NIFTY

Comments are on the chart.

correction ends

As mentioned here, looking at todays crack, the  upward correction seems to have ended . if future nifty trades or closes below 5980  nifty will start third wave on the down side.

corrective to end soon.

Markets  are  witnessing  increasing volatility this could be because of huge churning of positions by big players, there can be bigger shift in their portfolio from one sector to other OR it could be a serious TOPPING OUT process.

Let us   first study intraday nifty chart. The chart that is being given here is 60 MINUTE NIFTY FUTURE CHART.

After the initial crash of more than 300 nifty points the rally from   below 6000 to 6150 seems to be

a  corrective RECTANGLE  IT will not remain a corrective move if it closes an hour above the   RECTANGLE or level wise above 6162 spot nifty level or 6187 october  fut nifty level.

A  BREAKDOWN from the rectangle below 6010 will open up further downside and the downside could be severe as this could be THIRD WAVE of the down move.

Third waves are known to be  FAST AND FURIOUS.

Please do remember that if nifty takes support at 5924 and bounces back it will be a good SHORT term buying opportunity too. But if nifty fails to give a bounce back move from 5924 than we are to see our next target of 5700. At that time most traders will become bearish but looking at the support zones from various angles (refer our 11^th October 2010 technical update),there will be very strong bounce back

From  around  5700 levels.

a DYNAMITE candle reversal pattern on NIFTY weekly charts.
It is not known much, one of my old friend identified this candle reversal pattern ,way back in around 1996..its called A DYNAMITE.
it develops when one candle has very high shadow (inverted hammer or a shooting star) FOLLOWS by a
a candle with a big lower shadow (HANGING MAN ).

THE implication of this pattern is an EXPLOSIVE down move, when it appears at the TOP.
For my readers though, 5924 /5700 nifty targets have been given, earlier.
it will be intersting to know when the pullback rally actually ends.
it will be a close below 5098,i would call the pullback rally to end.

Bse metal :After hitting an all time high of 20494 in January 2008 metals melt down heavily the bse metal index made a low of 3806 in October 2010 there after in an effort to cross 2008 ,like the other bse indices (banking and it) bse metal made a high of 18560 in January 2010 and 18736 in april 2010 but both efforts were unsuccessful in reaching new highs.again in October 2010 bse metal went up to 18036 but failing even to cross previous highs.

As shown in the daily bse metal chart, the price structure this time is comparable with the structure in april 2010.

In a few days,bse metal index could start falling .we had recommended hindalco as a positional sell on Friday and this week we recommend shorts for sterlite.

Sterlite  cmp:168

Recommendation : sell cmp 168 add shorts upto 177

Stoploss : 181

Targets :150/136/113

Axis bank :

Short axis bank cmp:1465 add shorts up to 1489.

Stoploss :1513

Targets :1436 /1398.

a DYNAMITE candle reversal pattern on NIFTY weekly charts.

It is not known much, one of my old friend identified this candle reversal pattern identified this pattern ,way back in around 1996..its called A DYNAMITE.
it develops when one candle has very high shadow (inverted hammer  or a shooting star) FOLLOWS by a
a candle with a big lower shadow (HANGING MAN ).

THE implication of this pattern is an EXPLOSIVE down move, when it appears at the TOP.
For my readers though, 5924 /5700 nifty targets have been given, earlier.
it will be intersting to know when the pullback rally actually ends.
it will be a close below 5098,i would call the pullback rally to end.

heres the nifty chart.

A MIRACLE ON FIVE MINUTE CHARTS

i have been always mentioning that proper analysis and my trading system. in combination can give huge returns, even trading on intraday basis.
today morning, i wrote here that reliance and sbi can lead the fresh rally on the upside.

here are my trading systems charts (5 minute ), with buy-sell arrows.

traders intrested in my system calls / interested in developing a trading system can add bhoom2tika in yahoo messanger.

what a rally !!

i expected a pull back rally from today, and my best picks were reliance and state bank, and what a massive rally are we witnessing.
enjoy the ride, both ways.

A PULLBACK RALLY POSSIBLE

A PULLBACK RALLY POSSIBLE

From around 6250, i had written about a top, with targets of 5924 and than 5700, yesterday nifty made a low of 5966. looking at extreme oversold conditions of short term momentum indicators and seeing the development of a FALLING WEDGE in sbi and strength in reliance, it seems that we will have atleast a pullback rally on the upside.
please note that upper side is capped around 6128-6166, so for the higher targets, nifty has to close above 6166.
if that happens ,we can see even newer highs for sensex-nifty.
we will catch the upmove using intraday charts in its early stage.
if the upside resumes, reliance, sbi ,ranbaxy, tata chemical, cipla looks very positive.

A MIRACLE ON FIVE MINUTE CHARTS

There were so many things i used in trying to identify a TOP of such a huge rally, and frankly i am not 100% sure weather we have seen an exact top, there were fibonacci nos on daily+weekly+monthly+quarterly charts ,i used fibonacci retracements and i used concept of sensex mimicking ftse.

Analysis apart, its very enjoyable ,satisfactory and exciting to see ,how my own TRADING SYSTEM works with my analysis, a perfect example is given here in the form of nifty options charts.

Just watch 5 min chart signals on these charts and calculate returns possible on trading nifty options as per my system.
if anyone is serious in using my system calls, add bhoom2tika in yahoo messanger.

huge volatility

Last Week was perhaps the most volatile week in a few months time.it did see a very smart rally of 450+ sensex points on Wednesday and than all those gains were quickly got erased in the next two days only.such huge volatily at the top is a sign of topping process.this was clearly indicated in our weekly technical report on 11^th and 15^th October.

Its been observed that when a last leg of an upmove gets retraced faster –in a lesser time-,it could be a start of a fresh leg on the downside.

Nfty has supports at 6030 level which is the support line of the expanding structure,that we had mentioned in our 15^th oct technical view.

THE TOP

In the week-end of 9-10th October, when I started studying my charts, first I started to run my BUY QUERRY, as on eod charts , I got a big list of companies on which my system generated buy calls, but as I started to view most of them, I became skeptical,some how ,the buy calls didn’t fit in my sub conscious,so I thought I should study more charts and try to find out the reason why, my inner mind is not coming in tune with my mechanized system.
I thought, I should check, some Fibonacci ratios as we are very much near to the all time high, after putting some ratios, istarted to count days and weeks of different rallies, and there I was !!!, I got lot many clues of a top, but as past experience suggested, I wanted an euphoric MOVE on the upside, for the LAST BEAR to ruch and cover his shorts.
I had given a clear hint of a top coming this month, 13th October BULL FRENZY DAY ,was the day I was perhaps waiting for., and as we went more nearer to the top on 14th ,suddenly, I found first weakness in Larsen, and from my desk ,first step I took was to pass on a message to book all longs, especially in futures. I also IMMEIDIATELY stop looking and infact started avoiding BUY CALLS from my intraday system on 5 minute charts.
After detailed study of eod charts ,as I saw the MULTIPLE COMBINATION OF FIBONACCI RATIOS AT 5700 NIFTY Level, I was assured that ,we have seen ATLEAST an intermediate TOP.

Mastering Stochcharts: where is the top ?

Mastering Stochcharts: where is the top ?

weakening signs

NIFTY found recistance from around 6210 in the early days of October, but after a brief correction seven days NIFTY found strong support from  6050 around levels and suddenely on 13^th October nifty went up by 2.3% in a day and closed at 6233, but yesterday after making a brief attempt to touch new highs, it failed to do so ,and found some very strong resistance at 6284 ,and closed at 6177 ,falling by more than 100 points intraday.

Looking at the PRICE STRUCTURE   NIFTY and BANK NIFTY both have AN EXPANDING STRUCTURE in the making. This is bearish pattern ,IF  THE SUPPORT TRENDLINE gets broken on the closing basis

I am presenting charts of three stocks ,which are in the process of making TOP REVERSAL PATTERNS

1)      LARSEN AND TOUBRO -    HEAD AND SHOULDER PATTERN

2)      ICICI BANK                     -     A DIAMOND PATTERN

3)      IOC                                 -      HEAD AND SHOULDER PATTERN

In lt & icici , the pattern will be complete ONLY BELOW THE SUPPORT LINE DRAWN on charts.

I have  drawn some Fibonacci  retracement levels on nifty chart and as  commented on the chart, 5924 and 5700 nifty levels have become very very important support levels and probable targets if and when NIFTY BREAKS 6050.

Another Important  point to note that ,the BANK NIFTY has  reached  an important Fibonacci target  by reaching  1.272% of the entire 2008 crash in it.

My conclusion : there  are TECHNICAL evidences started to appear  at TOP. CONFIRMATION of a top will come only from price action. First will be a decisive close below 6083 for nifty fut and 6057 for nifty.if this happens happens than  nifty will have lower targets of 5924 and 5700 first, if not MORE.

BANK NIFTY

IS IT a top ???

NIFTY :::A HUGE RALLY :: MY SYSTEM NEVER MISSES..

A MIRACLE ON FIVE MINUTE CHARTS

THIS PICTURE HAS MORE THAN 1000 WORDS, IN ITSELF !!!!!!

where is the top ?

AS    a technical analyst, its normally a great fancy to try and find out an EXACT top or an exact bottom, the  implications of trying hard to identify either a top or a bottom on day to analysis can be devastating though. So  , over the years I have learnt NOT  to go much deep into  putting too much effort into it, still the fancy remains and so  trying to collect and present some TECHNICCAL facts ,in an effort to  identify atleast an intermediate TOP of the great bull run.

After all,  if we can identify some good corrections NEAR THE TOP, the benefits for traders / investors can be immense.

A . FIBBONACCI  NUMBERS PRESENT IN THE RALLY SO FAR, ON DIFFERENT TIME FRAME CHARTS.

WE have seen some major market tops, near big IPO’S , in the past, THE COAL INDIA ipo is coming in later half of this month, and  ,

  1 )  first week of November will an 89^TH WEEK of the entire rally started  from march -2009. 89 being a fibonacci no. it will be an important juncture in doing time analysis.

2 ).the current  QUARTER is 8^TH  QUARTER , again 8 being a fibbonacci number, so this will be an interesting quarter to watch.

3) next Monday i.e. 18^th October will be 34^TH DAY of the last leg of an euphoric rally started from the sensex low of 17820, coincidently the same date has been fixed for the coal india ipo  !!!!!!!!!!

4) the biiger rally which started  from within the YEAR long channel,  which than broken out of channel  started from the sensex low of 15960 in the last week of may-2010, will have   its 21^st week , completed in the coming week of 11^th oct.

5) the month of November-2010 will be 21^st month  from march 2009,,21 being another fibbonacci number, it will have an interesting impact.

As, can be seen, from these mentioned TECHNICAL FACTS, the coming week/month and the  current quarter  all have  significant fibbonacci numbers present, as I have compared different legs of the  bull- market that we have been in.

So, expect atleast an important  intermediate top, in place around   later half of this month.

One must remember, that these are probable time-zones from where markets can turn down as a correction may start, but price wise for sensex the real confirmation would be 1-3 strong closes below 19771 and below 5932 for nifty.and as we study fibbonaci support levels, 5875-5888 for nifty has now become a very very strong level of support to watch,if there is a sustained downside move below 5875-5888 than only, one should think of any deeper corrections to set in. at present SLOW down moves  upto  5875-5888 should be considered as buying opportunities only.

2) 200 day ema

As shown in the sensex chart, the sensex has shown tendency to test  the all important 200 day ema, TWICE  and after taking support for two times in a row (resistance in down trend),it is seen to break the 200 dema.

In our case, sensex recently tasted the 200 dema in early feb-2010 and than in late may-2010,may be the time is due for the history to repeat itself.

3) mimicking ::it has been like a rule of thumb in doing technical analysis that HISTORY REPEATS ITSELF,chart patterns that one observe in one chart can be presumed to get repeated/mimmicked in same setup in other charts too. Weather it’s a stock or an indice.

When the rally started in march 2009 in india, there were many skeptics about the future of that rally,famous Elliot wave and neo wave theory followers world over predicted  DOOM for usa/Europe and even Indian markets, especially in feb-2010 and than in may-2010, markets throughout the world has proven them all wrong.

The primary argument of all those analysts was  based on an assumption that 2008 crash was some kind of an A WAVE , and the rally started in march 2009 was  B WAVE and LARGER  C WAVE crash is pending, which would asper them break  2008 lows, this scenario is preferred by most Elliot and neo wave practitioners, this is still possible for the world markets, but in our case sensex being so near of the  jan-2008 high, the picture seems different now.

Here, I want to show just one observation, that I have seen in ftse 100 chart(quarterly chart), as one can see here, the rally in sensex in 2003-2008 seems to have been developed like the rally in ftse100 before 2001 crash, THE crash in ftse100 in 2001 seems to have  been repeated in sensex in 2008 crash, what followed in ftse100 in 2003-2007 upmove is like what sensex has done in 2009-2010 rally, so, the crash that came in 2007-2009 for ftse100 is POSSIBLY yet to come in our markets.

AS , it is very clear that sensex is near its  jan-2008 pick, here, sensex can pick out, not being able to cross 2008 pick, OR if  in coming days sensex  crosses the 2008 high, than there will be buying euphoria and there will be some serious panic among BEARS,,  BUT as the saying goes, markets generally tops out when the LAST bear rushes to cover his shorts,so it will be very interesting to observe markets this month.

4 : retracement as support and channel (rectangle) target :

As can be seen on sensex chart ,since October-2009 to early sept-2010, it was moving in a channel ,which can also be called as a rectangle, the move within the channel was roughly of 2000 points,sensex broken out of the channel in early sept and has moved up by 2000 points , meeting the rectangle break-out targets.

Fibo. Retracements is an all important  technical tool used to find out supports /resistance levels.if we assume that looking at the present mood of the markets and money flow from the FIIS, IT IS ENTIRELY POSSIBLE THAT we may see 21200 level of sensex in coming days.if that happens and if we  calculate future fibbo retracements levels taking 21200 as the new high, one can see that the ONE YEAR LONG CHANNE L  , HIGH  and LOW ,BOTH becomes support  levels and also the big gap (after election 2009) area becomes one important fibbo retracement support level.

So ,concluding this article ,we can presume that one important top is nearby.

Tracking the possible top and confirming it using other technical tools, will be a job ahead.