DON'T SELL AT OR BELOW 6060 ITS TIME TO COVER SHORT

n  The equity market generates an endless series of folk myths – snippets of conventional wisdom that supposedly reveal how traders think and thus how the markets will react.

n  You know: “sell in May and go away.” “Always buy new highs.” “Bulls make money, bears make money, pigs get slaughtered.” And many, many more.

n  The current folk myth concerns the “January effect,” the prediction that if the first week in the New Year is green the rest of the year will be green too.

n  Maybe, maybe not. But this year there was a strong attempt to make sure the first week closed positive … and it almost failed. The extraordinary effort required to eke out a very modest advance on Friday afternoon testifies not to the market's strength, but to its weakness.

n  So much so that we are now calling for a decline this month, especially in the segment that interests us, the NIFTY AND SENSEX.
The rest of the year may be green; but we see a real possibility the SENSEX AND NIFTY already breached its December lows around 20568 and 6129 before January is out. This is a danger sign now indicates that the market is topped out for the first quarter of 2014.  
This should not be very surprising. After an almost unprecedented rally in December – up with selected stock snatch both the index in to NEW high – a retracement was virtually baked in the cake. And Thursday afternoon's push to close positive was a clear attempt to manipulate investor sentiment.

n  By Monday the reversal is due and some suckers rally or bull trap of kind move is likely to unfold. Today being expiry day of JAN 2014 probably it will make a temporary bottom near 6080 to 5980 (being important swing low and daily chart is now in the oversold territory) looks obvious: it was the worst single week in Indian equity indices since August, and all are now negative for the year. The price action (see the chart) was extremely bearish.

n  This week we may see consolidation, with 6250 to 6220 max as major resistance levels. But the support has fallen to 5980 to 6080. If we see a bounce in the early session Thursday after a weak open we will be looking for short entries at higher lvl say around 6250 area. However on Thursday open is weak say gap down below Wednesday’s low and trades above that low then a smart bounce will take place or if it continues its downward journey 5^th consecutive day then from Monday a bounce will start. We are of the opinion that avoid stock which moved down along with the NIFTY and buy on decline stock which resisted to go down with the NIFTY. As their individual trend is considered as +ve.

n  Note that our longer-term outlook is still bullish. A healthy correction in a requirement for another leg up in the bull market. But for the short term the smart money – and ours – will be looking for ways to get short if NIFTY closes below December low.

n  In the above chart just see a downward parallel trend channel which as a support area at 6060 as mentioned yesterday and now oscillator is also entering in to oversold area indicates that the bottom is near and selling short at lower lvl say around 6080 or lower will be a dangerous affair.

n  NO short pl now and cover 100% short near or below 6080 lvl.

BANK NIFTY CLOSED 10437.65: DN -0.81%. Trend is down, swing is down and flow is down.

Now we have reversal lvl at 10660, support at 10100 due to support line of downward slopping parallel trend channel and now oscillator entered in oversold area indicates some bounce must come. Expect change in mood above 10660, more sustainable rise above 10880 while down side support is at 10350 area. Daily and weekly chart entering in oversold hence avoid fresh short.

Trading idea for FEB MONTH CONTRACT:

·         BHEL: RS 162.30. BUY FOR POSITION LONG AS STOCK HAS BEEN OBSERVED IN ACCUMULATION PHASE SINCE 2^N WEEK OF DECEMBER. CLOSE ABOVE 172 WILL GIVE PRICE TGT OF RS 200 IN THE MONTH OF FEB.

·         DENA BANK: Rs: Rs 54.40. Buy with SL of Rs 51 for swing trade and delivery. Stock can move further up to Rs 58 to 60. Close above 58 can bring more surprise.

·         VIJAY BANK: Rs: Rs 41.85. Buy with SL of Rs 38 for swing trade and delivery. Stock can move further up to Rs 48 TO 52. Close above 43 can bring more surprise.

·         DISH TV RS 48.35: ACCUMULATE FOR DELIVERY AS STOCK SEEMS TO BE BOTTOMED OUT AND CLOSE ABOVE 50 SHOULD GIVE TGT OF 56 TO 60

·         SUNTV: RS 355.50. INITIATE BUY ABOVE RS 360 FOR TGTOF 380 TO 390.

RBI DISAPPOINTS MARKET MEN

n  In the above chart just see a rectangle pattern was formed and on last trading day it has just closed nar the support area (while horizontal line). Also day was like a DOJI with minor bearish candle.

n  If we look at various indicator then it is placed like: 13 DMA, 6274, 50 DMA 6241, 200 DMA 5980, ADX in sell mode, RSI and STK% is in oversold while ST is at 6263 for daily and 6195 for weekly. MO is at 6363 while WO is 6178. First imp resistance is at 6178 and then 6218 lvl.

n  The weekly RSI is at half way and placed at 40.42, while daily is at 22.47.

n  STK% is at 24 while MACD is at 1.35 area. The volatility indicator now at -2.02 and in the past when panic came it arrived is moved up from -2 to -0.14 moved away from extreme bearish lvl. Indicates bounce should take place.  

n  The overall picture is bearish as it has opened with bearish gap in weekly and trading below EMA and Swing is bearish. Unless it trades and close above 6260 area.

n  As per my long term chart as I said earlier we have been topped out at 6480 and progressing in a corrective move in long term structure. In first quarter of 2014 I don’t find chances of moving above 6480 recent peak.

n  Our long term probable TGT for the first quarter is 5955, 5794 as the near term TGT lvl.

n  Strategy: Cover short around 6060 or if open is weak below yesterdays low and trades above 6150 lvl. Expect further bounce.

n  On higher side 6210, 6266 are important key resistance lvl. While Fibonacci of last move is 6229, 6255 and 6282 are the key ratios.

n  Position trader stay short with SL of 6330 and final 6360 as the key reversal lvl.

n  SECTOR UPDATE: Metal index made a bottom at the previous GAP area and turned with strong swing reversal. Expect further up move. Minor hurdle is at 2405. Realty turned up from deep oversold lvl and this could give bounce only and not expecting much change in medium to long term. Commodities index also showed some improvement due to highly oversold value. While FMCG is passing through consolidation and currently at its strongest support area. Close above 17000 lvl you can expect further bounce and probably resumption of uptrend. Small cap index turned bearish so be cautious in stock of B group of small cap section. Media is entering in larger corrective decline as its weekly index is turned down. It can resume up trend only above 1751 on closing basis. IT sector from last 2 weeks we are giving warning and be cautious approach. Any rally in IT sector should be used to unwind investment for short term to medium term a small to large correction is offing. Pharma sector is becoming ill and may go to bed for to have glucose. Keep taking exit from any bounce. Banking and PSU banking both are in a deep red area and need more tonic or some fresh events to revive.

n  STOCK OPTION SEGMENT: FRESH LONG BUILD UP IN: HDIL 6.57%, APOLLOTYRE 5.92%, FRL 3.99%, GLENMARKET 3.99%, TATA STEEL 3.47%, SAIL 3.11%, DABUR 3.03%, PFC 2.93%, RANBAXY 2.63% (MAY BE CORRECTIVE RALLY OR SHORTCOVERING IS UNDER WAY), HAVELLS 2.46%, UNITECH 2.44%, AUROPHARMA 2.40%, UBL 2.21%, SSLT 2.15%, RECT 1.89% AND BHEL 1.89%. WHILE FRESH SHORT BUILD UP IN MARUTI WITH -9.27% HIGHEST AMONGST WEAK SHARE, THEN BETWEEN 2. TO 5 IRB, IDEA, UPL, AXISBANK, ABIRLANUVO, LUPIN, SUNPHARMA, DIVIS AND SIEMENS WERE MAIN LOOSER. WHILE SOME LONG UNWINDING OBSERVED IN CIPLA, INFY, TECHMAHINDRA,

BANK NIFTY CLOSED 10554.20: DN -0.30%. Trend is down, swing is down and flow is down.

Now we have reversal lvl at 10725, support at 10330 as anticipated in last mail and now oscillator entered in oversold area indicates some bounce must come. Expect change in mood above 10850, more sustainable rise above 11050 while down side support is at 10480, 10350 area. Daily and weekly chart entering in oversold hence avoid fresh short. Above 11050 we can see 11115, 11314 at the most.

Trading idea for FEB MONTH CONTRACT:

·         Apollotyre: Rs 111: Stock is trying to come out from bearish grip. Oversold status calls for a strong bounce. Buy and hold with SL of 106. Close above 112 should give probable TGT of 118.

·         AUROPHARMA: Rs 423.05. Turned neutral and closed below its EMA and remains above support area of 413. Either buy above Rs 424 or sell below Rs 410. At present it is in NO trading zone.

·         GLENMARK: Rs 558: If you have observed from last 3 days stock was appearing in OI build up list and in just 2 days stock flared up almost 8% in 2 days. Now it is closed above its resistance giving indication of free bird. Buy on deep only and stay long with SL of 532. Close above 555 can bring more attraction and miracle in the price.

·         HAVELLS: Rs 750: The basic structure is bearish but due to oversold condition a bounce is emerging. Buy only for bounce with strict SL of 738 and look profit 50% at 757 and another at 765 area. Above 765 try your luck with progressive SL.

·         HDIL: Rs 43.95: Stock is neutral and just showed bounce due to very wide bearish candle on previous trading day. Bounce may continue but unless it close above 47 do not get tempted to create long for position or swing trade.

·         HINDALCO: Rs 114.90. Stock is having very strong support at Rs 111 area and resistance at Rs 116.50 area. Further strong up move can unfold above Rs 116.50 on closing lvl then expect 122 and 125 as the near term tentative TGT.

·         DENA BANK: Rs: Rs 54.40. Buy with SL of Rs 51 for swing trade and delivery. Stock can move further up to Rs 58 to 60. Close above 58 can bring more surprise.

·         UPL: Rs 186.65. Stock turned weak and further damage is expected after a bounce up to Rs 174. A price lvl where one can think of making long. At current price you may observed bounce but avoid long for position or swing long.

·         TECHMAH: Rs 1756: Stock is moving away from up trend and further damage is expected. SELL with SL of 1804 and stay short for TGT of 1728 and 1700.

·         HDFC AND HDFC BANK both are loosing momentum hence be cautious in this stock if you are making long.

Control Your Emotions in Trading !

Traders who cannot control their emotions will rarely make any successful trades and will quickly join the 95% of traders who lose money consistently.

The three emotions that traders suffer from are; fear, hope and greed. To be successful you need to suppress these emotions, banish them like demons.

All these emotions are detrimental to making money and being a good trader. Some traders even have all three emotions at some point in time. So how can a trader suppress these emotions?

Firstly, don't take high risks by trading more of your capital than you should. A rule of thumb is to not risk more than 5% of your capital (MAX) on any one trade. If you keep to that rule there is no chance to lose all your capital.

Make a plan and stick to it. Make yourself a set of rules and keep to them. For example if you have a rule which says that your risk reward ratio is 1:2 or 1:3 then keep to it. You'd be surprised how many traders reverse their risk reward ratios.

ENJOY TRADING. 

ONE MORE SAFE BET AND GOOD OPPORTUNITY FOR SHORT TERM TO MEDIUM TERM. INDI GLYCOL: RS 106.55:

Approaching towards support of 6080 lvl. Cover short and wait for next trade. Avoid fresh short now may get trapped.

Ø  Conclusion with respect to last trading day. 

Ø  We are in SELL mode in NIFTY since 5^th November once it breached its 6348 low and now we are below its 10 double EMA placed at 6360. 

> Cover short as we are now at the imp support area of 6080 lvl and wait for the next trigger. Trading above 6190 Future and 6145 spot will indicates down move is paused or over. 

Till that time now it’s a no trading zone. Cover short near 6080 and wait for the next trade. In last 5 days we have been observing consistent 3 black crow bearish pattern. 

Today, 6160 is the crucial intraday level for Nifty.

If Nifty sustains below 6160 , then it could test 6080 and below that level it could test 6030. 
Instead, if Nifty trades above 6160, then it could test 6190.

NIFTY TOPPED OUT FOR SHORT TERM ONE LEG OF UP MOVE IS OVER: EXPECT 6054 OR 5900 AS NEW DN lvl

As expected NIFTY is now entering in SELL mode: Major Big hurdle is now 6250 and last one 6354.
A small rising wedge is emerging on 90 min chart indicating short term outlook weak.
Fresh short below 6170 close with SL of 6225 as SL.
And remain short.
SELL BHEL, DIVIS & TCS turned weak. SELL on rally 

Nifty Completed Crucial Fiboancci Corrective Rally For strong up gain need to surpass 6010 lvl Near term Support is at 5754.

Ø  Nifty competed its 0.618 corrective rally of last decline 6174 to 5754 area in just 3 working days and on Friday a pattern called DOJI is formed. Now it is a trend deciding area. Again now trading below 5920 will have some pressure and unwinding of long while close above 6010 will create problem to short trader and they will come to cover the same.

Ø  On little larger picture structure is very strong and stay long with SL of 5754 as your important stop while to protect trade even you can have SL of 5800 as near term SL

Ø  Since the structure is of mix bag and not showing any perfect clue we have to shift or take help of oscillator. The weekly and daily oscillators are +ve and moving towards overbought area with values at 38.18 in daily and 79.06 in weekly time frame.  

Ø  Major hurdle on higher side is around 6170 to 6180 where maximum profit booking is needed to do. While 5798 is breached we can expect the downward move will get acceleration.

Ø  The analysis can be wrong so protect your long with 5800 lvl

Ø  The speed of this move will be a wonder to watch

Ø  Point of recognition will come at 6300 when fundamental and technical views will be the same. And novice trader will enter in the market with left out feelings.

Ø  Chances of making higher bottom against 5754 after surpassing 5900 or 6000 may be observed.

Ø  That will be a golden opportunity once In a life time to buy if our analysis is right

Ø  Stay long in nifty, bank nifty and Dow.

Ø  We recommend to stay long  only and avoid short even if sell signal comes.

Ø  Be more aggressive on long above close of 6010 lvl.  

Strategy: STAY LONG ONLY AND BUY ON DECLINE WITH PROPER SL FOR TRADE AND RIDE with SL of 5800 lvl.

·          Strength lvl is turned up from 14.71 to 26.33 on daily and 79.44 from 76.14 in weekly time frame.   

Very strong RESISTANCE is at 6010 and then 6180 and support 5920, 5800 and 5729.

Bank NIFTY:

Closed at 10218 UP BY 3.47% on day basis:  An up trend is started and likely to progress till BN is above 9960.

  

Ø  For long term time frame: Monthly chart: Negative divergence in the oscillator indicates that there is a lack of interest at higher lvl as price moves above. The trend deciding lvl for the Bank NIFTY is 10240 and resistance area is at 10340, 10630 and 10890. While important support is at 9980 below which 9450 is expected.

The recent bounced back from 8500 levels and retraced more than 50% of the previous down move.  Failure to sustain at higher levels indicates that recent bounce was just short covering and major trend remains same.

Ø  After sharp bounce in Bank nifty many market participants had an impression that index had completed down move and started the next move on upside. However, sharp reversal from the middle of trend has left with probable scenarios as per Elliott wave counts which is shown below As can be seen from the chart above all the oscillators are trading below their respective averages. And once the levels of 5,811

Ø  A correction of entire up move from 8349 to 11287 is over with almost 50% correction.

Ø  Even Bank NIFTY corrected jus 0.618% of the last decline and now important resistance is at 10500 and major upthrust can be observed only if it close above 10500 lvl.

Ø  Also EMA is which turned weak is turned flat and placed at 10160/10236.

Ø  THE ST is likely to act as temporary resistance area but likely to surpass in the coming days. It is now at 10379 and 10477. Once this lvl is surpassed a free ride to new high will be observed.

Ø  Long trader should get more active only above 10500 is surpassed.

Ø   

BANK NIFTY: IS IN BUY MODE WITH SL OF 10100 LVL ADD MORE ABOVE 10400 AND THEN 10500. 

I anticipated bottom around 5770 support area Now Buy Buy and BUY nifty and Bank Nifty with SL of recent Low

Nifty Technical Update:

Minute Observation as under:

Ø  My daily chart rendered swing reversal with “Harami Black” Candlestick chart pattern.

Ø  In the weekly chart a perfect sub wave which I was expecting when market was in the toping out formation: Now that sub wave is formed and getting ready for a big move to cross 6174 recent high.

Ø  D-channel support area is at 5715 and 0.382% of the previous rise comes around 5767 FO price. Both achieved and turned back because of daily oversold area.  

Ø  Now 5767 is almost reached with STK% at its lowest lvl after 5108 low. This is nothing but indicates underlying strength is very strong. Trading or close above 5840 will give min TGT of 5914, 5964 and 6014.

Ø  Since we observed 5 up and 3 down wave so my strong feeling is that we are now entering in a best part of the trader’s wave called as 3^rd wave. The intensity and speed will be very fast and strong. Avoid short sell in this area. Or will get caught badly and may have financial hazard.

Ø  My 240 min chart STK% is rendering buy signal and turned up from oversold area. While nearest resistance is at 5898 and 5915.

Ø  After observing 5 wave rise (up move) now we have observed 3 wave decline with 38% correction of the last entire up move.

Ø  My turning day was 30^th and Market made a bottom on that day and on first it turned up giving a clear clue that buy with an SL of low made on 1^st October.

Ø  Very crucial juncture in world financial markets and in the past in such instances market has shown a wave 3 with best return on investment.

Ø  I think my perception is that we are again starting a strong up move in the coming days. I will prefer to buy with SL of 5600 and accumulate calls of 5800 to 5900 till it is below 5850. Once it surpasses 5850 then take a heavy position in 5900, lesser position in 6000 and some position in 6000 call.

Ø  Add more if by chance you get and opportunity to buy around 5650 or 5600 area. Which according to me seems to be very low.

Ø  If calculation and wave structure is right then in this month only we will see a new high surpassing 6200.

Ø  The analysis can be wrong so buy 5800 calls and use capital what u can loose

Ø  The speed of this move will be a wonder to watch

Ø  Point of recognition will come at 6300 when fundamental and technical views will be the same. And novice trader will enter in the market with left out feelings.

Ø  Chances of making higher bottom against 5754 after surpassing 5900 or 6000 may be observed.

Ø  That will be a golden opportunity once In a life time to buy if our analysis is right

Ø  Stay long in nifty, bank nifty and Dow.

Ø  We recommend to close shorts once it trades above 5860 lvl. 

Strategy: COVER SHORT and go long heavily with SL of 5750 lvl.

·          Strength lvl is now 14.71 on daily and 76.14 in weekly time frame.   

Very strong RESISTANCE is at 5860 and then 5995 and support 5770  and 5729 and last 5640 key supports.

Bank NIFTY:

Closed at 9959 UP BY 2.67% on day basis:  A CORRECTION IS OVER AND BUY ON DECLINE OPPORTUNITY STARTS.

  

Ø  Only swing reversal and Strength oscillator renders buy. MACD Histogram indicates no more panic is expected hence buy on decline should be a strategy.

Ø  Trading above 10250 will rendere fresh and strong buy signal.

Ø  A correction of entire up move from 8349 to 11287 is over with almost 50% correction.

Ø  Also EMA is turned weak and prices are below its EMA and now at 10274/10383.

Ø  THE ST is now at 10379 and 10477 which is likely to be strongest resistance in the next up move. Once that lvl is surpassed a free ride to new high will be observed.

Ø  A sub-wave formation is in the making while daily chart is entered in oversold area.

Ø   

BANK NIFTY: IS IN BUY MODE WITH SL OF 9600 LVL ADD MORE ABOVE 10000 AND THEN 10300. 

i)             Aurobindo: Rs 211.35. Our buy call continues now SL is 203. Fresh buy near Rs 207 TGT for the week is 215, 221 and 228. Ride on the move and stay invested or long.

ii)            CENTURY: Rs 248.50. Stock re-entered in long or up trend. It has made a higher bottom at 239.60 against 236.40. Buy and hold with SL 232 TGT is 255 and 261. Stock is forming a symmetrical and breakout from rs 255 will take fast to 265 or higher.

iii)           AXIS BANK: Rs 1053.30. stock has made a bottom at 1002 and another bottom at 1001 and on last trading day some strong reversal formation on daily bar chart observed. Buy with SL of first stop of 1028 and major support at 1001. TGT of 1068 and 1082

iv)           Exide Industries: Rs 136.20: Buy with SL of 132 for the TGT of 141 and 145. Close above Rs 137 will attract more buyers and stock may show a rocket move.

v)            DLF: RS 138.10: Fresh buy signal observed on last trading day. Buy and hold with SL of 133 and look for the TGT of 145 and 151.50.

vi)           IBREAL: RS 56.55: INIITATE BUY ABOVE 57: SL RS 54 TGT  rs 59.90 and 61.80.

vii)          ICICI: RS 918.60; Buy as stock has made a bottom at Rs 885. Buy with SL of 895 and look for the price of Rs 932 and 946. Close above 857 will have strong up move up to 969 to 983.

viii)         INDUSIND BANK: RS 387.30. Buy with SL of 374 for TGT of 403 and 416. Stock will move with speed once it trades above Rs 392.

ix)           MRF: RS 14045: Buy and ride with SL of 13600 TGT is Rs 14560 and 15005.

x)            TATAGLOBAL: Rs 151.45: A strong buy is observed and buy with SL of 145 for the TGT of 161 and 164. Close above 155 will have strong upward move.

xi)           YES BANK: Rs 298.80. Initiate buy above 303 and ride. Your SL would be Rs 295 TGT is 314 and 325.

INVESTMENT BUY: SPARC RS 131.95. SL RS 125 AND RIDE ADD MORE AOVE 137 IS CLOSED.

BALLARPUR: RS 10.60. BUY ABOVE 11.30 AND ADD MORE ABOVE 12.50 FOR TGT OF 18 TO 20.

FOR LONG TERM: BUY BH FORGE, BHARTI AND IGL ON EVERY DECLINE STOCK IS ENTERED IN MAJOR UP TREND.