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.

Nifty can dance saala.........to our tune

Pardon the word in the title, but after all, every kid in India is singing this song.

It is quite amazing that Nifty is dancing to the few lines drawn on 7th July, and following the upper and lower levels.

Same chart is reproduced again with updated data till the 30th.

Nifty seems to be well on its way to 4740-4750 in August.

Drawing lines on a chart is child's play, ain't it?

Watch Tata Steel in August, can be bought on any dips with a stop below 575 for a target near 700.

4365 - 70 possible??

After being overtly bullish for the last few days, I am cautiously bullish now.

The market is fast approaching towards being overbought on hourly charts, and hence the cautiousness.

The first hurdle for Nifty spot is 4110 - 4120, and the support level is 3990 - 4020 (it should not go below this level this week, for this bullishness to continue).

It is recommended to remain long, and also hedge the position by buying Nifty puts once Nifty spot approaches 4190 - 4220.

The puts can be squared off in loss once Nifty crosses and closes above 4225 Nifty spot, beyond which 4365 - 4370 looks possible on Nifty spot..

Till then enjoy the see-saw ride.

'See-saw' reminds me of the relation between Nifty and the MCX Crude in Rupees.

Nifty spot high on 8th January 2008 was 6357, which will be a high for the Nifty for months to come (years ?? !!) and the high of crude oil on MCX last week was 6358 on 15th July 2008 for months to come (years ?? !!).

Are the bulls and bears in the stock market and commodities markets playing a game of see-saw like the kids do in a park?

Happy days are INDEED here again

On Monday, much before the market opened, I had hinted at a reversal this week (please refer post - Happy Day are here again). It was mentioned that 'it is highly likely that the level of 3800 - 3840 on the Nifty will be protected'.
The results are in front of you.
Not only this, but another big confirmation is an Island reversal (not again......yes..but this time on the upside); see chart of Nifty futures attached.
Readers of this blog are too familiar now with what happens after an island reversal, and how far can one go. For targets, refer the post on Monday, 7th July which gave possible upside targets.
A free recommendation - Above 649, ICICI bank can go to 690+.

A weekly perspective

Talking of a broader perspective, it is better to look at weekly charts since the hourly and daily charts show only gloom and doom. The island reversal which readers might recall was pointed out here, has really marooned the bulls in the deep sea.

The weekly charts too, don't show any ray of hope, nevertheless, a startling fact comes out.

Since 2nd May 2008, Nifty has been going down and closing negative on a week to week basis, and this has now happened for the last 7 (SEVEN) consecutive weeks.

The next week is a Fibonacci number (8), and a good reason for bulls to show some spine.

It is highly likely that the level of 4800 - 4840 on the Nifty will be protected, and the levels on the upside are as shown on the chart.

A possible final target for an upmove is 4530 - 4540 in the next few weeks. The level 4740 - 4750 looks an impregnable fortress as of now, and cannot be crossed so easily.

To put in a nutshell, happy days might be here again (for the middle aged traders who have seen the old Thums UP advetisements)