Why brokerage houses hate us.....

Just 3 calls........says it all......

5th November ---- Buy 4800 ce near 75, sl 60, booked at double in a few days.

18th November--- Buy 5100 pe near 75, sl 60, booked at double in 2 days

20th November --- Buy 5000 ce near 40, sl 30, still holding at 125!!!

No wonder brokerage houses hate us, since their clients hardly trade, but still make money.

It is more surprising that some traders also hate us, saying number of calls are less; but.....

just imagine the above trades starting with 1 lot.....

4800 ce (75 x 1 lot) - Rs. 3750 becomes Rs 7500

5100 pe (75 x 2 lots) - Rs. 7500 becomes Rs. 15000

5000 ce (40 x 7 lots) - Rs. 14000 becomes Rs. 43750, and still counting.

Add timethemarket@ymail.com on yahoo messenger and stop trading for your broker to earn money and stop trading every day.

Final frontier?

It is amazing how Nifty, after crossing the 61.8% Fibonacci retracement level of 4789, has managed to go further ahead thus creating a huge barrier for any fall in the future. Let us see what has happened to the other 2 indices Nifty Junior and Nifty Midcap 50.

Nifty Junior crossed this 61.8% level (9539) last week and has closed well above it (10003.8). Next in line is the Midcap 50 index, and a look at this chart gives an hint as to why action has mainly been in midcaps and not the main index stocks. Nifty Midcap 50 index is currently at 2642, and the 61.8% retracement level of the 2008 crash is at 2857, still a clear 8% away.

It would be safe to say now that the action in midcap stocks will continue till this level of 2857 is crossed.

It needs no Einstein to predict which stocks should be on one's radar - yes, the Midcap index constituents.

Readers can take a pick from the list from here

http://www.nseindia.com/content/indices/ind_niftymidcap50list.csv, and enjoy the ride to beyond 2857.

That does not mean, other stocks will remain sideways - this is just an attempt to identify the ones that are more likely to rise more in the near future.

Chart of Nifty Midcap 50 attached.

DIWALI DHAMAKA

I guess bulls want to prove me wrong when I said this might be a month of consolidation.

If Nifty futures decisively crosses 5150 and stays above it, it has a clear 220-230 points path to travel.

Who better to lead this lap than the leader himself - Reliance Industries. On crossing 2240 decisively, RIL can go to 2375 - 2400. Some other targets -

Tata Steel - 612
DLF - 533
Powergrid - 127
ICICI Bank - 4 digits

As I said in my last post, bulls are systematically raising the bar (support levels).

Once they crossed 4790, they created a base at 4850, then 4920, and now 5070. It will need some real bad fundamental news, or some disaster to break such strong levels.

I also mentioned, after the red Diwali of last year, bulls would like to celebrate in style this year.

The platform is ready, the stage is set, and bulls are just waiting for the director to call...lights, camera, action.......once the BIG B of the Indian stock market - RELIANCE INDUSTRIES crosses 2240.

Is this is a dream? Cannot be, since, it is just 9.30 pm and I am wide awake.

Month of consolidation

Nifty respected the crucial level of 4920 - 4930 by opening well above it on Monday, and shook off intra day bulls who were trying to trade with tight SLs and marched away to glory to close above 5040.

However, options data for this month suggests that bulls want to consolidate either for the full month or at least a few days, and might be also playing games with bears, who start going short merrily on a fall of 20 points, to get trapped later.

Those familiar with the sport - High Jump in athletics, will draw a similarity with what Nifty is doing for the past few weeks / months - raising the bar (support level), and creating fresh supports almost every week.

Stocks to watch - RIL again - a close above 2225, can target 2375, HUL above 295 can target 305 - 312 - 322 and ITC going for 282.

ON THE EDGE OF A CLIFF ?

NIFTY is at a do-or-die level and standing on a cliff. As seen from the chart, the low on Friday was bang on the trend line right from the March 2009 lows, from where this rally began.

Bulls have a huge task on their hands right now, and they will try to protect this level with all their might. Interestingly, 2 main index heavy weights – Reliance Industries and SBI are also poised at extremely critical levels.

NIFTY has to cross a big hurdle at 5000 – 5010 first and then close above 5040 to ensure safety of the uptrend.

The DOW has helped on Friday night by closing above an important level, and NASDAQ has a logical target of 2215 (2139 now).

After having done all the hard work over the last 7 months, Nifty needs to protect Friday lows on a closing basis, to head for the logical targets of 5175 – 5250 – 5295 and finally 5545.

The Vidhan Sabha elections in Maharashtra will not help bulls, since a holiday in between with global markets working, leaves our markets vulnerable for a gap down.

Keeping all this in mind, Nifty needs to close ABOVE 5040 tomorrow. If it fails, traders would be advised to remain light before the holiday and take a fresh look on Wednesday.

It was quite a forgettable DIWALI for bulls in 2008. Will they make it sweet in 2009? The next few days will have an answer to this question. Watch RIL and SBI over the next few hours.

THE SEPTEMBER BEAR IS DEAD………WILL THE OCTOBER BEAR GET ACTIVE NOW?

The fierce upmove late today has taken everyone completely by surprise, but as usual, I am a bit cautious.

I am not sure that the rise was due to action by bulls, and would like to think that this rise was purely due to short covering. How else can one describe ICICI Bank cash on NSE which was trading near 850, suddenly jumping to 890 for a brief moment and within minutes, the high registered was 927.6 !! The volumes in that 1 minute bar when ICICI Bank jumped from 850 to 890 were 2,22, 180 shares! Why would any bull buy at this rate, in such a big quantity? Was it plain short covering? Moreover, the 840 September ca never went above 20-22.

Keeping all this in mind, I feel the rise today was only engineered by bears (short covering).

I am reminded of a similar event in July 2007, when on the last day of that settlement, Nifty had closed near highs, 4624 and on the first day of the August 2007 settlement, market had crashed (Nifty was down 3.8%).

Are we in for something similar tomorrow, well, I would not be surprised.

NIFTY HAS NO FEAR OF HEIGHTS..ONLY US HUMAN BEINGS HAVE IT

Attached is a long term chart of Nifty, right from its inception.

We CANNOT impose our WILL over the market and must learn to understand what the market is intending to do. What better tools than charts to do it. Moreover, Fibonacci retracements are very easily forgotten, and people concentrate on the shorter term and ignore the broader picture.

In the shorter term, yes, market is overbought, has run up quite a bit............so WHAT......says Fibonacci.

From the attached chart, which I repeat, was pointed out a few times earlier, Nifty has crossed the all important 61.8% retracement level of the crash of 2008, and I had explained last week, how the same level of 4780 - 90 was attacked a number of times by bears over a couple of days, and bulls took it way above this level to safety. The level of 4920-22 was also important as mentioned last week (although not as important as 4780-90).

However, Nifty was smart enough to cross that level and close well above 4920.

This cushion of 1-1.2% above 4920, will act against any weak global cues over the long 3-day weekend, and in the event of a gap down open, bulls can step in at this level. If they fail, they have another big support level at 4860, and THEN, finally the all important long term level.

In spite of any weakness, I feel (saying again), we might not see 4780 - 90 again........(ever????....time will tell).

If we have a gap down open, and 4920 is held, that is a good stop for longs, if it fails. buy lower, with a stop loss of 4850. I see an expiry close near 4950ish levels. One can create positions in October series, and I see 5295 or even 5540 in October.

Long term targets for Nifty remain............hold your breath.........8010=====>>>>10110=====>>16190........difficult to believe, yes, for me too!!!

I still feel, Gold will fall, and equities the world over will rise (I can hear a lot of people chuckling :)

We must remember, no high is high in a bull market, and no low is low in a bear market. It is only us humans who have fear of heights, not the market!!!

NIFTY - nadiya ke us paar

The Nifty kaBULL express has only Pit stops on the way.

It is amazing how the market follows Fibonacci levels.

Going back to pre-election days - May 2009 - there was an all important level 3820 which was the 38.2% retracement of the previous year's fall. Bulls had sensed that they might face a stiff resistance at 3820, and as I have been constantly saying, there is only one way to cross such levels --through a gap up, which is what happened on the historic day - 18th May. We have not seen 3820 ever since, and the lowest level thereafter was 3919.

In this case, at least there was a sound reason for such a huge gap up - stable government!!

Over to September 2009 - the next and MORE crucial 61.8% level - 4789 was approaching. Bears had mobilized their forces at 4730, keeping a cushion of 60 points and fought hard. Bulls realised this and they had no choice but to resort to the standard trick of overnight gap up, which is exactly what they did with a gap up from 4782 to above 4800 on 8th September.

Bears had not given up, and they still kept fighting hard but the amount of firepower available with bulls is amazingly clear now.

In the last 20 trading hours, the band 4784 to 4790 has been tested FIVE times intra day and every single time, bulls defended that band with all their might.

I do not think this level can break intra day now, and bears also would have realised that. The only escape for bears now is short covering, and the next level where they can think of attacking is 4922-25, which is the feeble 23.6% of the entire rise of Nifty from the beginning to the all time high of 6357.

We never saw 3820 again. Will 4789 too meet the same fate? Time will tell.........

Another chart attached shows the parallel channel on weekly basis.

No wonder, the extent of retacement by our stock market is equalled only by Brazil and other stock markets are lagging way behind.

Nifty rules the world...............

.

LAUNCHING SOON

In the next few days / weeks............this blog will give way to a regular web-site


www.timethemarket.in

I will update when it is finally launched. Do bookmark it when launched, for a daily market outlook and also some intra-day potential moves for the next day

NIFTY - AAR YA PAAR ???

Last week saw a fierce battle between bulls and bears, and both have marked their LOCs (Lines of Control) very clearly.

As shown in chart, bullishness can continue only on a cross and close above 4760, and then 4800 (which is unlikely, in my opinion, but - who am I to predict). For bearishness to resume, Nifty needs to breach and close below 4570.

For the moment, it is best to behave like a stray street dog, and just follow whoever is likely to feed him!! In this case, at present, it is the bulls who are feeding us lesser mortals; and soon, it might be the bears. It is extremely crucial to keep an eye on the intra day moves and not get trapped in silly overnight positions.

If the above resistances work, and for some reason, Nifty closes close to 4620 - 4650 on any day, it will be advisable to close longs, and either go short or stay away; since it is likely that bears will attack the US markets overnight, and ensure a gap opening below 4580. If that happens, it will also cause a serious rising wedge breakdown, and damage the bullishness of our markets for not only the short term, but the medium term too.

One extremely intriguing happening is that although Nifty has been making smaller but higher tops, BSE Sensex has in fact been making LOWER TOPS!! So, also keep an eye on Sensex levels, 15956 and 16002.

I will certainly be extra cautious at the higher levels given above, and will strongly advise readers to do so too. In my humble opinion, the next sector that bears will look to attack is the IT sector.

Do not be a stubborn bull or bear, and just follow the master..............HAPPY AND SAFE TRADING........

Bulls stuck?

My post last Sunday - 9th August needs no further explanation, and Nifty has behaved exactly as per that road map. Watch out if Nifty futures opens below 4470 and stays below it - it is a sort of Island reversal which can have extremely bearish implications.

If it does not open below 4470, but below 4515, it will face resistance at 4515, and a close below 4515 is bearish too.

Gold too ready to fall---or crash is a better word?

Again...contrary to general perception, I have been bearish in gold for the past few months.

Although Gold has not fallen much, it has not crossed previous tops either, and now, I feel it is time for someone to blink.

Attached is a longish term chart of gold in $.

My view is --- a break below $ 925..will take it all the way to $ 600or lower !! That should be below Rs. 10000, since this will fall more --- INR too going for 43-44, in my opinion.

All those husbands whose wives are pestering them to buy gold, since the local jeweller says it will go to Rs 20000......please follow this chart. Tell them, you can buy 50% more quantity near Rs. 10000. :P

Any takers for this view?

I have spotted a bear lurking round the corner..............

As usual, contrary to general public view, I am bearish for this month.

Chart attached giving the roadmap that I saw in my dreams.

Target 4150----in August.

Please do not trade on this call, since it can go wrong, but it is worth having a few puts on every rise, with a broad stop loss 4750.

Thos who are bullish could do well to glance over the shoulder occasionally for the charging bear, and use tight stop loss.

Do not throw caution to the winds, since i am sure the moment Nifty goes up 40-50 points now, people start giving target of 4900----5100---4200.

It is exactly opposite to last year, when the moment Nifty fell 50 points, one could hear targets of 2500---2200---1900...I also heard a target of 900 for Nifty!!

Since all members here use charts (I hope so), use your own stop losses, and be prepared to short !!!

Suggesting a trade based on my experience and past observation -------if market rises and immediately falls on Monday, and there is a reversal, and keeps rising till Tuesday afternoon, sell longs and go short on Tuesday at 3.29 pm---if it is at the high of the day!!

Bullish stand vindicated

I have been bullish on the stock market right from January 2009 and have posted my views here and elsewhere from time to time, also justifying why the stock market has only one way to go, and that is UP.

I am happy that my stand has been vindicated now, since my target of 3800 is surely going to be achieved in tomorrow's gap up with the euphoria over the UPA making a clean sweep.

It was extremely tough maintaining this stand over the last 3 months, especially, since I was in a pathetic minority, and every roadside panwalla and rickshaw walla was bearish on the stock market.

Now, what next?

If Nifty goes and closes above 3820 for a few days, the next logical target is 4300 with a few hurdles in between.

This euphoria in the political scene will not last long in the stock market and it will be soon be realised that as of now, there is still time for the economy to start doing well.

As Robert Frost had famously written - "The woods are lovely, dark and deep, but I have miles to go before I sleep".........The UPA government will soon realize that they have a lot of promises (pre election) to keep, and many of these promises are not liked by the stock market.

Enjoy the ride till it lasts, but keep an eye on the rear view mirror - the bear is fast approaching.

When will it catch up?

Keep watching here.............

Bulls are here to stay!!!!

Bulls seem to be saying ENOUGH IS ENOUGH!! We can no longer take this lying down. After all, everyone would like to believe that by the year 2020, India will be a superpower. If you are one of those who has this belief, then read on..........

The simple logic is that the stock market is the barometer of the economy of any country. The S & P index of USA made a double top in 2007 as also the FTSE of England. These were the first signs that the economy of those countries (supposedly the BIG 2 of the world) had topped out. Yes, economies had topped out !!

The S & P made an all time high of 1552.87 in 2000, and another high of 1576.09 in 2007, YES, 2007!! US economy topped out in 2007.

The FTSE made a high of 6950 in 1999, and a high of 6930 in 2000 and 6754 in 2007.

All technical analysts will agree that double tops or double bottoms have more meaning when there is a big time gap in these extremes. There was a 7 year gap between the double tops of USA and England.

Let us see what our markets did in this period.

The BSE Sensex made a top of 6150 in 2000 and after 7 years (Jan 2008), not only crossed this,but made a top which was 3 TIMES the top of 2000 - above 21200!!!

In spite of all this, there has been tremendous gloom and doom over the last 16 months, where every rise has been an opportunity to sell and go short.

WHY I FEEL THIS RISE IS HERE TO STAY............TILL WE SEE 3700 - 3750. Before you laugh it off............

What is so great about this target - 3700 - 3750??

Reason no. 1:

The fall from the Nifty top at 6357 to the bottom 2252 has been retraced only 23.6%, when it rose to 3240 in November 2008.

It needs to rise to 38.2%....which is around 3800.

Reason no. 2:

It is also normal for any bear market to test the 200 weekly MA, which is....3750.

Reason no. 3:

A close above 3020 causes a breakout from a triangle which has a height of 700 odd points.

A breakout above 3020 gives a target of...you guessed it right, no rocket science here.......3700 - 3750.

Go long with a broad stop loss of 2500 on the Nifty for a targrt of 3700 - 3750.

Nifty roadmap for next week

An attempt to chart the roadmap for next week.........Attaching 2 charts - the old chart updated (daily) and another one showing hourly candles)

Now that most of the bears are becoming bullish, I don't think Mr. Market will oblige the new bulls, and will try to get the stops of these bulls.

First bearish signs will start if Nifty spot is not able to cross 2980 (green ellipse on chart) in the first hour on Monday and then falls below 2910 (pink ellipse on chart). Target would then be 2840 -50 (orange ellipse on chart).

If 2840-50 holds, Nifty might make one more attempt to complete the pattern on daily charts (3040 - 50).

For Hindi film buffs, this market reminds of the famous Rajesh Khanna dialogue in the classic film - Anand (1970)

'Jahaanpanna. yeh Jeevan To Ek Kathputli Hai Jiski Dor Kisi Aur Ke Haath Mein Hai.'

Yeh TRADER To Ek Kathputli Hai Jiski Dor Kisi Aur Ke Haath Mein Hai.

This is just an attempt at day dreaming and market may behave completely differently...............take the above with fistfuls of salt.

However, options data seems to hint that sub - 2700 and 3100+ levels are very very remote this expiry. 2 more weeks for expiry, and expiry might be between 2800 - 2950.....still lots of time to go, anything can happen.