As long as Mcdowell fut stays above 2540 futures , it can rise to at least touch the upper resistance line near 2700-2720.
A close above 2740 will launch it into a new orbit.
A close above 2740 will launch it into a new orbit.
Tuesday, December 31, 2013
Tata Motors going downhill ?
Tata Motors is giving a bearish Pole-flag formation, and also a triple top on daily chart near 378-378.5.
A short trade has a very good risk: reward ratio. First target for the short can be 367-368 cash, and a close below 365 can take the stock all the way to 325.
A short trade has a very good risk: reward ratio. First target for the short can be 367-368 cash, and a close below 365 can take the stock all the way to 325.
Friday, December 20, 2013
Nifty update
Although the rise today took many by surprise, Nifty is very close to an important resistance, and if that level is not crossed, a very bearish pattern is developing.
The resistance is near 6306 - 6310 on Nifty spot, which is the 61.8% retracement level of the previous fall from 6415 to 6129.
If Nifty cannot cross this level on Monday, it will also complete a bearish flag pattern.
If this bearish flag pattern works, the confirmation will be below 6200 on Nifty spot, and this pattern gives a target of below 5950.
The options data also indicates resistance at higher levels.
6200 CE made a double top at 115 (yesterday and today), thus not crossing this will be a first sign of bears gaining the upper hand.
Secondly, although the PCR at 6200 is a healthy 1.76, (which indicates expiry above 6200), the PCR at 6300 is still only 0.59, which doesn't show any intent by Nifty to cross and sustain above 6300.
3 things to keep an eye on for coming days:
1. Nifty spot not closing above 6310.
2. 6200 CE not crossing 115.
3. PCR at 6300 strike price not rising to 0.9 or 1.
One can buy cheap January OTM puts (6100 or 6000) near 6300 spot with a SL above 6320, in anticipation of the bearish flag coming into play.
If that pattern works, these OTM puts can prove to be multibaggers.
The resistance is near 6306 - 6310 on Nifty spot, which is the 61.8% retracement level of the previous fall from 6415 to 6129.
If Nifty cannot cross this level on Monday, it will also complete a bearish flag pattern.
If this bearish flag pattern works, the confirmation will be below 6200 on Nifty spot, and this pattern gives a target of below 5950.
The options data also indicates resistance at higher levels.
6200 CE made a double top at 115 (yesterday and today), thus not crossing this will be a first sign of bears gaining the upper hand.
Secondly, although the PCR at 6200 is a healthy 1.76, (which indicates expiry above 6200), the PCR at 6300 is still only 0.59, which doesn't show any intent by Nifty to cross and sustain above 6300.
3 things to keep an eye on for coming days:
1. Nifty spot not closing above 6310.
2. 6200 CE not crossing 115.
3. PCR at 6300 strike price not rising to 0.9 or 1.
One can buy cheap January OTM puts (6100 or 6000) near 6300 spot with a SL above 6320, in anticipation of the bearish flag coming into play.
If that pattern works, these OTM puts can prove to be multibaggers.
Wednesday, December 18, 2013
Nifty update based on Options data
As mentioned a few days back, Nifty took support in the 45-65 band on the 6200 CE, and is now above 100.
The level to watch for this CE is in the 135-145 band.
The PCR at 6200 which had gone alramingly to 0.81 at one point yesterday, rose smartly to 1.285 today; however, the PCR at 6300 is not moving much (0.4 now).
If Nifty rises tomorrow as the above suggests, and the 6200 CE finds it difficult to cross the above resistances, and also the PCR at 6300 does not show signs of moving up, Nifty can top out in that region for the short term.
The level to watch for this CE is in the 135-145 band.
The PCR at 6200 which had gone alramingly to 0.81 at one point yesterday, rose smartly to 1.285 today; however, the PCR at 6300 is not moving much (0.4 now).
If Nifty rises tomorrow as the above suggests, and the 6200 CE finds it difficult to cross the above resistances, and also the PCR at 6300 does not show signs of moving up, Nifty can top out in that region for the short term.
Sunday, December 15, 2013
Top made for 2013, or top made till Lok Sabha elections 2014 ?
The title of this post might shock some bulls, but the price action seems to suggest that a top has been made for this year already.
Moreover options data from January suggest that if Bulls do not act fast in early January 2014, this top might not be crossed in the near future at all, and then the next trigger is only the Lok Sabha elections.
After the assembly election results were out last weekend, Nifty did manage to trade at all time highs almost for the full day, however, the last traded price for the day was below that figure, and only the opening high on Tuesday was above that figure of 6357, after which it has always remained below that previous high.
This is not a good sign after crossing an all time high, which had proved to be such a tough nut to crack on many previous occasions.
A typical book breakout above a 5 year old high should have sustained well above it.
In my view, 'bulls' have only scored brownie points by making a new all time high.
Coming to the current scenario, the 5-day fall last week has caused pain for a lot of bulls, and they will keep looking at every good rise to exit. These will act as resistances in any rise.
Nifty can bottom out from the Friday low or worst case 6140-45 (spot), but there will be resistances at every 50-points rise , the toughest being near 6250 and then 6300-6310.
The 6200 CE chart also suggests something similar. The Friday low of 68 is a good support, failing which, 45 can act as a support.
I do not see it rising beyond 130-140 before the expiry.
Moreover options data from January suggest that if Bulls do not act fast in early January 2014, this top might not be crossed in the near future at all, and then the next trigger is only the Lok Sabha elections.
After the assembly election results were out last weekend, Nifty did manage to trade at all time highs almost for the full day, however, the last traded price for the day was below that figure, and only the opening high on Tuesday was above that figure of 6357, after which it has always remained below that previous high.
This is not a good sign after crossing an all time high, which had proved to be such a tough nut to crack on many previous occasions.
A typical book breakout above a 5 year old high should have sustained well above it.
In my view, 'bulls' have only scored brownie points by making a new all time high.
Coming to the current scenario, the 5-day fall last week has caused pain for a lot of bulls, and they will keep looking at every good rise to exit. These will act as resistances in any rise.
Nifty can bottom out from the Friday low or worst case 6140-45 (spot), but there will be resistances at every 50-points rise , the toughest being near 6250 and then 6300-6310.
The 6200 CE chart also suggests something similar. The Friday low of 68 is a good support, failing which, 45 can act as a support.
I do not see it rising beyond 130-140 before the expiry.
Friday, December 6, 2013
Will Miss Nifty fly in Blue Sky territory on Monday?
The markets have now closed for the weekend, and will now open only after the results for the State assemblies are fully declared.
The bulls and bears have gone home with positions they are comfortable with. A peep into the PCR at various strike prices of Nifty gives an idea of what is likely to happen on Monday.
The PCR at 6200 has risen sharply to 1.96 suggesting that recent lows will be held by bulls even if the election results are not upto expectations (lower than 4 - 0 to the BJP).
One positive sign for the bears to look forward to is the PCR at 6300, which is only 0.44 as of now.
In case of a gap up on Monday, this ratio will come into play, and if there is no huge surge in OI of 6300 PE along with crash in OI of 6300 CE, bears will feel comfortable to go short.
Thus, in case of a gap down on Monday, keep an eye on OI of 6200 CE and PE, and in case of a gap up, on OI of 6300 CE and PE.
However, if PCR at 6300 keeps rising, Miss Nifty might start flying in BLUE SKY territory ( all time highs). The current data however, does not suggest that.
The bulls and bears have gone home with positions they are comfortable with. A peep into the PCR at various strike prices of Nifty gives an idea of what is likely to happen on Monday.
The PCR at 6200 has risen sharply to 1.96 suggesting that recent lows will be held by bulls even if the election results are not upto expectations (lower than 4 - 0 to the BJP).
One positive sign for the bears to look forward to is the PCR at 6300, which is only 0.44 as of now.
In case of a gap up on Monday, this ratio will come into play, and if there is no huge surge in OI of 6300 PE along with crash in OI of 6300 CE, bears will feel comfortable to go short.
Thus, in case of a gap down on Monday, keep an eye on OI of 6200 CE and PE, and in case of a gap up, on OI of 6300 CE and PE.
However, if PCR at 6300 keeps rising, Miss Nifty might start flying in BLUE SKY territory ( all time highs). The current data however, does not suggest that.
Tuesday, December 3, 2013
Another potential long trade in Mcdowell
Mcdowell has cooled down after the 'news' and also filled the gap left behind.
The low today also coincides with the 38.2% retracement of the previous rise.
It can be a good positional long now, with the low today as sl, or the low in the first hour tomorrow.
Can we see 2750 this time?
The low today also coincides with the 38.2% retracement of the previous rise.
It can be a good positional long now, with the low today as sl, or the low in the first hour tomorrow.
Can we see 2750 this time?
Monday, December 2, 2013
My take on Nifty for the short term
As can be seen from the chart of Nifty 6200 CE, there is a big resistance in the 188 - 92 band, and unless that is crossed decisively, Nifty can decline.
Longs need to be careful till those levels are held on the CE.
If the CE falls all the way down to the lower support level, Nifty can decline by more than 200 points from here.
Longs need to be careful till those levels are held on the CE.
If the CE falls all the way down to the lower support level, Nifty can decline by more than 200 points from here.
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