Bulls fighting hard . . . Book part profits

Hi All,

As expected, though markets fell down after a disappointing Monetary Policy, rallied today and are up by more than 80 to 100 points from the initiation near 8140-8150

Nifty now trades near a resistance of 8250-60 levels and short term traders are advised to book part profits and trail stop loss below 8050, medium term outlook will be buy on dips with strict stop loss below 7900 levels….

For any further upside Nifty should give a weekly close above 8250-60 levels tomorrow in order to march towards the higher levels of 8400-8600

Cheers

Ray of Hope ! ! !

Hi All,

Ray of Hope  -

Though Nifty broke the recent swing low of 8000 and slid further towards 7900 levels, however has taken support near those areas and the now the Weekly hammer triggered for Nifty above 8125.

Nifty can rally upwards and can said to be have created a short term bottom if it sustains above the said levels 8125...8155... 

Reasons - (Please refer the chart below)

Weekly Hammer

Weekly RSI has taken support near 40 levels

Nifty has broken out from a falling Wedge pattern on hourly charts which is another ray oh hope....

Positional Traders can initiate long trades (advisably above 8155) with strict stop losses below 7900 levels. On higher side Nifty can eye levels of 8300-8460-8600...

Cheers

Bottom fishing ! ! !

Hi All,

As expected, markets celebrated the November  Fool’s  days and drifted down badly till around 8000 levels, though there was a bounce of ~ 5-6% from those levels, the same was not sustainable and Nifty currently again trading near the supports 8000 levels.

On the daily charts, Nifty is trading in a highly oversold zone with RSI being as low as 25-26 levels, since a strong and sharp bounce was seen from the 8000 levels, we can expect these levels to hold on at least for short term.

However, broadly looking at the recent fall in markets suggests that the midterm bullish trend is at a risk now and any bounce can only be short term in nature unless some key levels on higher side are not surpassed.

Traders are advised to take a long trade @ CMP of 8060-8080 with a stop loss of around 1% below 8000 levels and targets 8150-8210-8280

Cheers

Update - 12.54 PM 18th November

Hi All,

As expected Nifty bounced back and is up by almost .5% from the initiation levels, day traders can either book profits near the resistance of 8115-20 or trail their stop loss.

Nifty, once sustains, 8120 can then head for further targets mentioned earlier….

Cheers

Decoding the ban on Rs. 500 and Rs. 1000 notes

Hi All,

Got this nice forward for depicting the bold decision yesterday taken by the Government.

Also please read the FAQ's answered by RBI by clicking here

Forwarded message as received - (Looks authentic based on the RBI story above)

Frequently Asked Questions (FAQs) on Withdrawal of Legal Tender Character of the Old High Denomination Bank Notes

1. Why is this scheme?
The incidence of fake Indian currency notes in higher denomination has increased. For ordinary persons, the fake notes look similar to genuine notes, even though no security feature has been copied. The fake notes are used for antinational and illegal activities. High denomination notes have been misused by terrorists and for hoarding black money. India remains a cash based economy hence the circulation of Fake Indian Currency Notes continues to be a menace. In order to contain the rising incidence of fake notes and black money, the scheme to withdraw has been introduced.

2. What is this scheme?
The legal tender character of the notes in denominations of ₹ 500 and Rs1000 stands withdrawn. In consequence thereof withdrawn old high denomination (OHD) notes cannot be used for transacting business and/or store of value for future usage. The OHD notes can be exchanged for value at any of the 19 offices of the Reserve Bank of India or at any of the bank branches or at any Head Post Office or Sub-Post Office.

3. How much value will I get?
You will get value for the entire volume of notes tendered at the bank branches / RBI offices.

4. Can I get all in cash?
No. You will get upto ₹4000 per person in cash irrespective of the size of tender and anything over and above that will be receivable by way of credit to bank account.

5. Why I cannot get the entire amount in cash when I have surrendered everything in cash?
The Scheme of withdrawal of old high denomination(OHD) notes does not provide for it, given its objectives.

6. ₹4000 cash is insufficient for my need. What to do?
You can use balances in bank accounts to pay for other requirements by cheque or through electronic means of payments such as Internet banking, mobile wallets, IMPS, credit/debit cards etc.

7. What if I don’t have any bank account?
You can always open a bank account by approaching a bank branch with necessary documents required for fulfilling the KYC requirements.

8. What if, if I have only JDY account?
A JDY account holder can avail the exchange facility subject to the caps and other laid down limits in accord with norms and procedures.

9. Where can I go to exchange the notes?
The exchange facility is available at all Issue Offices of RBI and branches of commercial banks/RRBS/UCBs/State Co-op banks or at any Head Post Office or Sub-Post Office.

10. Need I go to my bank branch only?
For exchange upto 4000 in cash you may go to any bank branch with valid identity proof.
For exchange over 4000, which will be accorded through credit to Bank account only, you may go to the branch where you have an account or to any other branch of the same bank.
In case you want to go to a branch of any other bank where you are not maintaining an account, you will have to furnish valid identity proof and bank account details required for electronic fund transfer to your account.

11. Can I go to any branch of my bank?
Yes you can go to any branch of your bank.

12. Can I go to any branch of any other bank?
Yes, you can go to any branch of any other bank. In that case you have to furnish valid identity proof for exchange in cash; both valid identity proof and bank account details will be required for electronic fund transfer in case the amount to be exchanged exceeds ₹4000.

13. I have no account but my relative / friend has an account, can I get my notes exchanged into that account?
Yes, you can do that if the account holder relative/friend etc gives you permission in writing. While exchanging, you should provide to the bank, evidence of permission given by the account holder and your valid identity proof.

14. Should I go to bank personally or can I send the notes through my representative?
Personal visit to the branch is preferable. In case it is not possible for you to visit the branch you may send your representative with an express mandate i.e. a written authorisation. The representative should produce authority letter and his / her valid identity proof while tendering the notes.

15. Can I withdraw from ATM?
It may take a while for the banks to recalibrate their ATMs. Once the ATMs are functional, you can withdraw from ATMs upto a maximum of Rs.2,000/- per card per day upto 18th November, 2016. The limit will be raised to Rs.4000/- per day per card from 19th November 2016 onwards.

16. Can I withdraw cash against cheque?
Yes, you can withdraw cash against withdrawal slip or cheque subject to ceiling of Rs10,000/- in a day within an overall limit of Rs.20,000/- in a week (including withdrawals from ATMs) for the first fortnight i.e. upto 24th November 2016.

17. Can I deposit withdrawn notes through ATMs, Cash Deposit Machine or cash Recycler?
Yes, OHD notes can be deposited in Cash Deposits machines / Cash Recyclers.

18. Can I make use of electronic (NEFT/RTGS /IMPS/ Internet Banking / Mobile banking etc.) mode?
You can use NEFT/RTGS/IMPS/Internet Banking/Mobile Banking or any other electronic/ non-cash mode of payment.

19. How much time do I have to exchange the notes?
The scheme closes on 30th December 2016. The OHD banknotes can be exchanged at branches of commercial banks, Regional Rural Banks, Urban Cooperative banks, State Cooperative Banks and RBI till 30th December 2016.
For those who are unable to exchange their Old High Denomination Banknotes on or before December 30, 2016, an opportunity will be given to them to do so at specified offices of the RBI, along with necessary documentation as may be specified by the Reserve Bank of India.

20. I am right now not in India, what should I do?
If you have OHD banknotes in India, you may authorise in writing enabling another person in India to deposit the notes into your bank account. The person so authorised has to come to the bank branch with the OHD banknotes, the authority letter given by you and a valid identity proof (Valid Identity proof is any of the following: Aadhaar Card, Driving License, Voter ID Card, Pass Port, NREGA Card, PAN Card, Identity Card Issued by Government Department, Public Sector Unit to its Staff)

21. I am an NRI and hold NRO account, can the exchange value be deposited in my account?
Yes, you can deposit the OHD banknotes to your NRO account.

22. I am a foreign tourist, I have these notes. What should I do?
You can purchase foreign exchange equivalent to ₹5000 using these OHD notes at airport exchange counters within 72 hours after the notification, provided you present proof of purchasing the OHD notes.

23. I have emergency needs of cash (hospitalisation, travel, life saving medicines) then what I should do?
You can use the OHD notes for paying for your hospitalisation charges at government hospitals, for purchasing bus tickets at government bus stands for travel by state government or state PSU buses, train tickets at railway stations, and air tickets at airports, within 72 hours after the notification.

24. What is proof of identity?
Valid Identity proof is any of the following: Aadhaar Card, Driving License, Voter ID Card, Pass Port, NREGA Card, PAN Card, Identity Card Issued by Government Department, Public Sector Unit to its Staff.

25. Where can I get more information on this scheme?
Further information is available at our website (www.rbi.org.in) and GoI website (www.rbi.org.in)

26. If I have a problem, whom should I approach?
You may approach the control room of RBI by email or on Telephone Nos 022 22602201/022 22602944
https://rbi.org.in/Scripts/FAQView.aspx?Id=119

A Hilarious Trump Card - November Fool's Days ahead

Hi All,

Not adhering to the expectation, Nifty broke the supports near 8560-40 and rested near 8400 psychological mark.

It also saw a "HILARIOUS" bounce yesterday, which could not be sustained, however Nifty managed to bounce from the lower end of the channel suggesting a ray of hope.

Also, yesterday's gap up opening gave an Outside Professional Gap on intraday charts, which is usually held at least for short term.

Nifty, on weekly chart has taken support near the Supertrend levels of 8397, hence a close below these levels can be a serious threat for short to mid term

And the final "TRUMP" Card is the Hammer on daily charts of Nifty today.

However, the risk for the above expectation is the market depth today, where, Nifty bounced back sharply without increasing the number of Advancing stocks as compared to the declining stocks, which is not a good sign for Bulls....

Now, in a nutshell, though Nifty has signaling a bit of bullishness, one should not forget the HILARIOUS TRUMP card for markets, the US Presidential Elections, and the results will be surely disturbing market sentiments, hence traders are advised to either stay out of markets for couple of days or have a strict Stop losses for longs (below 8400-8370) as well as shorts (above 8570-8600-8650)

Hammers all over ! ! !

Hi All,

Nifty tanked badly and lost almost 100 points at the opening today, however on intraday charts it has produced multiple Hammer patterns on 5, 15 and hourly timeframes which is a bullish sign, and the lows of 8500-8460 are still intact…. Request all traders to keep a strict stop loss for the long trades below these support areas for a potential upside only and only if Nifty surpasses and sustains above 8650 levels….

8550 remains crucial level to watch for, if crossed then supports can be below 8500-8450-60

Cheers

Book Profits on Dhanteras....

Hi All,

Book Profits  on Dhanteras….

Nifty blasted, and is trading near the first target / resistance near 8650……

Book partial profits…..

Cheers

Hammer Yet again . . . . ! ! !

Hi All,

After bottoming out today near 8550 on the Expiry day today, Nifty showed a lot of strength and rallied above 8600 (8624), thereby triggering the Long trade. Though, after creating an initial top near 8609, it skipped till 8575 levels, however, managed to come back strongly an close @ 8612.

So, with this close Nifty has given yet another Hammer on Daily charts and a move above today's high, can take Nifty to higher levels. (Refer the chart below)

We have already gone long near 8595-8600 levels, and surpassing 8025 levels tomorrow will ensure higher gains in coming days.

Traders are advised to keep strict Stop loss below 8530-40 for short term trade and below 8460 for a positional Long trade in Nifty...

Cheers

Bull Fighting ! ! !

Hi All,

Nifty has broke out of a falling wedge pattern on intraday charts and showed a lot of strength near the supports of 8550 by bouncing back almost half a percent. It has also given divergences on hourly charts which collectively suggests a pull back in prices.

Traders can go Long only and only above 8595-8600 levels for short term or even positional long trade in Nifty. Stop loss for short term can be below 8540 and positional stop loss can be below 8460….

Hummer and Hammer both did not work

Hi All,

Nifty did not cross the said mark of 8545-50, and broke the supports mentioned near 8590. Hence the long trade mentioned yesterday was not initiated at all.

Now the last ray of hopes for bulls will be the support of 8470-8500, and I feel, the same should not be broken, however the area has now become a weak area of support.

So in a nutshell, neither Hummer effect could save India in 4th ODI nor the Hammer could save the Bulls..... ha ha ha ha :)  

Any long trade should only be initiated after a sufficient confirmation on charts.

Will keep you all  posted.

Cheers

Dhoni drives Hummer.... Nifty gets Hammer ! ! !

Hi All,

Nifty long call initiated near 8560-75 was trailed stopped out below 8630, however, earlier it saw a nice movement of more than 3% from the lows of 8500 to 8740.

Now, after consolidating in a tight range of less than 100 points for almost a week, Nifty gives yet another ray of hope for Bulls,

On hourly charts, Nifty has given a Hammer pattern with a RSI divergence, which will get confirmed only above 8645-50.

Trades can go long only and only above 8645-50 with SL below 8590 with targets of 8680-8700-8740... The only concern for the trade is the Gap down opening for Nifty today, hence strict stop losses are advisable....

Cheers

Hrishi

Tired . . . .! ! !

Hi all,

Nifty finding it difficult to break 8750 on the higher side and close above 8710 (The resistance of a gap down opening on 13 Oct)…..

On the lower side now 8650-8625 will act as strong supports and will decide the fate of bulls….

Cheers

Diwali Bonus . . .! ! !

Nifty 2 targets achieved, approaching the 3^rd target near 8750…

Trail Stop loss below 8630 for open position in Nifty Longs initiated @ 8560-75 …

Cheers

Hope you all made profits . . .! ! !

As expected . . .! ! !

Hi All,

As expected 8500-8460 levels still intact..... impressive pull back from Bulls... Need to sustain above 8600-8620 levels for further upmove....

Traders who bought at lower levels can think of booking part profits near 8590-8620 levels. 8620-25 will be crucial level to watch out for…

Cheers

Update - 18th Oct 2016 1.10 PM

Book part profits for the Long initiated at 8560-75 @ 8615-20, trail stop loss for the remaining position.

Cheers

Bingo ! ! !

Nifty first target achieved , trail stop loss at cost……

Cheers

Bullishness Galore . . . ! ! ! Caution Advised

Hi All,

As posted yesterday, risky traders can be long in Nifty with SL below the supports mentioned....

In order to help bulls further, after an occurrence on hourly charts yesterday, Nifty daily chart also will show a Hammer looking today giving a bit more confidence to Bulls for the next week.

In fact following are the reasons bulls should enjoy the weekend quite peacefully (Please refer the charts for better understanding)

1. A Hammer on hourly charts yesterday
2. Hammer on Daily charts today
3. An ascending Triangle formed on intraday charts today which will breakout above 8600 levels (initial target of ~8660)
4. Yesterday and Today's candle resembles a Harami Pattern near a prior daily support
5. RSI on daily charts has taken support near 40 levels
6. One of the lowest RSI reading of 22-23 on hourly charts....

If all these factors dont scare bears and they continue to ruin the happiness, then really, RIP Bulls.... Ha ha ha...


Jokes apart, it fairly suggests that the Nifty can witness an upmove, if 8470-8500 levels are held on closing basis and Nifty sustains above 8600 levels, with targets of 8660-8690-8750-8810.

The one and only concern for Bulls will be that the said support zone of 8470-8550 is a prior tested zone and acted like support too many times earlier, hence a break of that can mean a strong downside as it will also mean a breakdown from the Head And Shoulders Pattern on daily charts, as mentioned yesterday...

So, it is advisable to be on the long side of the markets unless Nifty is above 8470-8550, with a strict stop loss below the supports.

Cheers

Head and Shoulders / All Clear of Bulls or Clinic Plus point for bears ? ? ?

Hi All,

As per the last update of 3rd October, Nifty rallied almost till 8800 levels without breaking the crucial zone of 8500-8550.

Now, after falling for 5th day in a row, Nifty is again near the supports of 8500-8550. However we need to understand that the support zone now is surely getting weaker after so many instances.

Also, what is more concerning for bears in a Head N Shoulder pattern unfolding on daily charts and a close below 8550 will really mean an All Clear of Bulls at least for short term.

However, again a small ray of hope for bulls is the Hammer on the hourly charts near these crucial support areas. The Hammer will get confirmed if Nifty crosses 8580 levels and sustains above the same for today,which in turn will mean that Daily closing will be above the Head and Shoulder neckline, negating it at least for today.

So in a nutshell, 8500-8550 remains to be crucial supports before bears star a complete dominance.

Risky traders can go Long in Nifty with SL below supports and targets on the higher side near 8650-8690-8750-8810.

Cheers

Art of Making Money: What is 370???

Art of Making Money: What is 370???: Congress's politics or a real need..... Article 370 is a temporary provision which gives special constitutional status to Jammu an...

Hope . . .

Hi All,

As expected in the last update, Nifty, after breaking the crucial zone of 8670-80, Nifty fell sharply by more than 200 points and took support near the important levels of 8550....

After a strong pullback on partially on Friday and today, the short term bias looks positive with supports below 8540-50....

The midterm outlook will still remain bearish due to a shooting star pattern on weekly charts, however, any damageable downfall can only be expected below 8400-8470 levels.

On the higher side now, 8730-8750 will act as crucial resistances for further up move and hence a Buy on decline strategy with stop loss below 8540-50 will be beneficial.

Cheers

Galore of Bearishness . . . Last hope for Bulls

Hi All,

In past few session we saw that Nifty is not able hold on to the higher levels and experiencing selling pressure.

There are multiple negative signs appearing on charts... Shooting star on weekly charts, a bearish engulf on daily charts near a gap resistance, RSI taking resistance near 60 mark on daily charts and a triangle breakdown on hourly charts (however the targets are almost achieved near 8800-8790....)

By keeping all this in mind, 8750-40 will be very crucial for Nifty for short term, the mid term bias will be positive if Nifty trades above 8680 levels... Even Nifty currently holds on to the trend line drawn on the hourly charts by connecting recent lows....

Below these levels, we can expect Nifty to fall further till 8620-8540-8500-8470 levels.

On the upper side 8820-8900-8920-9000 will be key hurdles for bulls.

Traders are advised to trade only after a confirming evidence on charts,,.....
Cheers

Is Demat A/c with Discount broker risky? A take by Capitalmarket..

Hi All,

Got this nice Whats App forward which I found very useful.... 

Always open a demat and trading account with reputed companies with high net worth. There have been enough instances of brokers going bankrupt. The event has affected their clients' holdings. The latest example is Unicon Securities. Here the broker used clients' holding as margin in derivatives trading and also used clients' margin money to buy real estate. In short, money kept as margin by clients for their own trading was siphoned off by the broker for trading in the name of the promoters or through the company's proprietary account. There are other instances of brokers going bust. For example, Click2trade, Vasanti Securities and Royal International.

This does not mean that your discount broker will also go bust. But investors need to understand the business model and analyze the risk of dealing with such companies. They may charge a flat fee per trade to their clients. The fee might be negligible compared with other brokers who charge a percentage of the traded value. Trades are executed only if the client has a credit balance in the trading account. Clients are not given any margins on their stock holdings. Thus, the discount broker might be making money by investing the clients' surplus money in fixed deposits (FDs) or liquid funds. In any case, the broker will not disclose where the money is invested. This makes opening a demat and trading account with a discount broker a risky proposition.

It is best to stay away from such brokers. Also, many times, the opportunity cost of the money parked in the broker's account is higher than the actual brokerage paid. For instance, a person trades once a month and parks Rs 10 lakh with a discount broker as trades take place only if he has a credit balance in the trading account. Now, the opportunity cost of this money if put in a bank FD is close to Rs 80000 a year. Most people pay lower brokerage than this to their brokers. The brokerage amount charged by a discount broker might be substantially low but the loss of opportunity huge. Thus, it is better to stick to a reputed broker with a sizable net worth.

Bears all around ! ! !

Hi All,

Nifty witnessed selling pressure in the morning today, however gained a momentum to surpass the 8810 levels.

Going forward, resistance for Nifty is near 8825-8830 levels and Nifty has formed yet another Shooting star pattern (Bearish), on 15 minutes chart which will get confirmed if Nifty breaks 8810-8800 levels.

Nifty, below 8800 can go further down to touch prior swing lows near 8770-8750 levels.

Bulls need to be careful of any suspicious rise in Nifty without proper chart confirmation...

Cheers

The never-ending journey of Emotions... ! ! !

Completed 13 years in stock markets today...

I used to wonder, when prices go up or down and why?

But, realised that be "Reactive" and not Proactive in markets..

Let the markets tell you where it wants to go..

Treat them like the indicator on a Railway platform, to board the right train and enjoy this never-ending journey of Emotions...

This is my understanding of the markets in last 13 years.... And let me confess... it's just a drop in the ocean... Much much more to come....

An Evening Star . . .! ! !

Hi All,

Nifty trailed stopped out at 8800.....

As expected in the morning, Nifty took resistance near 8850-8860 mark and fell almost by 50 points since then.

On the hourly charts now, Nifty has firmed an Evening star like pattern which is bearish in nature, also the weekly chart observation of a shooting star pattern gives more reasons to worry for bulls now. Moreover if the markets closes near the 8800 levels, even the daily char will form a shooting star pattern.

On the lower side 8780-8750-8720 and finally 8675 will hold key for bears and if these levels are broken then a Trend reversal is almost certain...

Hence, it is advisable for bulls to book profits in Longs and wait for a suitable entry.

Cheers

Move wearily

Hi All,

Nifty longs trail Stop loss below 8770....

Cheers

On the move . . . ! ! !

Hi All,

Nifty up by more than 70 points from initiation now... Traders having multiple lots can book profits with every 25-30 points up move.... others can keep trailing stop loss below 8750...

Hope you all made money...

Next hurdles for Nifty near 8830-8860-8900-8945-8970

Cheers

Hrishi

Book partial profits ! ! ! !

Hi All,

All traders, book part profits near 8750 and trail SL below 8700.....

Cheers

Play safe . . .

Hi All,

Low risk traders, who don’t want to take overnight risk can book a small profit of around 20 points in Nifty near 8731-33, rest can carry an overnight trade with the original Stop loss...

Cheers

Bottom fishing . . .! ! !

Hi All,

As expected, Nifty yet gain took support near the Supertrend area of 8690 levels and is showing some signs of strength on hourly and 15 minutes charts.

Risky traders can think of going Long in Nifty @ 8715 levels, with a stop loss below 8685 and targets being 8750-8785-8810.. (all spot levels)

Cheers

The War is on. . . . ! ! ! !

Hi All,

As expected on Monday, Nifty did not break 8700 levels and witnessed an initial bounce till 8740-8750 levels, however could not sustain the same and closed near the day’s low at 8715.

On daily charts Nifty has taken support near 8700 which is also the Supertrend area, however, on weekly charts Nifty has given a bearish candle Shooting Star on Friday, and Monday’s gap down opening also confirms the pattern.

On hourly charts Nifty has created a Bullish Hammer like pattern, which is a ray of hope for bulls, and that is the reason 8700-8690 levels will be very crucial to watch out for on closing basis,

Hence going forward, for any substantial up move Nifty should first surpass the recent high made near 8960-70 levels, else every rise can be a selling opportunity for short term. Medium term outlook will be positive until Nifty trades above 8500-8600 levels.

On the lower side supports will be near 8690-8620-8570-8500 and the resistances will be near 8750-8780-8860-8910-8970.

As there are contradicting signals on different timeframes, market are expected to be choppy, hence trading with proper stop losses is a must.

Cheers

Channel Changed ! ! !

Hi All,

As mentioned in the previous post on Friday, Nifty was trading near the upper end of a rising channel, and a healthy correction can not be denied.

Following the same prediction, Nifty is about to open gaped down by more than 100 points and the crucial support to watch out for will be 8700-8760 levels below which Nifty can even go further down till 8570-8620 levels.

Though the bias for markets will be buy on dips, a confirmation on chart is mandatory before going long after such a huge gap down opening.

Will update you if there comes a trading opportunity. 8700-8760 will be the levels to watch out for.

Cheers

Hrishi

Will bears change the channel ? ? ?

Hi All,

Sincere apologies for not updating the blog for few weeks, was caught up in something.

Personal Market View -

Nifty, after my last market update on 26th July, has traded sideways and in he range of 8700-8500 for almost a month and finally broke out on the higher side and created a 52 high of 8968-70 couple of days back.

Though the next hurdle for Nifty is going to be near the life time high of 9120 levels, it is currently trading near the upper end of the channel on the daily charts, which again means that, like what happened earlier (please refer the chart below) Nifty might have to come down by 3-5% or at least trade in sideways manner in order to gain further strength.

Resistance on the higher side will be near 8970-9000-9050-9130 whereas supports are going to be near 8870-8840-8820-8800-8750

The gap up opening near 8820-8850 will be very crucial support zone to watch out for.

Art of Making Money: RSI Divergences... With a different dimension, A ...

Art of Making Money: RSI Divergences... With a different dimension, A ...: Transform your TRADING in to Successful TRADING Hi all, I am sure that the market followers and those who know at least a bit of Techn...

Inter-market analysis by John Murphy....

Hi All,

Just a small note on inter-market analysis from the book written by John Murphy -

The following markets/segments interrelate each other -

Bonds
Stocks
Currencies
Commodities

Intermarket Principle - No market move in asolation, they are interrelated...

Relationship overview - 

1. Bonds and Stocks relate positively to each other.....i.e. They move together. Stocks do better when bond market is moving up

2. Bonds and Commodities relate negatively.....i.e. They move in opposite direction

3. Commodities and US Dollar move Opposite.....

Stocks market and Bond market influence each other, Commodity markets are influenced by bonds and currencies are influenced by Commodites...

For more details please watch 

Regards

Hrishi 

On a long journey – But the fuel Tank doesn’t look full...

Hi All,

Nifty, as expected rallied sharply towards the key levels of 8600-8640, thanks to the Hammer pattern seen on the hourly charts. As mentioned in the earlier posts, 8660-8700 will remain a crucial hurdle as there are many negatives which are hovering around the markets currently

On the Technical Front – Please refer the chart

·         Nifty is trading near a key resistance are of 8660 after rallying by almost 27% in 5 months without any major correction.

·         Nifty is trading near 78.6% retracement, 8630-40 of the entire fall from 9119 to 6825

·         Nifty is also trading near the upper end of the rising channel

·         On daily charts RSI, at 68 is nearly touching the overbought territory

Based on Fundamentals – Refer the chart

·         One of the reasons for markets rally is optimism about the GST clearance in the upcoming parliament session, non passage of the bill can be a huge setback for markets

·         One more sign of concern is the Nifty PE, which is currently trading near alarming levels of 23.69 (as of 25^th July 2016) and usually levels above 24-25 have resulted in a decent correction / fall in the Nifty

What can we expect -

If Nifty fails to breach the 8660-8700 levels convincingly, we can expect it to correct to the lower support areas and 8470-8540 will remain as crucial level for deciding the short to mid term trend. Below 8470-50 Nifty can come down till 8400-8280 levels

If Nifty keeps on scaling new highs with muted results the PE might swell and go above the alarming levels of 25, however good quarterly results for Nifty can help in cooling down the PE and thereby reducing the uncertainty

In a nutshell –

It is better to wait and watch as a trader for the levels based on charts and trade only after a proper evidence.

For an investor there is no need to worry as historically it is also seen that after those corrections given by PE valuations markets have bounced back decently. It is ideal time for starting the SIPs in Equity related MFs and/or investing directly in equities with proper stock selection and diversification.