Market updates for 08/10/2012

 

Chaos in Market

 

Today at one point of time there was chaos in  market as well as in the minds of traders as Nifty's day low is 4888!!. Here is the news reported by www.moneycontrol.com

 

The National Stock Exchange index Nifty crashed 800 points this morning, halting the trade, which the bourse blamed on erroneous orders worth Rs 650 crore by a broker Emkay Global for one of its clients.

The NSE said it is investigating the matter and the abnormal orders that resulted in multiple trades at low prices. In a statement after the incident, which halted the trade in cash markets for about 15 minutes, NSE said, "The market circuit filter got triggered due to entry of 59 erroneous orders which resulted in multiple trades for an aggregate value of over Rs 650 crore. "These orders have been entered by a trading member Emkay Global Financial Services on behalf of an institutional client. "These non-algo market orders have been entered for an erroneous quantity which resulted in executing trades at multiple price points across the entire order book thereby causing the circuit filter to be triggered. These orders have been identified to a specific dealer terminal," it added. On the other hand, BSE said the market at the exchange was working fine and there were no technical or other issues at the bourse. However, the BSE index Sensex also fell by about 200 points in reaction to the plunge in Nifty, as there are many common stocks on the two indices.

 The incident occurred on a day when expectations were high for a sharp upward rally on the bourses following various reform measures approved by the Union Cabinet last evening, including on FDI in insurance and pension sectors. At 1220 hours, the markets recovered some lost ground and Sensex was trading 177 points down at 18,880.98 points. The Nifty was down 58.35 points at 5,729.25 points. Earlier in the morning, Nifty had fallen sharply by about 800 points or 16 per cent to a low of 4,997.6.

 

Nifty daily chart

 

 

Most of us were expecting a big rally in the market. But Nifty has closed at 5746 down by 40 points. As long as Nifty is above 5700 let us not short Nifty. RSI is overbought but MACD has not indicated sell so far. There are possibility that Nifty can trade between 5700 to 5800. Breakout on either  side should be used to create long/short positions.

 

Nifty weekly chart

 

 

In weekly chart 123.6% is at 5840. In this week Nifty has reached a high of 5815 and in coming days it is expected to reach 5840-5965. As per Fibonacci retracement in weekly chart medium term trend will remain up as long as Nifty is above 5630. Any dip towards these levels should be considered as buying opportunity. 

 

Chart of the day

 

Axis Bank

 

 

Buy recommendation was given in Axis Bank at Rs.1155 and expected target was Rs.1175( futures). On Thursday's trading session it was a top gainer. There was a gap between Thursday's closing price and trend line resistance and expectation was that it will be filled. Axis Bank fut made a high of Rs.1168 and there was a sharp decline. As long as Axis Bank is below Rs.1165 long position will not be considered.

 

Nifty Medium term trend

 

Trend	UP
Initiation Date	07/08/2012
Initiated at	5336
High since change	5815
Reversal if closes below	5580

 

Open Positions

 

Scrip	Type	Price	CMP	P/L
Tata Motors Fut	Long	281.5	282.5	1
Tata Motors 280 PE	Long	9.3	9.1	-0.2
Coal India	Long	364	363.5	-0.5

 

Position squared off

Scrip	Buy Price	Sell Price	P/L
Axis Bank Fut	1155	1146	-9
Axis Bank 1150 PE	44	46	2
BHEL	249.5	260	10.5

 

 

Thought for the day

 

Don't worry that you are not strong enough before  you begin. It is in the journey that god makes you strong.