would likely peak at 95 per cent of total economic output in 2015.

"Spain is forecast to remain in recession through the remainder of this year and 2013 compared to Fitch's previous expectation that the economy would benefit from a mild recovery in 2013," the agency said.

The country's level of foreign debt also made it "especially vulnerable" to contagion from the crisis in Greece, where a general election on June 17 could see the country forced out of the eurozone if a new government 


read full story at ET

Importance of 200 DMA



Visit StockCharts.com to see more great charts.
Nifty halted it's bulls run just before 200 DMA. It seems it will again respect this limit at least for today.
ADX is suggesting more consolidation with bears having upper hand. MACD is still at way to suggest buy.
My target is achieved, hence I would suggest if you are still long, keep strict stop loss.

Bears lives below 200 DMA



Visit StockCharts.com to see more great charts.
Nifty Bears lives below 200 DMA and Bulls need to cross 5076-5094
Immediate support would be 5010

Thursday, June 7, 2012

Nifty Target June 7, 2012


Sentiment is bullish for the last 3 days,
Nifty should stay at higher level before deciding further course of action
Next target or huddle area would be 5076 @ 200 DSMA
Bulls need too much power to cross it, Nifty future is trading at 20 point discount, this is not good sign for Bulls

Venus transit Sun 2012

The last Venus transit was in June 2004. But after 2012, the next one will not occur until 2117! You will have wait until way past your 100th birthday to see the next one. Want to know why?
We have been very lucky to see two Venus transits only 8 years apart! To see even one Venus transit in a lifetime is lucky timing!
Since the invention of the telescope, Venus transits have occurred in:

    December 7, 1631
    December 4, 1639
    June 6, 1761
    June 3, 1769
    December 9, 1874
    December 6, 1882
    June 8, 2004
    June 5-6, 2012
    December 11, 2117
      Check this map the Venus transit of June 5 and 6, 2012, was occur at your location.

      Nifty Resistance for 7th June, 2012

      Technically Nifty has shown great bullish strength with a long bull candle (not showing in above chart). This may continue today as well,
      I advise not to trade against the trend and one should go long till following target,with the reason to select.
      After crossing two week huddle of 4957, it has become immediate support at least for today

      5005: Upper Bollinger Band
      5035: Lower trend line
      5065 to 75: 200 DMA
      5112: 50 DMA

      Tuesday, June 5, 2012

      Why RBI is not fighting the slide in the rupee

      One of the reasons for the rupee sliding sharply against the dollar is the Reserve Bank of India’s reluctance to support the rupee by selling dollars, like it usually does during periods of volatility. And there is good reason, why the RBI is avoiding what could well turn out to be a losing battle. As can be seen from the chart, India’s import cover--the number of months of imports that can be paid for by a country's forex reserves - is at a 12-year low. The import bill has soared in the last few years, but forex reserves have not kept pace.
      Please read full story at money control

      Monday, June 4, 2012

      Dow Jones 1896 to 1912

      I come across the blog "Short Side Of Long" and found the above chart informative for our readers, You can find very much similarity between our own Sensex and Dow long term move


      As per above chart, wait till 2015 for a secular bull market to start. We can safely assume, recession has end and now depression has started for another 1 to 1.5 year before showing sign of secular bull market. Stay invested, just be careful not to add too bad stock in your portfolio. Even if it is bad you can earn profit in coming 4 years time.

      Engulfing Bear Candle on weekly chart



      Visit StockCharts.com to see more great charts.
      Engulfing bear candle with long upper tail suggest more pain in market this week. Though I believe short term bottom is very near.

      Weekly Nifty Outlook, June 4, 2012


      Nifty should be broadly range bound in 4700 to 4800 for the next two week at least.
      1. Both these levels are 200 and 300 weekly MA.
      2. Trendline also supporting the view.
      If Nifty could not close above 4750 this week then it may slide further 200 point till 4531 for a sharp bounce from double bottom.

      Saturday, June 2, 2012

      ab toh sambhal promo



      I am very happy to announce, My friend Ashit has got his first movie "Ab Toh Sambhal"
      I wish him good luck for the success of his first movie.

      Friday, June 1, 2012

      US Job Data

      US Job data released today which is way below it's expectation. Expectation was for 150K but it come out just above 50K. Dowjones reacted strongly and is trading 1.92% down. On Monday we can expect our market gap down opening.