Market updates for 1/10/2012

 

Nifty daily chart

 

 

 

Nifty has once again bounced back and tested the previous high at 5720. However closing was below 5720 which means that Nifty is still trading within a range. So wait for the sustainable breakout before taking positions.

Nifty weekly chart

 

 

 

In weekly chart Nifty has sustained above 5630 for two consecutive weeks and hence the possibility of reaching 5830 is high. Nifty may consolidate within 5720-5630 for some more time. But this range is expected to break shortly as October is the month of quarterly result announcement and the breakout is going to happen on upside.

 

 

Nifty monthly chart

 

 

 Above is the monthly chart of Nifty. This chart is not useful from the point of view of short term trading. But it can be used to understand the long term (1-2 year) direction of market. In this chart technical indicator called MACD is used. MACD had indicated 'sell' in February 2011 and the downtrend lasted for more than one and half years. Now it has indicated 'buy' . That means the possibility of reaching at least 6200 in coming months is very high. This choppiness is going to continue but the trend will remain up.

 

So retail traders can start buying blue chip companies and quality mid cap companies at least now. Some day Nifty will reach 6200 (I don't know when) and at those levels if we cry that we didn't participate in rally then it is of no use.

 

Some people say that this rally is happening because of liquidity but not because of fundamentals. Yes GDP , IIP and others has reduced,inflation has increased but do you really think that the foreign institutions/ domestic institutions will invest in an economy by looking at GDP , IIP of one year ? under performance of single sector ? earnings of single quarter ? or chart pattern of Nifty based on 15 min time frame ??

 

Chart of the day

 

Infosys Ltd

 

 

 

Infosys has closed below 200 DMA for 2nd consecutive trading session. MACD has indicated sell and it is likely to test the lower part of the channel.

 

 

Nifty medium term trend

 

Trend	UP
Initiation Date	07/08/2012
Initiated at	5336
High since change	5720
Reversal if closes below	5485

 

Open Positions

 

Scrip	Type	Price	CMP	P/L
Infy Oct Fut	Short	2542	2425	17
Infy Oct 2550 CE	Long	104	90	-14
Rel Ind Fut	Long	850	841.5	-9.5
Rel Ind 840PE	Long	21	26	5

 

 

Positions squared off

 

Scrip	Buy Price	Sell Price	P/L
Rel Cap	432	442	10

 

 

Thought for the day

 

Obstacles are the frightful things you see when you take your eyes off the goal - Henry Ford