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...............

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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........