A correction is offing

FOLLOWNG IS THE VIEW FOR THE COMNG WEEK FOR 11^TH JULY TO 15^TH July 9, 2011

MARKET TOPPED DUE TO DOWNWARD TREND LINE AND 200 DAY SMA.

ALSO SHORT TERM OSCILLATOR ENTERED OVERBOUGHT AND CORRECTION NEEDED TO MAKE HEALTHIER.

UP MOVE STARTED FROM 5180 LOW HAS ADDED 578 PTS AND ENDED AT 5670 IS NOW PONTING DN FOR SHORT TERM. NEXT WEEK IS LIKELY TO BE BEARISH AND TRADE SHORT IN A WEAK TONE AFTER MONDAYS OPEN.

NOTE: THE OVERALL TREND IS TURNED BULLISH SINCE 5180 LOW. WE CAN CALL IT AS IMPULSE AND IT HAS JUST COMPLETED 3^RD WAVE OF LARGER 1 ST IMPULSE. SO THE COMING CORRECTION WILL BE A CORRECTION WITH THE MAIN TREND (WHICH IS UPWARD). HENCE AFTER THIS CORRECTION MARKET WILL MOVE TO NEW RECENT HIGH. The pattern, economic scenario and other sentiment condition reveals the classic chart eristic of wave I which is as under:

Wave one is rarely obvious at its inception. When the first wave of a new bull market begins, the fundamental news is almost universally negative. The previous trend is considered still strongly in force. Fundamental analysts continue to revise their earnings estimates lower; the economy probably does not look strong. Sentiment surveys are decidedly bearish, put options are in vogue, and implied volatility in the options market is high. Volume might increase a bit as prices rise, but not by enough to alert many technical analysts

 

PRODUCT	CLOSE	DIRECITON	SL	TGT
NIFTY	5672 FO	Up matured Down started	5720	5539 and 5470 before 22nd
BANK NIFTY	11278	Up Matured Short –term down	11460	11026 and then 10895
REALITY IND	296.50	Turned up in weekly May correct mild in daily correction	277	318 to 325 in 2-3 weeks time. Accumulate stock in this sector.
FMCG	10302.55	DOWN started	10500	Sell fresh below 10280 for TGT of 10000 to 9800
INFRAST	3146.80	NEAR RESISTANCE AREA	3190 FOR SHORT TERM FOR LONG 3080 SUPPORT	EXPECT GOOD OLNLY ABOVE 3133 SUSTAINS.
MIDCAP	8112.90	LOOKS MORE STRONG BUT YET TO RENDER BUY SIGNAL IN WEEKLY.	8026 IS KEY LEVEL TO WATCH FOR MID CAP	ABOVE 8200 EXPECT 8600 +
AMBUJA CEMENT	126.10	DOWN	133	115 TGT
AXIS BANK	1306.55	DOWN	1340	1286 OR 1270
CENTURY	365.95	DOWN	378	355 OR BELOW TO BUY
LIC HOU	216.55	DOWN MATURED NEAR PR BOTOTM.	BUY ON DEEP BELOW 211 OR LOWER	BUY BELOW 211 OR LOWER OR ABOVE 226
SOBHA	285.40	UP	270	310 OR EVEN HIGHER
GMDC	159.00	UP	150	167 AND 176
SAIL	136.10	DOWN	144	128 OR LOWER
HCC	34.05	32.30	UP	39 AND 44

Some of the companies i like and should be under scan are

*VA Tech Wabag Ltd Buy on declines this technology focused company for target price of Rs1800 in medium term.

*Bliss GVS Pharma Ltd Excellent growth in the last two years and good prospects makes the stock good medium term investment for target price of Rs35.

*Elder Health Care Ltd. More upside expected

*Grabal Alok Impex for short term gains.

*SSPDL (erstwhile Srinivasa Shipping),

*Vadilal Enterprises and Ador Welding on the radar of savvy players.

In Next 24 Hours Market Will Give Direction.

Some time it becomes difficult for me and most of the analyst to identify incoming trend. Lets took the recent scenario. Market moved up smartly from 5195 low to 5705 high in just eight day. The move was aggressive fast and intensity was so high that before anybody can think of making entry move got over. Now it is taking rest. Just cool down process is on.

Ø  Certain price pattern must develop which lead to the specific trade actions I recommend to enter or exit a market. Given our current “forecast” we are in the target zone for a culmination top in overall stock prices. Our next step is to stay abreast of any potential sell signals which could be given based upon our “trading rules”. To repeat, in order for us to recommend a trade action, a buy or sell signal can only be taken if it occurs in tandem with the market having reached a projected target zone base upon a forecast.

PRICE PATTERNS WHICH PROVIDE SPECIFIC TRADE ACTIONS.

HEADING FOR SUDDEN DROP IN PRICE.

·         When I select my swing trading and along with dynamic time zone tool it gives me more clear thought on my analysis.

·         Let evaluate the present condition now.

·         Now once again if you look at the last 10 days started from 5195 then you will notice that one swing terminated at 5706 high and then it has made a twice at 5609 area and then top is lowering. In other words bottom is flat and top is declining indicates clear change in trend and violation of 5610 is offing. As I was insisting that below 5600 we will be observing fast decline up to 5555, 5531 5477 are the 3 important support of Fibonacci zone.

Ø  

·         The down swing started from 5944.45 to 5195.90 with perfect down 5 wave and swing reversal took place upon surpassing 5377 level. The retracement value for the same was 5665 for 0.618% but some time it can retrace even 0.72% in most aggressive market condition. The rally lasted for8 days and 9^th was a turning day. So using time zone it should correct 3 to 5 days time. Nifty is consuming more time in correction. Now I know one thing that it is most difficult to trade when correction is on. 

·         According to my calculation NIFTY made an advancement of 511 points so by virtue of low it has an authority to correct 0.382% i.e. 5566 but it is now going below 5600 lvl. Now it will try to misguide you I am sure it will go below 5600 and it will make all of you to panic selling and sudden chance will be observed. According to me considering “ABCD” pattern “A” and “B” is completed while “C” is in progress. Then another round of 500 points expected after formation of “C’ classification. So in that case I can say that if it turns from 5566 then add 511 to that will give TGT of 6077 as the next tentative TGT upon surpassing 5710. So wait and watch for the market to give signal. You can buy aggressively above 5710 for the TGT of 6077 levels.

On the downside PSR is at 5429 while mid point of cradle is at 5450 with ADX in bullish mode

My NIFTY trading view is as under.  



POSITION TRADER: EXIT LONG(suggested yesterday) > SHORT TERM OSCILLATOR RENDERS SELL and Risk taker can sell with SL of 5710.  FRESH SHORT BELOW 5600.  After short cover the same at 5566 and 5511 area. In any case no sort below or near 5511.

RISK TAKER CAN SELL NOW WITH SL OF 5680 SPOT FOR TODAY AND 5713 FOR POSITION.

RE-ENTER FRESH LONG ONLY ABOVE 5713 IS SURPASSED.

Ø  Technically: Nifty topped at 5702 level this is 3^rd day it remained within the range of topping day. (i.e. between high low when market topped). This is again a unique phenomena as EMA is rising and +ve, PSR rising and +. ADX is progressing in +ve while RSI and STK shor spand time period is overbought and rendering sell.

Ø 

Ø  Conclusion: Some time it remains in side wasy after smart rally or some time it remains in side ways and then suddenly turns weak. In our case weakness will come below 5605 lvl is breached.

Ø  Cash segment is rocking but be cautious in selection.