Market update for 01/08/2012

Nifty hourly chart

Today's trading session was very volatile as RBI has announced monetary policy. Repo , Reverse Repo and CRR are unchanged but SLR ( Statutory Liquidity Ratio) was reduced http://lastbull.com/what-is-statutory-liquidity-ratio-slr/. Interest rate sensitive sectors like Banks , Auto and Real Estate were highly volatile and many companies in this sector have closed in  green. Nifty closed with moderate gain at 5229 up by 29 points. Short term  trend remains up and the expected targets are 5250-5300.

 

Nifty daily chart

Nifty has maintained it uptrend after breaking out of the range. Oscillator like stochastics is showing that  uptrend will continue for some more time. Nifty has the potential to test the trend line at 5300. Start booking profit from 5250 and Nifty may face selling pressure at 5300.

Chart of the day

Nifty Monthly Chart

Today was the last trading day of this month so I thought of adding Nifty monthly chart. Nifty is trading within a triangle and this is clearly visible in monthly chart.  The trading range of Nifty in the month of July was between 5079-5350. If  we connect 5628-5350 we arrive at a trend line which is nothing but upper part of the triangle. My anticipation for the month of August is that Nifty may reach 5300 and in best case scenario it may move up to 5400 .After reaching these levels it may drift down towards 5000 once again.

Open Positions

Scrip	Type	Qty	Price	CMP	P/L
Tata Steel	Long	100	406	414.5	850
Nifty 5300 CE	Long	50	53	59	300
SBI	Long	25	2015	2005	-250

Today's Trade

Scrip	Qty	Buy Price	Sell Price	P/L
SBI	25	2015

Nifty Medium Term Trend

Trend	Down
Initiation Date	26/07/2012
Initiated at	5043
Low since change	5043
Reversal if closes above	5283

Thought for the day

They always say time changes things , but you actually have to change them yourself. 

Market updates for 31/07/2012

Nifty hourly chart

In previous trading sessions Nifty has closed below 5100 which is 200 DMA. Today's trading session was dominated by bulls and Nifty shut shop at 5199 up by 99 points.

In the above mentioned chart you can see that Nifty has broken out of descending trend line which is constructed by joining 5350-5258. Hourly chart is indicating short term uptrend and the expected targets are 5250-5300.

Nifty daily chart

.In daily chart Nifty was trading within a sloping channel. Today Nifty has closed above this channel which is bullish sign moreover it has  also closed above important moving averages like 200 DMA and 100 DMA. Nifty is expected to test 5250-5300 in short term.

Chart of the day

Tata Steel

In the recent down trend metal sector , being a high beta sector , was badly beaten. But now there are signs of turn around in the trend. Today Tata steel being a leader in the sector has gained  nearly 2.5%. Tata Steel has major support at Rs.388 and form past two trading sessions it showing signs of strength by bouncing back from this level. The expected targets are 418-427.

Open positions

Scrip	Type	Qty	Price	CMP	P/L
Tata Steel	Long	100	406	410.5	450
Nifty 5300 CE	Long	50	53	53	0

 

Today's Trade

Scrip	Qty	Buy Price	Sell Price	P/L
Nifty Aug fut	50	5126	5205	-3950
Nifty 5200 CE	50	72	95	1150
Tata Steel	100	406
Nifty 5300 CE	50	53

Nifty medium term trend

Trend	Down
Initiation Date	26/07/2012
Initiated at	5043
Low since change	5043
Reversal if closes above	5283

Thought for the day

Most people do not want freedom because freedom involves responsibility and most people are frightened of responsibility - Sigmund Freud 

Market update for 30/07/2012

Nifty hourly chart

Friday's trading session was highly volatile. Nifty made a gap up open and traded above 5100. But it faced resistance at 5145 level and eventually came down to 5099 levels. Nifty has closed marginally above 200 DMA which is at 5098.

Sustainable short term uptrend may start above  5160. If 5160 is breached on closing basis then the target will be 5200-5250 and reversal  will be closing below 5100.

 

Nifty weekly chart

Nifty has formed a triangle pattern in both weekly chart and daily chart. As you can see in the above pic the trading range is decreasing and we may not witness a major breakout in the short term. Nifty has taken support at 50 WMA. If Nifty closes below 5085 on weekly basis then it can reach 5000 and 4900. Stochastics on weekly chart is overbought , it is indicating that upside is limited to the extent of 5200-5250. Breakout from 5250 will take Nifty to 5350-5400 levels in medium term.

Chart of the day

Dow Jones

Dow Jones was trading between 12975-12460. On Friday's trading session it has given a clear cut breakout and closed above 13000. The logical targets are 13150-13300.

Nifty medium term trend

Trend	Down
Initiation Date	26/07/2012
Initiated at	5043
Low since change	5043
Reversal if closes above	5283

 

Thought for the day

Take only what you can byte and byte what you can swallow and swallow what you can digest.

Be Persistence

One of the most important quality a trader can posses is persistence. Trading requires the ability to continue trading even when results have not been good!!. Due to the nature of markets and trading systems , good times frequently follow bad times , and bad times frequently follow good times. Some of a trader’s greatest success occur following a string of losses. This is why traders must be persistence in applying their trading methods and continue using them for a reasonable period of time.

Individuals who quit too soon will not be in the markets when their systems begins to work ; those who quit too late will run out trading capital. Therefore , although persistence is important , it is  also important to quit and not play any longer using the existing system.

How do you develop persistence? While the answer appears simple , the implementation is not. The only way to be persistence is to force yourself initially to do everything that must be done according to the dictates of your system or method.

If you are having difficulty , try this. Make a commitment to a trading system or method. Follow through with that approach for a specific amount of time ; take every trade according to the system with as much consistence as possible. If  you are consistent in applying your rules , most cases you will have profits to show for your efforts. Even if your trading is not successful , you will have learned a great deal. You have learned that in a disciplined fashion and , moreover , that the only way to do is to be persistence by following as many trades and rules as possible.

Now compare the above scenarios to the ignorance and confusion that come from haphazardly trading or inconsistently applying trading rules. Think back to your experiences as  a trader. Remember your worst losing trades. You will find that losses that were taken according to a system or method are easier to accept psychologically , whereas those that were not accepted according to the rules often turn into terrible monsters , ultimately costing you much , much more than they should have financially as well as psychologically. To master the skill of persistence , you need to practice it. Make the commitment , and you will see some wonderful results , even over the short term.

Source : Intelligent futures trading By Chick Goslin

Food Crisis ?

Four years ago, soaring food prices had sparked off riots in countries as diverse as Egypt, Bangladesh and Haiti. Some analysts have even suggested that the steep rise in the cost of food was one of the reasons why simmering discontent in the West Asia and North Africa had boiled over into the Arab Spring.

Rising food prices could once again be a cause for concern in many countries, especially since most economies are also growing at a slower pace compared to 2012. India is not the only country that has worried eyes staring towards the clear skies. The US is also facing a severe drought. The US Department of Agriculture warned on Wednesday that prices of groceries and several meat products are likely to climb because of poor farm output. India has no immediate reason to worry about the prices of cereals such as rice and wheat. The granaries have ample stocks, around 30 million tonnes of rice and 50 million tonnes of wheat, far more than the mandatory buffer stock and strategic reserve that has to be maintained. So prices can be capped if the government intervenes effectively in the market.

The biggest worry is pulses and oilseeds, where we are increasingly dependent on imports. Prices of these agricultural commodities have been rising in the forward commodity markets, as traders anticipate inflation. Poor output, higher imports and rising prices of pulses and oilseeds could have two effects on the macro economy --- higher imports and further inflationary pressure.

Food prices matter a lot for consumers in developing countries because they account for a larger portion of family budgets compared to the developed countries. India has already had very high consumer price inflation in recent years, and inflationary expectations have soared, leading to wage pressures in the economy as families try to protect their purchasing power. Reserve Bank of India governor D. Subbarao asked in a recent speech whether core inflation is a true indicator of price pressures in an economy such as India’s, since around two-thirds of the weightage in the inflation indices is accounted for by food and fuel. Further, central bankers in the West look at core inflation but prices of food and fuel tend to be volatile, and add “noise” to the inflation data. But food inflation in India has been persistent rather than volatile.

Abdolreza Abbassian, a senior economist at FAO told Reuters that plentiful supplies of rice and better availability of wheat meant the situation was not as serious as four to five years ago. “It is a serious situation which has to be monitored closely but it is too early to refer to it as a food crisis situation,” he said. “We do not see any production or supply problems with rice. That is very important for food security of millions of people around the world.”

Many governments will be keeping their fingers crossed on that one.

Source : www.livemint.com

Dear Traders,

Today is the auspicious day of Vara Mahalakshmi Vratha. This is the day where we worship goddess of wealth Mahalakshmi . This Vratha is commonly observed in South India as well as in other parts of the nation. May goddess Mahalakshmi bless you all with prosperity.

Om Mahalakshmicha vidmahe vishnupatnicha dhimahi

tanno lakshmi prachodayat

Market update for 27/07/2012

 

Nifty hourly chart

It was a frightening day for bulls. Nifty has breached the 'great wall of china' which is nothing but 200 DMA. From past 3 trading sessions 200 DMA was defended but today break out has happened.

On hourly chart Nifty is holding 5042 which is a low of one and half months. Nifty may bounce from this level , but , it is unlikely to breach 5100. If Nifty reaches 5090-5100 levels short can be executed and the risk involved is very less. Stop loss above 5145. ( Spot levels)

Nifty daily chart

Nifty has breached 200 DMA. MACD is still down and as per fibonacci next targets are 4990-4890. RSI has reached oversold region but in a trending market it can remain oversold for longer than expected time.Those who are holding short positions can book partial profit at 4990-5000 levels.

Nifty Weekly chart

Nifty is forming a triangle in daily and weekly chart. Nifty is below 50 WMA which is a 5085. Tomorrow is the last trading session of the week and if Nifty closes below 5085 then it can easily achieve 5000-4900 levels. 4900 could be the bottom of the triangel and from 4900 reversal may happen. Tomorrow's trading session is very important.

Open Positions

Scrip	Type	Qty	Price	CMP	P/L
Bank Nifty 10100 PE	Long	25	249	240	-225
Nifty Aug fut	short	50	5126	5083	2150
Nifty  5200 CE	Long	50	72	50	-1100

Today's Trade

Scrip	Qty	Buy Price	Sell Price	P/L
Glaxo	20	2082	2171	1780
Bank Nifty 10100 PE	25	249	240	-225

Nifty Medium term view

Trend	Down
Initiation Date	26/07/2012
Initiated at	5043
Low since change	5043
Reversal if closes above	5283

Thought for the day

No worst enemy can harm you as much as your own ungaurded thoughts - Buddha.

Advice to traders

There will be times when your calculations misfire; what had seemed to be easy campaign will turns out hard.  Not everything can foresee. Not only it is important to pick your battle carefully , then , but you must also know when to accept your losses and quit.

In 1971 the boxers Mohammed Ali and Joe Fraizer , both at the heights of their career , met for the world heavy weight championship. It was a grueling match and one of the most famous match in the history of world boxing. Fraizer won by decision after nearly knocking out Mohammed Ali in 14 th round. But both men suffered horribly in the fight ; both threw lot of punches . Ali wanted revenge and he gained a rematch in 1974 – another 15 round grueling match and won by decision. Both boxers were unhappy, they wanted more conclusive result. So they met again in 1975 in the famous ‘Thrilla in Manila ‘ . This time Ali won the match , but neither man were the same again : these three matches had taken two much out of  them which shortened their careers. Pride and anger had taken their power.

Let us not fall into the trap of anger and revenge ; know when to stop.

Source : The 33 strategies of war written by Robert Green

Market update for 26/07/2012

Nifty hourly chart

Nifty hourly chart indicated break down in the first few hours of trading session. Day low was at 5076 but Nifty managed to recover and closing is at 5109 down by 18 points.

As per hourly chart the important resistance levels are 5165-5191. Support levels are 5100-5080. Short term trend remains down so sell Nifty on rise.Reversal of the trend is above 5200.

Nifty daily chart

Nifty is still holding 200 DMA at 5100. If Nifty closes below 5080 then major reversal of the trend can be expected.

 

Chart of the day

Glaxo

From past two days Glaxo is one the gainers in spite of Nifty closing in red. Glaxo is not the darling of speculators. It is a thinly traded stock and from past few months it was consolidating at 1980-2050.

It has gained Rs.80 in past 2 trading sessions and has closed above important moving averages like 100 and 200 DMAs. It is expected to reach a target of Rs.2200 in short term.

Open Positions 

Scrip	Type	Qty	Price	CMP	P/L
Glaxo	Long	20	2082	2150	1360
Nifty Aug fut	short	50	5126	5141	-750
Nifty Aug 5200 CE	Long	50	72	75	150

Today's Trade

Scrip	Qty	Buy Price	Sell Price	P/L
Nifty Aug fut	50	5126
Nifty Aug 5200 CE	50	72
Hero Mot	30	2022	2036	-420

Nifty Medium Term Trend

Trend	Up
Initiation Date	12/06/2012
Initiated at	5116
High since change	5345
Reversal if closes below	5090

Thought for the day 

Great mind discuss ideas , average mind discuss events , small mind discuss people.

Market update for 25/07/2012

Nifty hourly chart

 

                                                     Click on the chart to enlarge

In the previous post it was mentioned that Nifty has taken support at sloping trend line which is at 5107. Today's trading session was choppy and Nifty has bounce back from support levels.Unless Nifty breaks 5100 we cannot expect further fall. Now the trading range is 5100-5191.

 

Nifty daily chart

Nifty has managed to hold 200 DMA. If we consider the upward rally from 4769 to 5348 then 38.2% retracement is at 5127 and today Nifty has closed at 5128. So the decline in Nifty is temporarily halted at 38.2%. Nifty will get major support till 5100. Below 5100 the targets are 5058-4990.

Today's candle stick pattern is called 'doji'. Doji indicates the indecision in market - that means lack of clarity of direction.

The overall direction of the market will remain down. Initiate new short positions if Nifty closes below 5100.

Chart of the day

Copper

Copper was trading in a range and the range was 422-432. Yesterday this range is broken and copper had closed at 419.95. The medium term trend of copper will be down and it will face strong resistance around Rs.424. Positional traders can short copper and reversal will be closing above Rs.424.

Open Positions

Scrip	Type	Qty	Price	CMP	P/L
Glaxo	Long	20	2082	2110	560

Today's Trade

Scrip	Qty	Buy Price	Sell Price	P/L
Bank Nifty Aug	25	10531	10347	4600
Bank Nifty Aug 10500 CE	25	225	211	-350
Minifty Aug fut	20	5216	5149	1340
Maruti	40	1197	1205	320

Nifty Medium term trend

Trend	Up
Initiation Date	12/06/2012
Initiated at	5116
High since change	5345
Reversal if closes below	5090

 

Thought for the day

Condemn none : if you can stretch out a helping hand , do so . If you cannot , fold your hands, bless your brothers and let them go in their own way. -Swami Vivekananda