Nifty channel breakout

Nifty has broken out of a descending channel from November 2010. This is a bullish sign. For this breakout to be confirmed has to remain above this channel for the next few days. Nifty has also crossed its 200 Day Moving Average. FIIs are buying in huge volumes daily. All this smells bullish to me. Perfect time for a bull run while the world is worried about Europe. So its time to go long if you aren't already. 5000-5100 would be a good place to keep your stops.

650 years of Historical Silver prices

Above is a 650 year graph of silver prices and silver/gold ratio from 1344 to 2004.
Source: http://goldinfo.net/silver-600.aspx

Interesting chart and good news for the bulls

S&P 500 breakdown imminent

S&P500 has held up well in the current markets compared to global indices. However there are chart patterns which show S&P500 is in a similar situation like March- April 2008. A breakdown below 1100 will further confirm this and may lead to a global sell-off in all asset classes like Equity, Commodities etc.

Nifty is now at new lows and a close below 4500 could lead to a free fall. This will of course be helped by the S&P500 breaking down. Stay Short - its a high probability, high risk-reward trade on the downside.

4500-4650 last defense for Bulls

Bulls make money, Bears make money, Pigs get slaughtered. However the few remaining Bulls on the street might get slaughtered if Nifty breaks below 4500-4650 zone. See the chart. Nifty has been falling in a neat channel from the Nov 2010 highs. A breakdown below that channel and also below the 4500-4650 confluence zone which has proved important support and resiatnce points in the past will sound the death knoll for the bulls. Its a good time to be a bear. Stay short!

Nifty breakdown from wedge...potentially bearish

Nifty has broken down from a wedge. If this breakdown sustains ie it is not a false breakdow, this is potentially bearish for the Nifty. Keep an eye on this pattern.

Nifty Update

Nifty is now in a wedge pattern...A breakout or breakdown from this wedge will give the next major direction for the Nifty

Nifty - Elliot Wave Update

Nifty is undergoing Wave 3 in the larger timeframes which started in October 2008. Wave 3 is the largest and most trending generally and should take the Nifty to levels of 15000 by 2014-5.

Fibonacci in action - Crude and Nifty

The above charts show the significance of the 61.8% Fibonacci retracement in Crude and Nifty Futures.

First Crude hit a high of around 148 in July 2008 and a low of 32 in December 2008. The 61.8% Fibonacci retracement of this fall is around 105 which proved to be a resistance for Crude in the last few weeks. In the last few days it has broken past this resistance so expect prices to rally further from here.

Nifty hit a high of 6350 in Nov 2010 and a low of 5175 in Feb 2011. The 61.8% retracement of this move is 5900 which is where the Nifty is facing resistance since the last few days.

Dollar Index in a downtrend

Dollar Index seems to have broken down from important trendlines and support levels. The trend is down in the Dollar Index which could be bullish for Equities and Commodities

Death Cross in Nifty

In the Nifty 50 DMA has crossed below 200 DMS. This is potentially bearish. But like all other things in technicals it is not a 100% confirmed indicator. We need to see Nifty breaking down below 5400-5600 range and also below 5175 before getting bearish on the market.

Right now we have been in 5400-5600 zone for over 2 weeks and so a big move in the Index is expected. Which direction it will happen that the market will guide us. So have a close eye on the 5400-5600 region.

Global Indices and Commodities Update

The risk markets (like equities and commodities) have all corrected and the risk averse markets like Treasuries and Dollar Index have been rallying as a result of the Japanese situations

Global Indices

SP500 has closed below 50 DMA and a key support zone at 1300. So it could very volatile here It has support at 1182.

Dow Jones has support at 11000.

Nikkei – obviously been devastated because of the Tsunami. It has support at 8800 but if that doesn’t hold the next support is at 7000, a level which we tested twice in 2008/09. The Kobe earthquake in 1994 led to 30% decline and stopped at a 1992 support zone of 14000.

FTSE has support at 5500 levels.


Commodities

Gold – key level to watch are 1400 and 1380…break of these numbers gives a target of 1300…and break of 1300 is very bad for gold.

Silver had strong resistance at $19 which it took out in july 2010 . Silver could reach a target of $39-40 but its becoming a crowded trade as everybody is bullish so its time to be a bit careful.

Crude Oil – the next support is at 96$..which is 50% retracement of rise from $85 to $107

Base metals – have all corrected below support zones and are expected to be sideways with a downward bias till the situation improves.

Nifty Update

• Longer term trend will turn up if we close above 5800 and turn down if we close below 5175
• Intermediate trend will turn up if we close above 5600
• FIIs have stopped selling in a big way so that’s a positive

Cardamom bearish, support at current levels

Cardamom is in a downtrend. But we have support at current levels of 1050. We might see a small bounce from these levels. But the larger trend is downwards.

Nifty Update

From a longer term perspective the trend is downwards. As per Dow Theory we got a sell signal at 5700. When do we get a buy, when we start seeing higher tops and higher bottoms which I feel will take some time to happen.

From a short term perspective while we are in this 5175-5589 zone we could be rangebound but if we breakdown below 5175 it is very weak for the market. 4800 is the next support which we hit in May 2010.

We have resistance at 5550-5600 zone. Time to be cautious, I would get bullish on the market if 5589 is taken out comfortably on a closing basis.

FIIs continue to sell.

Budget will provide a trigger, so let us wait and see how the market reacts rather than initiating any trades now.

Nifty Futures Update

• Nifty is in a short term uptrend now
• Nifty seems to have taken support around the 50 week EMA
• 50% retracement of fall from 6350 in Nov 2010 to 5180 in feb 2011 is 5770, 38.2% is 5632.
• Fallen a large amount so retracement s happening
• 5550 is an important number to be taken out
• Whether this uptrend is sustainable we will have to evaluate later

Nikkei 225 in an uptrend

The Nikkei is in an uptrend. a Cross above 11428 will urther confirm this uptrend. Watch out for action on the Japanese Index

There is always a bull market somewhere

There is always a bull market on somewhere. The chart above shows the upward trend in Castor Seed traded on the NCDEX. That is the main adantage in trading a variety of asset classes - some assets are always bullish. Diversification is the only free lunch on the Street!

Nifty update - bears are back!

• As mentioned a couple of weeks ago Nifty has broken down below the 5700-6200 range after testing 5700 a few times in the past. Also in doing so it has created a new lower bottom and thus has given a Sell signal as per Dow Theory.
• FIIs continue to sell.
• 5300-5450 is the zone it broke away from before the huge rally to 6300 so this zone should provide support
• Rather than watching for specific zones one should keep an eye on the FII figures. As long as they continue to sell one cannot expect a sustainable bounce back in the nifty
• We are near the 200 DMA which is a zone where there is massive fight between bulls and the bears to decide the next direction. So it is choppy and expected to be choppy for the next few weeks
• It best for investors to be on the sidelines till we get some direction for the market. Trend would change if we go above 5750 and thus create a higher top
• Traders should wait for the the next rally to short the market rather than shorting now

Crude Oil Update

Crude Oil is near the Fibonacci 50% retracement from the mid 2008 high of 6370 to the December 2008 low of 1940. If we remain comfortable above this 4100-4200 zone then the next stop is the 61.8% level of 4670.

Nifty below 5700, bearish

Nifty has broken down below the 5700-6200 range after testing 5700 a few times in the past. Also in doing so it has created a new lower bottom and thus has given a Sell signal as per Dow Theory. FIIs continue to sell. All this shows a high probability of Nifty heading lower.