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.

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

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

Market Update

•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.
•Irony is Western, European and Asian Indices all continue to be in uptrends so the global scenario is positive. Dow Jones has support at 11000, S&P at 1230, FTSE at 5800, Nasadaq at 2650, Dollar index in downtrend…resistance at 81.5 and 83.5
•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
•For long term investors it is best to be on the sidelines till we get some direction for the market.
•Bank Nifty is now clearly making lower tops and lower bottoms. Every rally is being sold into and is a great shorting opportunity for traders.
•IT Index continues to show the highest relative strength
•Realty continues to remain very bearish

Strong counters in the current market – HCl Tech, Sun Pharma, TCS, Hindalco

Nifty short term trend is down

Short term trend in Nifty is down. We have broken 5950 which was an important support zone for the last couple of months. We are near 50 day MA so it is expected to be volatile here. There is a massive fight going on between bulls and bears. Short term traders can short at 5950 with 6050 as SL and target of 5500. The Dollar Index may be in for an upmove which could result in equities in India heading downwards.

Nifty short term trend is down

Short term trend on the Nifty is down. We have broken the trendline that started from 5352 on 31 Aug 2010 to a high of 6286 on 14 October. 5950-60 on Nifty spot is an important support. Below that we can see a 50% correction of the upmove from 5350 to 6286 which is roughly around 5750

• Globally All western indices are bullish on an uptrend. SP500 has resistance at 1220 and support at 1040. Dow Jones has resistance at 11235 and support at 9950
Russia, Brazil, FTSE, CAC, DAX, Taiwan, Shanghai is bullish

• Dollar index seems to have taken support at 76, its got support below that at 74, needs to cross 83 to confirm it is in an uptrend. Currently it is bearish.

• We continue to remain bullish on the Nifty. The longer term bull market is intact. We are still in a pattern of higher tops and higher bottoms in the long term. If we go below 5350 that would get violated.

S&P500 Update

The S&P 500 has broken out above 1130 which is a key resistance and has stopped the progress of the S&P500 twice in the past. Short covering by the bears will move the index higher but if this rally has any lasting strength the bulls need to step in with some buying.

The next few days/weeks would be interesting to see how the situation pans out with the S&P500.

Market Update

The trend remains UP. There is a high probability that Nifty sees new highs once we break above 5550.

Auto, Banking, IT, Consumer Durables remain bullish
Telecom and Real Estate have just turned bullish
Metals has the potential of turning bullish in the near term.
ADAG continues to underperform.

Changes in Nifty

Following are the changes being made in the Nifty

Stocks going out: ABB, Idea, Unitech
Stocks coming in: Bajaj Auto, Dr Reddy, Sesa Goa

This could be bullish for the stocks coming in as a lot of ETF and Index Funds would have to buy them...Keep a watch on these counters

Nifty Update

The Nifty has closed above 5400 today. Its an important breakout from the 4785 to 5400 range and confirms the bull move as Nifty is continuing to make a pattern of higher tops and higher bottoms. If 5400 holds we should see fresh highs in the Nifty in the coming days, weeks.

Dow Theorist Richard Russell: Sell Everything, You Won't Recognize America By The End Of The Year

Richard Russell, the famous writer of the Dow Theory Letters, has a chilling line in today's note:

Do your friends a favor. Tell them to "batten down the hatches" because there's a HARD RAIN coming. Tell them to get out of debt and sell anything they can sell (and don't need) in order to get liquid. Tell them that Richard Russell says that by the end of this year they won't recognize the country. They'll retort, "How the dickens does Russell know -- who told him?" Tell them the stock market told him.

The entire story can be read here:

http://finance.yahoo.com/tech-ticker/dow-theorist-richard-russell-sell-everything-liquid-487564.html?tickers=dia,spy,xlf,%5Edji,%5Egspc,%5Eixic

S&P closes below 1040

The S&P500 closed below 1040 yesterday. So why is 1040 such an important number?

1040 has been tested four times since the rally which started in March 2009. A number which is so crucial a support once broken becomes a crucial resistance.

Also the charts of S&P500 are now forming a pattern of lower tops and lower bottoms which is bearish based on Classic Dow Theory.

If this 1040 level is not broken on the upside for the S&P, things could get further bearish for global indices in the coming weeks/months.

Nifty Update

Volatility continues in the Nifty

We are still around the region of the 200 DMA. Its normal to be volatile around this region for a bit before the bears take charge. There is a huge fight between bulls and bears at this region. Ultimately which camp wins remains to be seen but the bias is downwards.

Globally there is a lot happening:
1. Euro continues to get hammered
2. China remains very bearish
3. Korea uncertainty
4. PIIGS joined by Hungary
5. US - The Dow has broken the psychological barrier of 10000

Market has been in this region of 4900 to 5150 and the next big explosive move is going to happen once we move out of this broad range. As mentioned earlier this morning on NDTV Profit, the bias is on the downside below 5200. Above 5200+ I would look at going long.

FIIs continue to sell in May...and go away!

The market is still bearish for the short term...FIIs contine to sell in May...they have sold more than 6000 cr in May...although the market is still hovering around 5000, the global scenario is extremely weak..We can expect a panic selloff anytime in India. Going below the 200 DMA (4985 levels) in India should be a crucial level to watch out for. A selloff in the Futures market can cause a selloff in cash which can cause a further selloff in the futures market. This self - reinforcing process can cause a slide to convert to a crash something like what happened in the US on May 6.

Bubble in emerging markets?

Standard Chartered warns of a bubble in emerging markets.

Economists at Standard Chartered warned that urgent action was needed to address the potentially destabilising impact of "hot money" attracted by stronger growth and higher interest rates.

A combination of a prolonged period of low interest rates in the west and strong growth in emerging markets meant the money would continue to flow in. "The size of the flows could become more significant," he added. "There is a significant risk, even though it is a consequence of economic success."


The entire story can be read here:

http://www.guardian.co.uk/business/2010/apr/26/standard-chartered-emerging-markets-bubble-warning

Short term trend is DOWN

The short term trend is DOWN now...As long as we are below 5300 traders can remain short..

FIIs have bought every single day from Feb 26 (Budget) till yesterday...they have bought around 18000cr...yesterday they sold 755 cr...the first day of selling after Budget day

It is very interesting to watch their actions over the next few days...The Goldman Sachs scandal could be just a temporary blip...or it could be an excuse to once again trigger a flight to safety...

Now trade the S&P500 from India

Standard & Poor's Brings the S&P 500 to India

For index enthusiasts keen on diversifying and trading the US in addition to Nifty there is good news.

Standard & Poor's, the world's leading index provider, announced today that it has licensed the National Stock Exchange of India (NSE), the largest stock exchange in India, to create and list Indian Rupee-denominated futures contracts on the S&P 500 (subject to regulatory approvals).

The licensing agreement, jointly from S&P and S&P-licensee Chicago Mercantile Exchange to NSE, is part of a landmark cross-listing arrangement announced today by CME Group, the world's leading and most diverse derivatives marketplace, and NSE that covers benchmark indices for U.S. and Indian equities. The Rupee-denominated S&P 500 futures contracts will be made available on NSE via a sublicense from Standard & Poor's.

The entire details can be found here:
http://www.hedgeweek.com/2010/03/11/38506/standard-poor%E2%80%99s-brings-sp-500-india

US-China currency clash

China is resisting America's demands to revalue the yuan. America is threatening to punish China if it does not revalue the yuan. The Senate is trying to pass a legislation that would lead to duties on Chinese products.

Basically If the yuan floats, it is estimated that the U.S. will be able to have a huge growth in exports, which will help boost it's economy, and save millions of jobs.

This would create huge damage to China. America's stock market could shoot up, and China's stock market could crash.

So keep an eye on the debate this week.

Meanwhile the trend in the Nifty is UP...enjoy the ride...

The entire story could be read here:
http://www.cnbc.com/id/36009781

FII vs DII

The graph gives an idea of what the FIIs and DIIs have been doing since the budget.

FII’s have injected nearly Rs 11000 crores into Indian stock markets since Budget day the 26th Feb 2010. However domestic institutional investors (DII) money is going out of the market in the same period of time. Almost 5400 crore have been pumped out by DIIs in the same period.

FII/DII activity is a very key area to keep a watch on.

Nifty continues uptrend

Nifty continues its uptrend. The first obvious level of resistance is 5305-5310 area where it stopped on 6 Jan 2010.

Its been a surprising reversal...we were 4670 on 8 Feb 2010. But then that's what the markets are - surprising. That's why we should always follow the market and not try to force it to go the way we want. because that's not going to happen!

S&P affirms ratings on India; outlook revised to stable

The entire article can be read here:
http://in.reuters.com/article/domesticNews/idINWLB034420100318