Pre-Open, Mar/30

Today is the last day of this week, this quarter and this financial year. On 31st Mar 2006 Sensex closed on 11280 and certainly we are closing above that. Sensex closed at 13786 on the last day of last quarter. Q-o-Q also we will be losing. Last week we had a positive weekly close after a 5 weeks of loss. To have a positive close, we need to cross 13285, which looks improbable to me but not impossible. And yesterday we closed at 12980. (Did you notice all are ending at in eighties?)

Sentiment is definitely week due to rising crude prices (at 66$). Inflation numbers are again in the radar at afternoon. Yesterdays rally in Dow was due to Energy stocks and defensive pharma stocks. Asian markets are trading very flat. Markets are likely to open flat/slightly upward bias and trade flat to lower.

Market is starting the new series very light. FIIs have bought hugely in Nifty options (Hedging!) otherwise very flat numbers in Nifty and stock futures. FIIs have sold in cash market as well. All in all, we don't have anything great to start with, but these kind of days have brought surprise element.

Closing Review - Mar/29

After 3 days of fall, much needed relief recovery for the markets today. Sensex went down 20 points(12832) below the 50% retracement (12852) of whole rise 12315 to 13386. Meanwhile, sensex had formed a kind of Island Cluster reversal pattern because it is consistently trading below the rising gap 12960-13070 created last week. This suggests the underlying weakness in the market. Todays recovery was aided by short covering in the last hour of trading due to F&O expiry for the march series. This was done by the strong performance by the heavyweights like ONGC, HLL etc.

Usually, in up-trending markets, the first target would be the previous high made. Our target should have been 13386 in this case. And in the first day of recovery, we would have crossed at least the 38.2% of the fall 13386-12832. This happens to be 13043. The 50% and 61.8% retracement are 13109 and 13174 respectively. Unless we cross 13174 convincingly, I doubt this pullback. We might be circling here itself until the Annual results are announced in April.

Pre-Open, Mar/29

We had another falling day on yesterday. This is the 3rd consecutive day of fall. We opened with a Gap down and in the last half an hour the fall has got worse. In this 3 days fall, we have almost given back 50% of the rise. For most part of the day. Nifty futures were trading between 3775-3780 in a 5 point band. That was not allowing any intra-day trader to make any money on Nifty futures. And in the last half an hour, 3775 Nifty futures broken.

Sensex is now precariously placed below 12900. 12725 is the last level which can bring bulls back from the on going fall. For the upside, 13061-13123-13185 likely to be the levels to watch out for.

FIIs have bought in cash markets for 289 Cr. And they have sold in nearly 90 Cr in Nifty futures and 660 Cr stock futures. We are seeing mixed Asian markets.

And I feel, the sugar stocks have come to the euphoria levels and traders might switch to another sector. Yesterday IT sector were beaten royally and that might continue.

Pre-Open, Mar/28

Markets are facing very bad news in the morning in the form of weakness in Asian/global markets and crude inching ahead of 63$. We are likely to open lower and trade lower most of the day. The F&O expiry is also playing its own game. The only good news available at this point of time is FII flows in the last two days. We are likely to have support in the form of Gap in 12960 and 12977 is the 38.2% retracement for the rise 12315-13386. 13300-13400 gap is the upper resistance levels.

Postpone any buying for at least half a day or until any confirmation of recovery. If by any chance markets are closing near their days highs, then the strength in the bull trend is affirmed and we are likely to see higher levels in the coming days.

Closing Review - Mar/26

After 1000 points rally in the sensex, bulls could not run further. As Tuesday would be off, people didn't want to carry their positions. And it seems we have successfully tested the 13100 levels today. This is inline with the expectations and there is absolutely nothing to be worried as of now. This has given a nice opportunity to enter at lower levels and good platform for further rises. What is in store for markets when they open on Wednesday? Well, we will see that on pre-open.

And after the Tea and Banks, it is the turn of Sugar stocks to come into the forefront in the rotation game. With always, "news follows market", sugar is having its day out there. It is likely to be continued for 1 or 2 more days.

Pre-Open, Mar/26

It is not going to be an easy day either for the bulls or for the bears. The interesting first half awaits for everyone. Bulls have the task of crossing the 13400 in BSE sensex and beyond that they can take this up to 13554. Bears might be trying to force the things other way if they can break the Friday's low of 13196. But I feel, it is the bulls who is going to win the show today.

FIIs have bought in cash market and sold stock futures. Looks like they have gone for the reverse arbitrage game. There are no news from Global front and that might help us to go little higher.

Nifty futures have turned into premium. The important level to watch out for is 3849 on the lower side. This week is the expiry week and tomorrow being a trading holiday, we better be watchful.

Who has to be blamed for the failure of cricket WC

Please, do not blame the coach, players or the captain. It is the system that is producing these players have to be blamed. If we need to sack coach, captain and/or few players, why not the cricket administrators and selectors? Is your domestic cricket designed to produce tough players? Was there any tough situations players handle in Indian domestic system? Are the domestic players have the safety of having cricket as a career in spite of BCCI having so much money? In the Ranji Trophy 2007 season, more than 60% matches have ended in tame draw with First innings scores deciding the outcome. Big scores by batsmen on Indian Flat pitches, hitting the balls to boundaries, hog the limelight. But never some one who accumulates runs with the help of singles and twos. When we change pitches and domestic matches, we bound to get nurtured players, until then we will be relying on the born talent who will choke more than once in these kind of situations.
We have already suffered in Hockey. And the situation is so pathetic that we are not even top four in Asia in Hockey. And if this continues in cricket, it is only a matter of time.

Closing Review - Mar/23

As expected, a rest day for bulls. They have been running very hard in this 4X1 day race, passing the baton from one stock to another and they were desperate to take rest and charge their batteries over the weekend. Sensex initially rose to 13343 and profit booking of 150 points brought it to the lowest of the day 13196. After this point we were playing the see-saw game and finally settled for the day at 13285.

As the expected profit booking was over, Nifty hit our target of 3900 in the afternoon. Sensex maintains our target of 13554 for the coming days before any kind of serious correction taking place.

Pre-Open, Mar/23

If it was easier to write pre-open for yesterday, it is a very difficult one from here on. For healthier, secular rally from here on towards the all time high is possible only when we have intermittent corrections from time to time. We have had a fantastic rally of 999 sensex points in last four days. There will be little worries even if we correct 100-150 sensex points from here on. But, if we rise faster, then volatility will play the killer role.

At least for some more time, it is safe to buy on dips with a target of 13554 on sensex. With inflation numbers due for the day at noon, expect a slow and sideways movements. On worst case, normal profit booking should be limited to 13100 levels.

As far as Nifty futures are concerned, FIIs bought a huge 2146 Crores in F&O market. And they were net buyers in cash market as well. The comfortable put writing that taking place at 3800 & 3900 levels , and improving Put-Call Ratio suggests that a target 3900+ is achievable in coming days.

Closing Review - Mar/22

A gap up opening, and the gap sustains through out the day without any glitches. Bearish Signal Reversed is one the most reliable and strongest bullish pattern found in P&F charts. That has proved too strong for bears, and they were running to cover their shorts for the whole day. In the opening review, without considering any other levels, I have quoted 13300-13400 to be the resistance for the rally and we are right there on the close.

Nifty futures have closed the Gap that had formed on the budget day. And we have had 4 days of rally. From 3542 low on Friday, we have reached 3880+ levels by today. Will there be profit booking tomrrow? Wait till tomorrow's opening review.

Pre-Open, Mar/22

Today is my easiest day to write about what markets will do next. I don't know, how many of the regular readers of my blog in the past would continue to read today and from here on to know what I am writing. I don't need to scratch my head like what I was doing over the week end, what would change the sentiment in the street. (Otherwise I would not have got those 8 points for Monday's pre-open). All of a sudden, this market has now changed from "no buyers" to "no sellers" market.

On Tuesday, Mar 20, pre-open, I wrote " And above 12900, we get the Bearish signal reversed pattern in P&F charts". I checked my P&F chart site just now. Yes, that has happened. Their target is 14200 now. Please visit the link given below: http://stockcharts.com/def/servlet/SC.pnf?c=%24BSE,P

Should I really quote what world markets are doing as of now? Shanghai composite has just made the new all time high. Dow & Nasdaq 100, has rallied past the previous high levels and thus confirmed the uptrend there. No surprise when Dow crossed 12351, it went higher. Kospi was already hovering around previous highs for last two days. It is trading above this as of now. Strait Times has rallied past the previous high.

Well, I didn't quote what FOMC chairman Ben Bernanke said about inflation and US economy. A true Technical Analyst will say everything is built in the price.

Well, finally, if you are reading for the next resistance level for the market, it is going to be 13300-13400, the falling Gap that was created on the Budget day.

And I think this is enough for the day. Happy Trading!

Closing Review - Mar/21

On the pre-open on Monday, March 19, I was putting forth 8 points why should our markets rebound from lower levels and why they will not seek any lower levels than this. And today, the high was made in style. Even I was cautious, while I was writing my pre-open for today. And I think that is just enough for markets. Again markets have proved that when there is fear and skepticism around, they go up secularly.

Markets opened around 12735 and went down immediately to 12664, caused by the fear of yesterday's close. And by 10.30pm sensex recovered to 12770 and never looked back. A strong consolidation till 1 pm and broke out on the upper side trapping all the bears. Sensex hit a high of 12964.

On Monday, Mar 19 , I wrote about the Tea sector stocks being in the upper circuit. They continued to rally for one more day. And today, they have fizzled out. It is the turn of Bank stocks today. Almost all the banks, private to public and smaller - bigger rallied. Sector rotation game is definitely on. If you are a stock F&O trader, don't chase those stocks after they have rallied.

Pre-Open, Mar/21

The way we have ended yesterday, one would easily be expecting the weakness to continue in the Dalal Street. But, now a days, global markets are determining how we open each day. Looking at this, we can expect a +ve, modest opening and from there on lackluster trading activity. Since Fed Meeting to decide on US rates gets over tonight, we may not act quickly towards bullish or bearish until that is put to rest.

FIIs have been buyers of ~145 Cr in cash market yesterday and ~550 Cr in F&O.

Sensex is likely to open around 12750 and may try to cross 12820-12835 region. On failure to do so, it is likely to go back to test at the maximum 12550 as per my view. Nifty futures might oscillate between 3660 to 3715. Avoid any big ticket new position creation in the market until tomorrow. Rollovers are also adding some volatility to the market.

Closing Review - Mar/20

Today markets have opened with a Gap and traded above the Gap until 1 pm. Post 1pm, markets were swinging in the both direction. It was very difficult to judge, how they will close at that point of time. 12800-1282-12835 region seems to be very difficult to cross. Bears were hammering bulls in the last 45 minutes of trade and closing is not that sweet. Expect the volatility to continue for some more time.

We will do the opening review tomorrow.

Pre-Open, Mar/20

Will the rally continue today also? This is a tricky question to answer on any day. But given that, Asian markets are doing well and DowJones, Bovespa all rallied yesterday, it is unlikely that our rally will fizzle out today.

FIIs have bought 470 Cr in F&O and net seller of 5 Cr in cash market. Put-Call writing suggests the indecisive market. We are likely to open around 12700 and 12789(the previous high that was made on Thursday) likely to offer some kind of resistance for the day. Beyond that, 12820(the Gap) and 12835(61.8% re-tracement for the 13155-12316) likely to be the stiff resistance for the day. And above 12900, we get the "Bearish signal reversed" pattern in P&F charts. But that is a long way to go.

As far as world markets are concerned, shanghai is just 1% away from making the new high. KOSPI is at point of crossing previous high.

As far as Nifty futures are concerned, we are likely to test the 3689 levels from there on, likely to 3700-3720. With two good days of rally, don't forget to take half profits at the end of the day.

Closing Review - Mar/19

All is well that ends well. That sums up the trading activity of markets today. Markets, taking cues from Asian counter parts, started with a gap. I was worried about closing of this gap at some point of time is required. And it happened in the opening hour it self. Sensex dropped to just cover the gap and bounced back like Kangaroo. By noon, it came to the levels of the opening high and never looked back. I guess there was disbelief in the market as it was rising all the day. Volumes clearly show that most of the people stayed away fearing this is just a pre-cursor to the next fall. Well, I could say as long as a bit of fear and skepticism around the markets, we are bound to go up. I doubt the rise when there is a huge volume and very high build up seen.

Nifty futures eased past the 3655, the previous high of Nifty futures achieved on Friday. A lot of short covering was seen as at some point time as the discount was as little as 5-6 points.

Going forward we are likely to test the sensex levels of 12735, 12820-12834 region being the 50% and 61.8% pullback levels for the fall 13155-12315. Nifty futures will target 3689-3695 region. On downside, 38.2% pullback for sensex is at 12523.

The one most important thing, I saw today was the activity in the entire tea sector stocks. Midcaps were freeze in upper circuits. I think traders have started playing sector by sector rotation game. If you are retailer, be careful in falling into the trap. They will completely move into another sector when you get in. This often happens at the beginning of bull market.

Pre-Open, Mar/19

We are getting into a new week and can we have the new look sensex number at the end of this week? It appears so as we have been consolidating at this level for quite some time. It is time and we should move on from here.

Bulls would be expecting good opening then after one hour of choppiness, could expect a higher levels. Here is why:

1. 5 weeks of negative closing so far. 5 is a Fibonacci number.
   
2. US markets came of their lows of the day before closing. Nasdaq is down by 0.25% and S&P 500 and Dow were down by 0.4% which is not bad. In fact, crude decline brought down Oil stocks otherwise decline should be even lesser.
   
3. It was the Friday-nervous syndrome which had hit the world markets on Mar/16.
4. China has increased interest rates to cool down its economy. That is going to help moderating commodity prices and will help controlling inflation all over the world.
5. Sensex EPS of 840 for FY-08 means we are at PE of 14.84 at 12300. Nifty EPS of 240 for FY-08, the PE works out to be 14.8 at 3550. If we factor a growth of 15-18% for next year, our stocks appear attractive.
6. Markets started off going down immediately after the break as inflation number was released. If there have been more down side left, sensex could have gone earlier than that. It was just an excuse for traders to go short at that point of time. It is same as any small announcements or even board meetings have caused the stocks upper freeze.
7. I don't think any nose diving market will give any chance of setting up your shorts, especially for retail to do that, it is nearly impossible. There is some kind of sideways battle is going on and I believe we are at the bottom of it.
   
8. Last but not the least, Asian markets are steady in the morning.
   

Bears have not lost the game also. The two previous lows have been broken and they hope the correction continues this week also.

Whatever kind of position you are taking in this situation, have a suitable SL for your trades, otherwise your capital is at big risk.

Wish you all Happy trading Monday.

Closing Review - Mar/16

Bears have managed to strike early in the day by breaking Nifty futures 3595. The opening is just a dead cat bounce opening and that helped only the bears. And when inflation numbers came at the break time, it was just the news bears were waiting for. They took BSE sensex to 12316 just below the 12327 level where I thought Bulls might try to rescue. 12327 is the 161.8 correction level for the rise of 12504 -12789. And Nifty futures recovered 22 points quickly to 3564 and short covering started. Usually, this 20 point from bottom is the trailing SL I follow. A further attempt towards 3542 (Nifty Fut) was stopped at 3551. From there on it went on to reach 3594 and it came down further 20 points from there by close.

Bears will be happy that they managed to break below the previous two bottom 12390 (Mar/7), 12344 (Mar/5). And they hope for further correction going into next week.

Bulls might be happy that they rescued 120 points by the close. Nifty futures did not go down below the levels of Mar/7 and Mar/9.

So what to expect from here? What we can expect Indian markets on Monday? Anyone closely following markets would say that it is not easy to predict them. But, we will try to do pre-open for Monday.

Pre-Open, Mar/16

With US markets mildly positive and negative Asian markets, we face a nervous day. The big positive being the FIIs buying in futures market yesterday and MFs buying on Mar,14. So there is value in the market at the current levels. Due to lack of directional clarity, people are fence sitting. So who is going to bell the cat? A flat Put-call writing suggest that range bound market.

A morning like this where both bulls and bears find not much of help from their overseas friends, we are set for floor strength on our own . With the way, markets have ended bears seems to be in the advantage position. But bulls wont give up easily too. Such a day like this, usually brings the surprise element.

Expect a low volume day unless break out of either side happens. Play, shorting game if 3595 Nifty future breaks. Bulls would hope for retest of 3690 levels.

Sensex levels to watch out for 12616-12650-12682, the Fibonacci re-tracement levels for yesterday's fall. We will see, whether we can close the "Gap" today on the upper side.

Other data points for today are advance tax numbers and inflation data in the mid-afternoon. US will be releasing their CPI numbers today evening.

Closing Review - Mar/15

Although we started of well in the morning, with Gap up opening, we didn't have a closing that bulls have wished. The gap that got created between 12700 to 12820 in yesterday proved to be the resistance for going above that. A test was attempted in Nifty Futures to cross 3695. At the end of day, bulls are down but not out.

All the world markets, to our right and left did well, why not we? All of a sudden have we been de-linked from world markets? Have we got our own freedom for financial markets also? My answer for this is no, we are not. Just see todays FII figures in futures nearly 700 Crores. Then, who spoiled bulls party? Same old retail who believe the media analysts and also day traders played their part.

Tomorrow will decide where we are heading to. If 3595 Nifty Futures and sensex breaks 12500 , then we have further trouble days ahead. But most likely, we will attempt to cross 3690 in Nifty Futures and 12789-12820 Sensex.

With limited downside, we have more upside. Easy money as a positional trader is available on upside. Instead of playing this range bound, try to get the Big fish. Patience pays pays off.

In Tamil, oodu meen ooda uru meen varum varai, kaththu irukkumam kokku.
(Kokku is a fish eating bird - Here is the translation:- it leaves all the small fishes that are passing it without making any noise. Then, big fish thinks it is safe to go and tries to cross the area. Kokku got what it wanted.)

Going forward, I might be posting limited market hour posts but anyway keep checking this blog.

Mid Afternoon - 15 March 2007

Hold onto your longs.

Never believe the resistance level advised by the media analysts and paid services. Even worse, if you short today. Discount gap already narrowed down to 23. At least I know, two paid services have given short sell calls from morning. They will support the market through out the afternoon. Then they will give buy calls finally. That is the time to take your Half profits.

Markets have just crossed 50% re-tracement of the 13055 to 12504 fall.

Markets Pre-Opening - March 15

Yesterday, after going down by 130 points, Dow has recovered 200 points from its days low. This kind of Intra-day reversals are very strong signal for new consensus for a change of Trend. Bovespa picked the clue as they were in same Time Zone as Dow Jones. We had already witnessed similar Intraday reversal on March 7th, Wednesday. I had immediately pointed out for a bullish trend for a medium trend with a target of 3950/13700 with resistance in the area of 13159-13254 region. And now all Asian markets have opened up and trading above the Gap up opening.

Given that so many factor, what we can expect from Indian Markets today?

Markets will open up. Minimum level that I am expecting is 12618 in sesex. Don't be surprised, if they open above their yesterdays opening price, that is 12700. Nifty futures are likely to open above 3650. Nifty futures will target the immediate Gap at 3680-3758. We are likely to close the Gap today. And by chance, if we stay above 3695 Nifty futures and close above, forget any lower levels for the time being.

Then, there is a caution. Yesterday FIIs were net sellers both in Cash market as well as Futures Market. Inflation numbers are released on Thursday and Friday in USA. So initial advice "Take Half Profits".

Watch again here for important updates during the trading hour.

Happy Trading!!!!

Market Close - March 14

The whole day of trading was confined to the two levels 12500-12620 as my morning opening review suggested. Although, market looks cheaper compared to the 14700 levels, there is a lot of fear due to world markets. This has stopped people taking any firm positions as a trader and even long term investors are waiting for some clarity to emerge.

The stability in the world market will take sometime, at least 5 - 8 days. Anyway, one can wait. Just use this one week to find out the stocks that you are likely to hold on for next 2-3 years. Prepare the list on your own but not suggested by the media analysts. If not, I suggest to open one SIP scheme with any of the leading Mutual Fund Houses and carry on from here.

If you are a trader, do not try to buy at bottom. Just wait for sometime , and capture the move when it moves 20pts from bottom. So if you are using charts, you should be able to see the bottom in the chart clearly. Otherwise, don't trade. Just preserve the capital. It will be handy.

Market Open - March 14, 10.15 am

Markets have opened below the levels of lows previous day considerably. The cut is sharper than I had expected. This way it had made sure that no one is given opportunity to short the market.

We will analyze sensex opening/low values. Opening(12694) was just below the 61.8% pullback(12678) for the current rally of 12344 -13145 that we saw last week. Further it went down to the 200% pullback(12521) of 12788-13055(Monday's High) rally and recovered quickly to the 161.8% pullback of 12622.

Now there is no opportunity to short as it might trade between this two sensex values of 12518 to 12622 for the day. Is there buying opportunities, Yes but wait? I will post here again.

Market Opening View - March 14.

By the close of yesterdays trade, not many were aware of the developments that are waiting to unfold in US markets. Hence, 3800 put was available at 105 Rs, by this, every one expected , Nifty Fut 3695 not to get broken going forward.

But with the new developments, I expect the market to open 3710 (Nifty Fut) or just above 3695(Fut) but may soon break 3695(Fut) and initial target going to be 3658(Nifty Fut). One good thing as of now is, there is no strong Long build up in the futures as of now as every one was talking about correction. Still, thee will be some rush to exit door will be happening.

And into Asian markets opening, Nikkie is in the shouting distance of breaking the previous low. Kospi and STI are faring better in that count. One thing is sure. "We will have one more round of shedding of weaker hands out of the market".

Discalimer: This post is not an solicitation to trade with levels mentioned here. Please, trade at your own risk. And I am not responsible for your Profits and Loss.

World Markets Further

Guess what: Markets except India might be falling in A-B-C pattern. "A" fall was over last week. And "B" recovery is complete Yesterday. And they are into "C". This can go up to 100% "A" or sometime 161.8% of "A". We are again entering High Volatile world markets. So from here on another 8% to 12% fall if they break previous low. That will be a just the confirmation.

Well:- the earlier fall "A" lasted for 5 days and recovery "B" lasted 5 days. Time equality achieved. Hence "C" will also fall for 5 days (time equality) or 8 days (161.8% of time equality).. And If in 61.8% time, that is 3 days, previous low is breached in world markets, then 8% to 12% fall in 5 to 8 days is a certainty.

If you can not do those calculation to find out what will happen, then come back to my blog again.
What will happen to Indian Markets? Next blog after 14th mid afternoon between 11.45 to 12.30.

Market View Today 13-MAR-2007 (09:53:47)

Asian markets under going minor pullback after 5 days of rally.. Healthier one in my view. As long as they don't break yesterdays low, they are bullish.

India: Markets might open Flat and drift slower for fist half. Wait and watch.. before venturing..

Test of both 3695 and 3775 is possible. Could it can be a another inside day? Any breakout of this then explosion tomorrow?

Note:
This I published today at http://www.vfmdirect.com/forums/show.cgi?topicid=1173779627
I am putting it here for archiving my posts here.

World Markets - 14th Early Morning

I think this is the right time to warn every one what happened in Dow Jones. I was just seeing the intra-day graph Dow. As yesterday's low(March 12 - that's 12205), got broken, the fall is severe. This is a classic property of good downward trend. (In uptrend - If high is broken then huge up move). Now every one understand, how I gave 3695 as SL for going long and at the same time how below, I am bearish. Morning, will look at Asian markets and post here..

Will also unleash, another advice, Although I went long by 100 Nifty, I booked 50 (Half profits) Nifty profit since Uptrend level was not reached and convincingly broken. I hope my fellow friends follow this principle of taking Half Profits whenever some yellow card is shown...

Well.. Brazil Bovespa is no exception for following this property of downtrend. It is fall is even sharper and classic.

World Markets

March 13th, Tuesday Morning :-

In this pullback, after worldwide sell off, None of the world markets have given the sell signal, (Simplest one: breakig the previous days low) (Even if they have, they are false signal as they have simply made a new high afterwards). So we are also likely to head towards the 13300 and to 13700 the previous two highs that we made. But minor pullbacks are not ruled out. We will get further clues on tueday.
Watch out this space, if global markets break, I will be posting my views here.