#MarketUpdate- Prelims cracked, Merit Class, BUT ! ! !

Hi All,

Bang on.... The age old Dow Theory Principal, Proven right, yet again....

Price discounts everything

As discussed in the earlier post of Friday, markets gaped up by more than 2%  and seems to have, to an extent, factored in a probable outcome of the verdict on 23 May, which is ideally expected to be close to the Exit Polls announced yesterday. Good part is indices are sustaining the upward leap and trading up by close to 4% now and trading a hit away from the life high.

I feel, following scenarios to unfold in the near future -

1. Markets have factored in the NDA's majority and return to power with close to 5 -6% gains on Friday and today
2. Any further leap by NDA above the tally of exit polls (Close to or above 300 seats) would mean another reason to cheer for markets and we can expect a fresh northward move on 23 or 24 May which might breach the life high for Nifty of 11760
3. Moreover, a clear single handed majority for BJP on its own, would be very much welcome by bulls and enough to take Nifty near 12k mark or even higher
4. Remotely probable scenario, (buy can't be ruled out, especially after lat week's Australian exit polls and another cases like 2004 elections exit pools went completely wrong Read : exit polls going completely or partially wrong) of exit polls getting it wrong completely (like 2004 elections) and BJP gets less than 170-180 seats and hence NDA may not be in a position to form the government and UPA with other MGM allies forms government, this would be a severe shock to the markets and we can expect a huge sell off, something even closer or similar to that of 2004 where markets plummeted by approx 20% in days after the verdict. In this scenario 10500-10000-9500 becomes visible, but predicting the actual damage may be next impossible. 
5. Less probable  outcome where the final tally is lesser than exit polls expectation numbers but BJP and NDA manages to somehow maintain the majority, where BJP gets somewhere between 200-220 seats and other allies gets required seats (and with a bit of horse trading), markets might give up some of the gains of these 2 days, and might settle above 11k mark

All said and done, in past 2 sessions, markets yet again proved that it discounts everything, there is also one other, equally meaningful principal, which says 

Buy the Rumour sell the Fact....

Basis this, I personally feel, even if the verdict is close enough to the exit polls and BJP wins with a thumping majority, this rally might not sustain, and before the markets decide the next course of action, there should be a serious and aggressive  profit booking post the event. 

Not only that, after the exit poll resulsts, there might be a chance that the Nifty might kiss the all time high, but even for tomorrow / day after (before the verdict and post the exit poll) it may not hold on to today's gains and might trade sideways between 11500-11900

For trading, a simple rule can be, since markets are trading near a resistance zone of life high, the risk reward favors a short position, if someone dares (and one should dare too) should be with a stop loss above the life high but Traders are advised to trade with caution...

Investors, should really not worry as the exit polls are not indicating any price shocks after the verdict, but if the scenario 4 or 5, gets played out, they should definitely protect their portfolios at negligible costs. Please read - Portfolio Insurance

Portfolio Insurance, a must read for an Investor ! ! !

Hi All,

This might be one of my longest blogs, but trust me, would be very useful for Long term investors. Also, this  post, speaks a lot about a very interesting market segment of Derivatives / FNO, which is a bit tricky at first to understand, please feel free to get back to me for any doubts.

#MarketUpdate - NDA coming back to power ? ? ?

Hi All,

No, I am not saying it, but Yes, markets might be indicating.

Was out of markets, hence could not post any updates for a while. However, in the absence of any bullish evidence, Nifty could not hold levels of 11250-200 and created a low near below the next gap support of 11150-11170, though it closed below the gap for a day but bounced back sharply after creating a Bullish Harami Pattern, which would have given a buy above 11300 with stop  below 11100, could not update the same.... :(

On the political front, I personally think that 2019 is no where going to be easy for NDA like 2014, and would be challenging to get the required majority. However, on the eve of a big political event the way Nifty has bounced back by almost 3% (11100 to 11400) it keeps me wondering if the markets are discounting a probable positive outcome from the exit polls due on Sunday (at least a near to clear mandate to NDA, somehow).

Nonetheless, Nifty after a stunning pullback, looks good for bulls with ultimate support near 11100-11000 and thanks to the multiple Bullish Haramis, expected to travel at least till 11470-80, which also is a downward gap resistance. Another good sign would be that the weekly candle is a strong pull back candle and 11430-11470-11500 would be crucial levels to watch out for.

However, on a safer side, let us wait for Monday to take any trade, the next week is going to be crucial for trading aspects, as the actual results would be declared on 23rd May, which also happens to be the weekly expiry.

#MarketUpdate - Bang Bang . . . .

Hi all,

As expected, Nifty plummeted sharply after breaking below the neck line of the Head and Shoulder Pattern. The target for the same as mentioned is almost achieved near 112230-11250.... (Today's low ~11255) in less than 2-3 days....

The next crucial level to watch out for would be the upward gap support between 11160-11230, traders with open short positions can book full / partial profits and trail stop loss above 11360-400....

However, thanks to the intraday pullback by bulls, today's candle looks like a indecisive candle and moreover, on hourly charts, the strong pull back in the last hour of trading can be treated positively to an extent. There is also a positive divergence which would only be triggered above 11360-400.

I personally feel the lows of 11250-11200 would be very strong and should act as supports going forward, so risky bulls can take a low risk opportunity, by taking long positions on dips with stop loss below 11230-11200, still another bullish evidence would be welcome... 

One thing to note that, the weekly candle as of now is a strong bearish candle, with no sign of respite for bulls, hence the above mentioned bullish view can just be a pull back and not a complete trend reversal...

Cheers...

Hrishi

#MarketUpdate - Head and Shoulder ! ! ! (Updated on 8th May)

Update - 10.05 AM 8th May 2019

Short traders can book partial profits at the first support zone mentioned near 11400... trail stop loss at cost...


Update - 2.55 PM 8th May 2019

Nifty breaks 10400 as well, next pit stop near 10340-11300-11220-11170 . . . . Continue holding shorts with trail stop loss above 10530 (cost), conservative traders can even trail stop loss above 11460-70

Cheers

Hrishi

#MarketUpdate - Hidden Signal ? ? ?

Update - 26th April 2.15 PM

Nifty, up by 100 odd points, however, the market breadth (Advance Decline ratio) is a cause of concern as Declines are more than Advances

Bulls can ideally book a partial profits and trail stop loss at cost.... CMP 11740...

Cheers

#MarketUpdate - Engulfing

Hi all,

Though the inter market divergence was negated, as per today's morning update, Nifty, even after creating a Life high (marginally by just 0.80 points), consolidated the day in a small range without any major upside.

But in the closing hours, index gave off all the gains and ended up creating a solid red candle which depicts a Bearish pattern, Bearish Engulf... just near a prior resistance area, which even increases its significance

After the fall of around around 130 pts / more than a %, it settled near the support zone of 11600-640, which again becomes a crucial area to watch out for.

So, very Important support for Nifty would be near 11560-11630, sustaining below which, can mean a down move to the lower supports near 11520-11470-11400-11300.....

This fall was very much expected, especially after the last 3 days price actions. The price for all 3 days closed very near to open, creating a doji (indecisiveness) candle, 29th March (Hanging man), 1st April (shooting Star) and 2nd April another Hanging man, was clearly suggesting the upper hand of bears and that was the reason the the earlier post I expected a very limited upside further, before at least respecting these bearish sentiments once. 

However, markets has a funny way of showing you that you are wrong, hence any short trade should be taken below the key support mentioned above and that too with a strict stop loss slightly above the Life high. 

Cheers

Hrishi

#MarketUpdate - NIFTY, at Life high.... BUT . . .

Hi all,

Nifty created an all time high and hence the inter market divergence is negated.

Also, it did not break the low of bearish Shooting Star pattern near 11640-30 so no shorts initiated.

The upside might be capped on account of important event of General elections 2019 to be held in this and next month. The results would be out on 23rd May 2019 and till then one can expect a great amount of volatility in the markets.

Also, more importantly, Nifty has surged by more than 15% in past 5 months, and hence I believe, that the risk reward for Bulls is not favourable at the moment.

So traders, it's better to wait and watch for entering in to a trade.

Remember, lesser profits / No trade is always better than a Loss

Cheers

Hrishi

#MarketUpdate - CAUTION, Diversion Ahead.... Fool's Day fooling ???

Hi All,

First of all, wish you a very Happy New Financial Year 2019-20.... :)

Surprisingly, the falling window could not do its magic and Nifty, after taking support near the first support zone mentioned near 10300-310, closed handsomely above the downward gap near 10435-40. And after that there was no look back for Bulls as they took Nifty towards almost a 9 month high, not the life time though...

However, Sensex today crossed 39k mark for the first time ever and surpassed its earlier Life high of 38989.65 and created a new high near 39115.57.

Now, this raises serious concerns for bulls

Firstly, Sensex is the only index which created a life high, and all other major indices, i.e. Nifty, Mid cap, Small cap, etc did not surpass their respective highs. This phenomenon is called as a kind of Inter market (index) divergence which can prove to be very alarming. The only issue is this can continue for a period of time and taking a trade just based on this may not be a good idea...

However, importantly, Nifty which was up by almost a % (115 points), gave more than half of its gains and closed up by just 45 points, and in this bargain, both Nifty and Sensex both have created a Bearish pattern which looks similar to the Shooting Star / Gravestone Doji.

In a nutshell, today's low for the indices would be crucial to watch out for.

Hence very Important support for Nifty would be near 10560-10630, sustaining below which, can mean a down move to the lower supports near 10520-11470-11400-11300.....

However, though it's quit difficult for Mid and small call indices, but even if Nifty manages to surpass the previous high of 11760 levels, we can then say that the divergence didn't work and it may continue its northward journey.

So, the big question is, are the Bears fooling us on Fools day?

I feel, 10400-10300 levels are very crucial for bulls.....

Let the time decide, wait and watch for the aforesaid levels...

Cheers....

Hrishi

#MarketUpdate - Falling window ! ! !

Hi all,

After 2 consecutive negative closes near a weekly resistance of near 11580, Nifty gaped down today and closed lower by more than 100 points or ~ 1%.

The hourly hammer mentioned in the earlier post, did not get triggered and hence a long position could not have been entered at all.

After opening negative, Nifty kind of achieved the first target for shorts near 10310. Those who have gone short below the supports of 10400-10430, can remain short with stop losses mentioned earlier.

Also, a gap down opening means that untill Nifty closes above 11435-40, the trend is likely to remain negative going forward....

Key resistance for Nifty would be the gap off 11395-11435, 11480-11525-11580-11610, whereas the supports would be near, 11300-11260-11220-11130...

Cheers......

#MarketUpdate - Mohe rang do Laaal ! ! !

Hi All,

Belated Holi wishes to all....

After a stupendous positive rally, Nifty closed negative for 2 consecutive day after 28th Feb 2019.

As posted earlier, it took resistance near the weakly supply zone of 11570-11580.

Bears can rejoice - 

1. On hourly charts today, Nifty started the day with a bearish engulf pattern on hourly charts, which clearly conveyed intentions of BEARS.
2. Even today's daily candle is a strong bearish candle without any visible bottom tail, which shows that the BEARS have managed to take the control.
3. And above all weekly candle for Nifty is a shooting star like candle with a long upper shadow suggesting a lot of selling pressure.

Things to worry for bears -

1. Today's second last hourly candle for Nifty is a perfect Hammer kind of candle which is bullish
2. There would be a good amount of support near 10400 mark for Nifty.

To sum it up, crucial levels to watch out for would be 11400 on the lower side and 11580-600 on the higher side, and a break of either side would decide the further direction.

Plan of action for traders - 

Wait for the opening of Monday, bulls can still take back the control if they manage to keep the index above today's hourly hammer low near 11430, one can take a small risk and go long, if Nifty opens on Monday on a flat to positive note and follow a strict stop loss below 11400-11430 but if it breaks the support near 11400, it can fall down further to next support zones near 11310-11260-11220-11175-11120..... However, I would personally feel to wait for it to break the crucial levels and then take the trade accordingly

P.S. - 

Nifty has rallied by almost 1000 points within a period of just a month, and hence a breather can be expected in markets and index can trend range bound or with a slight bearish bias. Traders are advised to take positions with strict stop loss and with proper money management.


Have a great weekend!!!

Cheers....

#MarketUpdate - Yeh BULL hai, ke maanta nahi !

Update - 1040 hours 22nd Mar 2019

Nifty has taken resistance near the weekly supple area near 11570-80

Today's trading action would be very crucial...

Cheers

Hrishi...

#MarketUpdate - Rickshaw Man !

Hi All,

As posted in the last update, Bears could not win the battle near the 78.6% retracement near 11384-90 and Bulls managed to sky rocket the index to the next hurdle of 11470-11530.

Though Nifty hit the 6th month high today near the daily resistance of 11530, it has ended up with a look alike of Rickshaw man candlestick pattern, usually treated as a trend reversal, if the low is broken and sustained convincingly. (Refer the chart below)

Hence, today's low becomes very crucial for bulls, as failing to hold that would mean than index might see a down ward retracement of the entire rise of last month from 11600 odd levels. So, short positions can be initiated, if and only if Nifty convincingly breaks 11400 mark with a stop loss above 11530-50... Below 11400 Nifty can drift down to 1150-11310-11260-11200-11130.

However, if Bulls yet again manage to take out 11530, Nifty can zoom firstly towards 11610 and then create a Life high above 11760..


Cheers

Hrishi

#MarketUpdate - Last ray of hope for BEARS...

Update - 0920 hours 15th March 2019.....

Bulls managed to take out the 78.6% retracement quite convincingly, a sustained close above that would take Nifty near the Life Time highs... Immediate hurdles for bulls - 11470-11530-11610

Cheers

#MarketUpdate - History repeats itself? 2014 Vs. 2019 Charts Analysis... !!!

Hi All,

Continuing further from my earlier post, Nifty did not give any sign of weakness (which was advised), and scaled higher, comfortably breaching the key levels near 11200. Now, as posted the next barrier for bulls would be near 11350, and today, Nifty created a high around that level. But interestingly it has created a Hanging Man Pattern, so sign of cautious for bulls.

No, as we all know, markets are awaiting the general elections and hence the volatility is expected to go up.

I just thought of putting the charts 1 year prior to the elections of 2014 and 2019. And the same are self explanatory

Nifty daily chart - PreElection time 2014 Vs 2019

As we can see, the movements might have been different over the first 5-6 months (i.e. from May-Oct), however, whats more important is that, the index traded almost the same way from November to March in 2013-14 and 2018-19, the pre election time for markets.

Please have a look at the chart below is for the entire 2014, after the election results and you know what do I mean....

Nifty post General election 2014, gains of around 60% from the lows of 2013 and 30% from the levels of March

By going by the basic tenant of Technical Analysis, The History repeats itself, and if the same turns out to be true, it is needless to say, what I expect from markets in this year, if we have a decisive mandate....

From the lows of 2013 near 5300 (previous year to the general election), Nifty rallied by almost 60% till December 2013.
P.S. 2018 low near 10k for Nifty. 

Even, from the 6500 levels of March 2014, Nifty rallied by almost 30%.
P.S. Nifty 2019 March levels 10300

Though the elections results don't dictate terms for the long term appreciation of the markets (as seen even at the times of coalition governments in 1990's) for the immediate movement, as mentioned, it all depends on history repeating itself, which means it would be necessary to get a decisive mandate in the General elections 2019.

Let's wait and watch the fun....

Cheers!!!

#MarketUpdate - Knock knock BEARS ? ? ?

Hi All,

Nifty recovered sharply after a short lived sell off post Air strikes and rose by almost by 3% from the bottom of 10730.

However, Nifty is currently trading near an important area of resistance from 11050-11180.

Today, Nifty has given a strong gaped up opening however, it's an amateur gap and may not last long if bears strike hard. Also, on daily charts, Nifty has a very small downward gap between 11041-1043 which will act as resistance. A sustaining close below 11041 would mean that the current up move only took place to close the gap.

Any further up move is only possible if Nifty surpasses and sustains above the resistance zone.

Risky bears will now think of shorting Nifty now or on rise with stop loss above 11180-11200....., however, a sustained move above 11180-200 would mean a next leg up likely for Nifty taking it higher till 11350-11530-110610 and then finally above 11760, the life time high.....

However, personally I feel, it's advisable to wait for a bearish confirmation on daily or at least hourly charts for going short

Nifty CMP - 11040

Cheers...

Hrishi

#MarketUpdate - Chance pe Dance..... Go Long....

Update 2.10 PM 26th Feb....

Book full profits in nifty intraday near 10840-10850 for the longs initiated near 108780-790....

Cheers

#MarketUpdate - Sustainable bounce ? ? ?

Hi All,

I was out of town in the first week of Feb, and due to some technical issue could not post the update on blog. However, on my What's App broadcast list, have suggested shorts near 10950-11000 and for which profits were booked above 10800, which was the trailing stop loss.

After falling consecutively for 9 odd days, Nifty finally witnessed a bounce from the support zone near 10530-10590. 18-20 Feb candles also show, though not exactly, but a lookalike pattern of Morning star.

Nifty charts are giving some contrarian view as follows...

As per DAILY charts, this bounce can continue till 10920 levels which is a 61.8% retracement of the previous fall from 11118 to 10585, and above that Nifty is expected to scale higher towards 11010-11120-11050. Though the current bounce looks like a short term up move, any material changes in the trend is only possible if Nifty surpasses and sustains 11150-11200 levels. (Refer the chart below)

However, as per WEEKLY charts, Nifty after forming a bearish Shooting star pattern (week ending 8th Feb), nifty created a hammer like bullish candle for the last week, however, the same can not be counted as it did not appear after a bear trend, however, it's a strong bullish candle and can not be  forgotten either. Moreover, a complete bounce from 10k levels has halted near 11118 which is 61.8% retracement of the fall from 11.7k to 10k. (Refer the chart below)

In a nutshell, as a result of this contrary indications,  traders are advised to trade with caution and with proper risk management. As it is markets are expected to remain choppy for few months, mainly on account of the general elections and trading with strict stop losses and trailing stops regularly is a must.

Cheers

Hrishi....

#MarkeUpdate - Laaaaao Bazaar, Nifty wapis 11 Hajaar

Hi all,

As expected, Nifty faced a stiff resistance near the psychological mark of 10900-11000 and turned down couple of times from there.

However, it has managed to cross it today, at least in the early trades which is a good sign for bulls.

However, Nifty should sustain these levels to start the next up move.

The target on the upside will be near 11150-11300-11400, where as the supports would be near 10800-10580

Cheers

Hrishi ! ! !

#MarketUpdate - /\ Triangle ! ! !

Hi All,

Wish you all a very happy, prosperous and healthy New year 2019.....

My apologies for wishing so late, but this is my first update in 2019, thanks to a range bound market for past one month or so.

As mentioned in my last post, Bulls showed a lot of power and bounced back sharply from key area of 10490-10550, where prices has key retracement support and Supertrend support as well.

As expected, Nifty is comfortably sustaining above these levels, however with a lot of range bound, consolidated moves. And in this bargain, it has manged to form a continuation pattern, Symmetrical Triangle. (Please refer the chart below)

The pattern, will be confirmed when Nifty sustains above 10850-10900 levels and if so, can target higher levels of 11200-11300, even on a conservative basis. (CMP 10880)

By crossing the hourly resistance near 10870, Nifty has formed a higher top-higher bottom formation which is a good news for the bulls,

All said and done, Nifty should ideally surpass the hurdle near 10900-11000 in order to start the new move upwards.

Levels, critical to watch out on the lower side would be 10680-10600/10-10490/10550-10300/350-10100-10000-9940....

The area of 10600-10700 would be crucial for short term traders and can be termed as a trend reversal, if Nifty breaks and sustain below it, whereas 9950-10300 would be very important for mid term to long term trend.,....

Cheers...