My last post was on 1st Dec and then NF closed at 5132. Today after 6 trading sessions, we are still at 5122. The markets are in a confused state with no absolute returns generated not only in the last 6 days, but also in the last 2 months. The medium term trend has been positively biased and remains so. My approach on the Nifty has been cautious over the last few months and still continue to remain so.
1. Nifty has not been able to break the range 4700-5150 on the higher side and infact is currently trading at the higher end of the zone......At least 2 days of closing is required above that level and/or the momentum needs to be seen there....
2. I look into the 34ema which stands as major support/resistance zone for types of market (Intraday, daily, weekly)....Currently the deviation from weekly 34ema is too high and that has not been tested since March 2009. So my approach still remains a bit cautious. Obviously, its not a rule and anything can happen in markets.
3. Consider the weekly chart of NF and consider the diagonal joining the lows of 18th March 2008 and highs of 14th August 2008. You will find it to exactly pass through the highs of 17th Oct 2009. Thus that line becomes a strong resistance line for any upward movement currently. If the diagonal is extrapolated, you will find it to pass around 5270 roughly on the current date. Thus the markets actually become strong enough for the uprally once that diagonal is crossed on closing basis. I personally feel that way.....
4. Combining above points, if NF closes above the current range as in point 1, we might see the movement till the diagonal is touched. After that a sharp correction of 10% may be possible till 4600 or so. Now whether it goes above 5150 or not needs to be seen first. The range which I expect for Dec is quite volatile with absolute fluctuations between 4600-5300......
5. Also keep an eye on the dollar index, which can rebound by 5-7% anytime, thereby creating a slide in commodity stocks. Gold is also set for a decent correction particularly with Indian festive buying season coming to an end.
My approach for trading will be to focus on individual stocks. There has been many these days which are in a market of its own. I am personally long on stocks and selling deep OTM calls. Also hedging with shorts on Nifty at higher levels. Please do remember that one should not be greedy and play on huge leverages. Rather play on your capacity even if u trading in futures...We had advised to go long in Aviation in the last couple of months and also asked to buy Bharti and Idea around 280 and 49 respectively in bulk. We have all seen the results so far.....
Happy trading!!!
1. Nifty has not been able to break the range 4700-5150 on the higher side and infact is currently trading at the higher end of the zone......At least 2 days of closing is required above that level and/or the momentum needs to be seen there....
2. I look into the 34ema which stands as major support/resistance zone for types of market (Intraday, daily, weekly)....Currently the deviation from weekly 34ema is too high and that has not been tested since March 2009. So my approach still remains a bit cautious. Obviously, its not a rule and anything can happen in markets.
3. Consider the weekly chart of NF and consider the diagonal joining the lows of 18th March 2008 and highs of 14th August 2008. You will find it to exactly pass through the highs of 17th Oct 2009. Thus that line becomes a strong resistance line for any upward movement currently. If the diagonal is extrapolated, you will find it to pass around 5270 roughly on the current date. Thus the markets actually become strong enough for the uprally once that diagonal is crossed on closing basis. I personally feel that way.....
4. Combining above points, if NF closes above the current range as in point 1, we might see the movement till the diagonal is touched. After that a sharp correction of 10% may be possible till 4600 or so. Now whether it goes above 5150 or not needs to be seen first. The range which I expect for Dec is quite volatile with absolute fluctuations between 4600-5300......
5. Also keep an eye on the dollar index, which can rebound by 5-7% anytime, thereby creating a slide in commodity stocks. Gold is also set for a decent correction particularly with Indian festive buying season coming to an end.
My approach for trading will be to focus on individual stocks. There has been many these days which are in a market of its own. I am personally long on stocks and selling deep OTM calls. Also hedging with shorts on Nifty at higher levels. Please do remember that one should not be greedy and play on huge leverages. Rather play on your capacity even if u trading in futures...We had advised to go long in Aviation in the last couple of months and also asked to buy Bharti and Idea around 280 and 49 respectively in bulk. We have all seen the results so far.....
Happy trading!!!
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