Next week market outlook from 14/11/2022 to 19/11/2022from from

·       In the coming week investors will be watching a spate of economic data, including US retail sales numbers on Wednesday, for more clues on whether the Fed's monetary policy tightening is cooling the economy. On the domestic front, Indian Retail Inflation data (CPI) will be announced on Monday which will be important for the market while most of the quarterly results have almost announced.

·       Expects rally to continue in the domestic equity on optimism that cooler-than-expected US inflation will lead to smaller rate hike by the US Federal Reserve and on China’s move to loosen its Covid Zero policies. On the domestic front, USDINR fell sharply to close 2-month low at below 81 indicated aggressive FIIs buying interest (FIIIs net buyers nearly Rs7k this week). Moreover, strong macro data - October PMI reported 6-month high to above 55, 4-month high September IIP data, stable oil price, impressive quarterly results and strong GST collection, will be positive for the market sentiment. Expect beaten down metal (China to relax zero covid policy stance) and IT stocks (global IT Major Index Nasdaq gained 7% this week) will be big positive for next week

·       The domestic market joined the global run as markets across the world cheered the lower-than-expected US inflation data and this was one of the best week in the stock market history. Indian bourses ended on record supported by strong domestic macro data and blessing by US inflation data which has fallen to significantly lower than estimated level along with core inflation number.

·       Global market witnessed biggest gains (between 3-8% and S&P 500 close to 4000 mark psychological level) in over two years after the US Inflation for October has come in at 7.7% (expectation at 7.9%) against previous month was at 8.2%. Core Inflation fell to 6.3% while expectation was 6.5%. US Dow Jones climbed up over 1300 points or 3.5% and Nasdaq Composite skyrocket by 7% against the previous week close. A slowdown in US inflation could mean the Federal Reserve won’t have to be so aggressive about raising interest rates. Market expect that the US Fed to raise rates again next month but by a smaller margin of one-half percentage point after a series of 0.75 percentage-point increases. US 10-Year (3.80% from 4.2%) and 2-year bond yield declined by 10% on a single day while Dollar Index fell to 4-month low to below low to below 106.

 

Weekly Update (Week on Week)

 

·       A sharp recovery in the rupee and unabated foreign capital inflows further bolstered sentiment. Sensex zoomed  845 points or 1.40% to settle at 61,795 -- surpassing its previous closing peak of 61,765 hit on October 18, 2021. Likewise, the broader Nifty rallied 233 points or 1.3% cent to finish at 18,350. This week, there was rally in PSU Bank, IT and Metal stocks.

·       Banking stocks witnessing major gainers this week led by HDFC twins and PSU Bank. Nifty PSU Bank Index soared by 6% after announced strong Q2 results. PSU Bank Index surged by 28% just one month. Nifty Metal Index gained by 2% on expectation of improve demand after China announced to partially remove covid lock down and US Dollar Index fell to 3-month low. Nifty IT Index advance 2% due to attractive valuation and Global IT Major Index Nasdaq Composite spiked by 7%. However, Nifty Pharma Index slipped 3% due to poor quarterly results announcement. Nifty Auto Index slipped by 2% after auto major Tata Motor reported lower than expected Q2 results

 

Short Term Buy

 

·       Cochin Shipyard, National Aluminium, Adani Ports, HDFC, Bank of India, SAIL, Tata Steel, Zomato, BoB, LTTS, Coforge

 

Long Term Buy

 

·       Axis Bank, Hindalco, LIC India, Infosys, TCS, SBI, Zee Entertainment, Reliance Industries, HAL, Patanjali Foods, Indian Hotel

 

Technical Levels

 

·       Nifty index has formed a Bullish candle on daily and weekly frame and has been forming higher lows from the last six weeks. Now, it has to hold above 18300 zones, for an up move towards 18500 then 18600 zones whereas supports are placed at 18188 and 18088 zones.

·       Bank Nifty has formed a Doji candle on daily frame and a Bullish candle on weekly frame. Now it has to hold above 41840 zones for an up move towards 42500 and 42750 zones whereas supports are placed at 41750 and 41500 zones.

 

Global Market Update

 

·       US, Europe and Asian markets gained between 3-8% this week.  The tech-heavy Nasdaq Composite rose 8% this week to notch its biggest weekly gain since March on optimism that a slower-than-expected US inflation print will lead to smaller rate hikes by US Fed. Moreover, expectation that the China to relax zero covid policy stance will be back in global demand. US Inflation for October has come in at 7.7% (expectation at 7.9%) against previous month was at 8.2%. Core Inflation fell to 6.3% while expectation was 6.5%. Cooler-than-expected US inflation data set the stage for a slowdown in aggressive interest-rate hikes resulted US 10-Year and 2-year bond yield corrected 10% from the peak and Dollar Index fell to 3-month low.

 

Commodity

 

·       Gold surged 5% to 3-month high at $1771/ounce following tweaks to China’s Covid-19 rules, the US inflation print, and weakness in the dollar, and events next week will shape whether gains hold or wither.

·       Brent Crude advance 2% to $96/bbl following China's announcement that it would relax some of its hardline Covid-19 restrictions, including shortening its quarantine requirements for international travelers by two days. Market expectation global demand will improve after China announced to partially lifted covid lockdown.

 

FIIs and DIIs

 

·       FIIs were net buyers Rs6330cr

·       DIIs were net sellers Rs2255cr

 

Results

 

·       Monday – Aarti Industries, Abbott India, Bharat Forge, Biocon, CESC, FDC, Grasim, GM Infra (Airport), Greaves Cotton, HUDCO, Indiabull Housing, IRCTC, IOL Chemical, Kaveri Seed, KNR Construction, LUX Industries, Mazda, Munjal Auto, Mishra Dhatu, NMDC, NBCC, ONGC, Parag Milk, SpiceJet, Sobha, Star Cement, Stovec, Uttam Sugar

·       Tuesday – Rajesh Exports

 

Corporate Action

 

·       Monday – PFC Dividend Rs5, EPL Rs2.15, Compuage Infocom Right issue 8:25 at a premium Rs18

·       Tuesday – Aegis Logistic Dividend Rs2, P&G Rs15, Coal India Rs15, Amaraja Batteries Rs2.90

·       Wednesday -  Motherson Aumi Wiring Bonus 2:5, Computer Age Manage Rs8.50

·       Thursday – Dhanuka Agritech Share Buy-Back, PDC Dividend Rs2.50, Oriental Carbon Rs7.

 

Global Data

 

·       US – Tuesday – Empire Manufacturing, Food, Manufacturing and commodities. Wednesday – MBA Mortgage Application, Retail sales data, Industrial Production Data, NAHB Housing Data. Thursday – Housing Starts, Initial Jobless Data. Friday – Existing Home sales Data

·       Europe – Monday - House Price Data, Economy Survey (UK), Economy Survey (Germany), Economy Survey (France). Tuesday – Whole Price Index (Germany), CPI, Unemployment Rate (France), Payroll, Employment Rate, Jobless Claims (UK). Wednesday – CPI, Retail Sales (UK). Friday – Retail sales, Consumer Confidence (UK)

·       China – Tuesday - Industrial Production, Industrial Production. Wednesday – New Home Sales

·       India – Monday – WPI, CPI, Exports & Import.

How is a bonus issue different from a stock split?

Most readers seem to have some confusion about whether bonus issue and stock splits are the same or not. They may appear to be the same especially in the eyes of a person not well-versed in finance. But they are, in fact, two different things. This article will help you to get a clear picture of the difference between the two.

WHAT’S THE DIFFERENCE?

Simply put- A bonus is a free additional share. A stock split is the same share split into two.

Usually companies accumulate it’s earnings in reserve funds instead of paying it to share-holders in form of dividend. This accumulated reserve fund is then converted into share-capital and allotted to share-holders as bonus shares in proportion to their existing holding. So, Share-capital of the company increases with a concomitant decrease in its Reserve profits. Share-holders get bonus shares in compensation of dividend.

But when a share is split, say, from Rs 10 denomination to Re 1 denomination, there would neither be an increase in the share capital nor a concomitant decrease in the reserves of the company. This is because while in a bonus issue a person having one share of Rs 10 face value would get another share of the same face value should the company go for a 1:1 bonus what would happen in a stock split is his one Rs 10 share would now be converted into ten Re 1 shares.

WHY DOES A COMPANY ISSUE BONUS SHARES?

One of the major reasons why companies declare bonus issues is that a higher number of shares improves float and liquidity and thereby traded volumes of the stock. A lower price also makes the stock seem more affordable to small retail investors, who might otherwise give it a miss at high price levels. Another aspect of a bonus issue is that it reflects the confidence of the company in its ability to service a larger equity base. Thus, bonus issues are said to be a good signaling mechanism on the company’s capacity to deliver future benefits to shareholders in terms of increased dividend.

Not all is positive with a bonus issue. In some cases, a bonus share ploy is used by companies to mask flagging performance and to perk up sentiment.

For example, a company has an authorized share capital of Rs. 1,00,000. It has issued 10,000 shares with a face value of Rs. 10 each. Thus, its issued share capital is also Rs. 1,00,000.It has an accumulated reserve of Rs. 10,00,000. It decides to issue bonus shares in the ratio of 1:1 or “1 for 1” – that is, 1 bonus share for each share held. In this case, it transfers Rs. 1,00,000 from its reserves to its authorized share capital. Thus, its reserves come down to Rs. 9,00,000, and its authorized share capital increases to Rs. 2,00,000.Using this new share capital of Rs. 1,00,000, the company issues 10,000 new shares, each having a face value of Rs. 10, and gives a new share – the bonus share – for each share held. Its issued share capital also goes up to Rs. 2,00,000.

HOW DOES BONUS SHARE AFFECT INVESTORS?

Immediately, It doesn’t affect your investments anyway. Post the bonus, the share price should fall in proportion to the bonus issue, thereby making no difference to the personal wealth of the share holder. However, more often than not, a bonus is perceived to be a strong signal given out by the company and the consequent demand push for the shares causes the price to move up.So, when stock prices move up in the long run, there will be dramatic increase in the wealth you’re holding.

WHY DOES A COMPANY SPLIT IT’S STOCK?

The primary reason is to infuse additional liquidity into the shares by making them more affordable. It needs to be reiterated here that the shares only appear to be cheaper, though it makes no difference whether you buy one share for Rs 3,000 or two for Rs1,500 each.

HOW DOES IT AFFECT YOU?

It is like cutting an eight-inch pizza into 12 slices from four slices before. But if you want to buy the shares of a company which are frightfully expensive, you can now buy them for less. Except for that , in a stock split, fundamentals about the company does not change, the issued share capital remains the same, the revenue remains the same, and the profit remain the same too! But, since the number of shares issued increases, the profit per share (or the Earnings Per Share – EPS) decreases by the same factor.

So, if EPS is Rs. 15 per share for a share having a face value of Rs. 10, after a 10:1 stock split, the EPS would come down to Rs. 1.5. But since you would be holding 10 shares now, your share of EPS remains the same: Rs. 1.5 * 10 shares = Rs. 15, which is as before!

So, if the PE of the stock is 20 in our example, the price would go down from Rs. 300 (EPS of Rs. 15 * PE 20 = Rs. 300 per share) to Rs. 30 (EPS of Rs. 1.5 * PE 20 = Rs. 30 per share). But again, since you would be holding 10 shares now, your actual holding remains the same: Rs. 30 * 10 shares = Rs. 300, which is as before!

So, there is absolutely no change anywhere, except for the number of shares traded!

WHY DOES MARKET CHEER STOCK SPLITS?

Stock market interprets a stock split as a statement of confidence by the company – it interprets a split as a signal from the company that it is confident about its future growth. Also, a stock split increases the number of shares traded in the market, which increases liquidity.These factors are considered positive, and therefore the market reacts positively!

TAX IMPLICATIONS

Bonus shares- As far as tax is concerned, since no money is paid to acquire bonus shares, these have to be valued at nil cost while calculating capital gains. The originally acquired shares will continue to be valued at the price paid at the time of acquisition. An incidental tax planning benefit is that since the market price of the original shares falls on account of the bonus, there may arise an opportunity to book a notional loss on the original shares. This is known as bonus stripping. The Indian Income-Tax Act has introduced measures to curb bonus stripping.

Stock splits – As far as the tax implications for stock splits are concerned, well, there aren’t any. A stock split, like a bonus issue, is tax neutral. However, when the shares are sold, the capital gains tax implications are different that what is applicable for bonus issues. Here, the original cost of the shares also has to be reduced. For instance, if the cost of the 100 shares at Rs 1,500 per share was Rs 1, 50,000, after the split the cost of 500 shares would be reduced to Rs 300 per share, thereby keeping the total cost constant at Rs 1, 50,000.

CONCLUSION

So, if you are an investor in the company, you have reason to celebrate when you get a bonus. But don’t celebrate when your company splits stock. It’s is just a technical change in the face value of the stock. But if you want to buy more shares, it is good news because now, you will be able to afford them or at least get them cheaper!

How to Be a Disciplined Stock Trader

This is a brief look at how to inculcate discipline when trading stocks.

Unlike in the forex or commodities market, trading profits in the stock market can only be gained when the value of the equity in which the trader has invested in appreciates in value. This puts a lot of responsibility on the shoulders of the stock trader or the manager of a stock-based investment club to make sure that trade calls are in order and that the stock is purchased at the right time to allow for appreciation and profitability.

The key to making money from stocks is to buy low, sell high. Put another way, finding and buying stocks that are presently undervalued, but have appreciative potential. It takes a lot of discipline to trade the stock market successfully. Many traders have been undone by not following the rules of stock trading, or by not knowing how to exert some discipline when trading stocks.

Trading discipline will root out many investment mistakes, and we shall now look at some ways a trader can bring some discipline into his stock trading. One of the easiest ways to lose money in the market is by being greedy. Warren Buffett, arguably the greatest stock investor of our time put it succinctly: “be fearful when the market is greedy, and be greedy when the market is fearful”. What exactly did he mean when he made these statements?

To understand the quote, let us explain what market greed is all about. Market greed is a situation where traders plunge into the market during a bull market to buy stocks for a quick profit run, especially when there are no justifiable fundamentals to support such a bullish momentum in the markets. At this point, what is driving the market is herd buying, a situation that arises because so many people want to profit from the bull that there is a demand surge, creating rising prices. Usually when prices have risen so high, professional investors “become fearful” of losing profits, and sell to the ready group of “greedy” herd buyers to take profits. Volumes begin to taper off as high prices begin to scare off more people from buying. The inevitable price collapse that follows causes many retail investors to lose money. Prices eventually hit rock bottom, and because many retail investors who are uninformed about how the market works would be “too fearful” to buy at this time, the smart money investors who recognize bargain opportunities when they present themselves, “get greedy” and buy into the opportunities cheaply, waiting for another round of bullishness to play out.

If you want to be a disciplined trader, you need to adopt the mindset of the smart money investors. They only buy into bargain opportunities. If prices have risen to a point where the effects of fundamentals have worn off, they exit the market. They know when to buy, when to take profits and when to take cover.

Smart money investors usually use some data from earnings reports such as the price-earnings ratio to make trade calls. It is a hallmark of market discipline to look at some of these figures as well in order to achieve the same results as the smart money investors.

Technical outlook of Nifty Next week 19/08/2013 to 23/08/2013

Traders witnessed horror show by market on Friday, it was one of the sharpest fall after almost four years, Nifty remained positive for all starting four days from the lows of 5510 it made a high of 5754.55. But Friday, we witnessed scary fall from the highs of 5716.60 to 5496, loss of 234 points on just a day. Now Nifty has crucial support from it long term rising trend line which comes near 5400 levels. Momentum Oscillator MACD has already given Bearish Convergence and recently moved beneath 0-level on weekly charts in recent past, and Stochastic is moving towards oversold territory, but situation is still scary on monthly charts and it clearly indicates that still we have more to see. On friday Nifty closed below the weekly pivot point 5586.15. Nifty has immediate Resistance at 5526 and then at 5547. Nifty must cross 5570 and stay above 5593 on Closing Basis to continue its Up-move. If Nifty manages to cross and decisively close above 5616, it may go up to 5636 – 5656 - 5685. Further Up-move Levels will be 5708 – 5723 – 5749 - 5766.Nifty has immediate Support at 5497 and then at 5477. If Nifty breaches 5460, it may go down to 5434 – 5420. Nifty will get weak below 5402 and may go down to 5382 – 5362 – 5342 - 5330. Further Down-move Levels will be 5318 – 5298 – 5278 – 5272 – 5240.

CNX IT after posting a high of 8032.25 gave us Doji candle on the same day when it posted this high, which is not at all healthy sign, and even if we look at past fortnightly movement then it is no better, because IT Index remained almost range bound within 300 points of 7700-8000, but importantly it didn’t fall. But now there is signs of exhaustion and we have to accept it. Nifty and CNX IT Index gives clear bearish signal, only we have little hope on Bank Nifty where, we are expecting some support should come at 9400 levels, if this level is not hold then 8800-8500 is not very far ahead. 

Nifty Trend looks to be sideways to Negative and Nifty is trading in Over-Sold Zone. Global Cues are almost Negative. Nifty may continue its Upmove if it manages to HOLD above 5547 on Closing Basis, crosses 5570 and stays above 5593. The Upmove will be up to 5616 – 5636 – 5656 - 5685. On the other hand,  if it HOLDS below 5460, breaches 5434 and trades below 5420, to look for.we are seeing support near 5450 levels, which will be deciding level, Below  it is likely to be dragged down to 5402 – 5382 – 5362 – 5342 - 5330.

Moving Averages

Average	20 Days	50 Days	100 Days	200 Days
SMA	5777	5800	5839	5852
EMA	5719	5798	5826	5776

CMP	5507.85
Nifty Range	5249 to 5766
Pivot Point	5586
Turning Points	5502 - 5593
Positive Above	5579
Negative Below	5437
Bull Turning Point	5650
Bear Turning Point	5366

Factors of Concern/Major Events

1. Domestic and Global News/Cues (Especially from European and U.S. Markets).

2. Status of Rupee versus Dollar. Rupee depreciated to lowest - 62.

3. Impact of NSEL Issue.

 

Outlook of nifty on 13/08/2013

Markets ended on a positive note this Monday with 50-share Nifty regaining psychological level of 5,600 after the central bank announced more measures to support the domestic currency. The Reserve Bank on Friday announced that it will sell government bonds worth Rs 22,000 crore every Monday to check volatility in the forex market. The 30-share Sensex rose 157.64 point to end at 18,946.98 and the 50-share Nifty gained 46.75 points at 5,612.40 levels, market breadth was positive. Out of 2,256 stocks traded, 1,366 stocks advanced while 763 stocks declined on the BSE. The currency traded at 61.06 a dollar from Friday's close of 60.88 at the Inter bank Foreign Exchange Market. Globally asian markets were green while European market trading down. Nifty closed above 5600 so we can expect some short covering,on downside nift has support at 5550 and a close above 5650 will be a slight bull signal, So short term buyers better buy above that level.

Positional Immediate support for NIFTY is 5500

positional Resistance for NIFTY is 5704 5810 5826 5837 5855 5863 5864 5898 5911

Pivot point 5604.5

Intraday Supprort 5604.43 5588.40 5565 5517.6 5478.2

Intraday Resistance of nifty 5628.3 5636.3 5651.8 5660.9 5691.4 5738.8

Techical outlook of nifty next week 12/08/2013 to 16/08/2013

Nifty trend is very weak, where Nifty lost around 112 points, with weekly range of 234 points. From last three weeks Nifty is falling sharply and totally lost 463.3 points on closing basis.
On Tuesday, Nifty got most of the damage during last week. While on closing of the week, we got Engulfing Bull candle, which signifies reversal and support from lower levels. It indicates traders can stay long with stop of 5490. Nifty made a low of 5477.20 on 10th Apr’13 and Nifty posted a low of 5486.85, it almost formed the double bottom. Relative Strength Index is showing Positive Divergence on daily chart, from the above observations we feel technical pullback in Nifty can’t be overruled in coming sessions. But any bad news relate with fundamentals can destroy the technical pull back on short term. So trade cautious with eye on news and global trend. So monday the first resistance for nifty is at 5584-89 level,On downside first support is at 5528-23 level. The trend is still weak but a strong move above 5600 may cause some short covering and a close above 5650 is a slight bull signal.Below 5520 sellers are strong.So no long for intraday unless nifty strongly stays above 5600.For trend again to be in bull side a close above 5650 is required So short term buyers better buy above that level.

Positional Immediate support for NIFTY is 5480

positional Resistance for NIFTY is 5704 5810 5826 5837 5855 5863 5864 5898 5911 
Intraday Resistance of NIFTY are 5601.9  5632.9  5677.1 5692.8
Intraday Support of NIFTY are 5527.4  5498.4  5455.3  5440

Learn to Identify Breakouts in Trading Charts

The breakout is one of the most important concepts in technical analysis. It’s a direct, graphic representation that something happened to change the market’s sentiment toward a security. In the simplest terms, a breakout implies that a trend is over, at least in its present form. After a breakout, the price can go up, down, or sideways, but it seldom resumes at exactly the same level and rate of change you had before the breakout.

The first line of defense 

Your first line of defense is the configuration of the breakout bar. A simple judgment is to see whether the breakout is a violation of the channel line by the close, and not just the high or low.

A special version of the close rule is to evaluate whether the bar that breaks the line is a key reversal bar:

In an uptrend: The key reversal bar has a promising open — above yesterday’s close. The price even makes a new high over yesterday’s high, but then the price crashes and delivers a close at or near the low and below yesterday’s low. The market psychology isn’t hard to read — the day started out well but then something happened to make negative sentiment rule the day, right into the close.

In a downtrend: The key reversal bar initially confirms the trend — the open is below yesterday’s close and the price even makes a lower low. But then the price reverses direction and rallies strongly into the close, so that the close is above yesterday’s high. Good news must have come out.

Does volume verify?

Breakouts are often accompanied by a change in volume, usually an easily noticed higher level. Consulting volume for confirmation is in keeping with interpreting events on the chart in terms of supply and demand. You can verify that the breakout isn’t random by seeing an equivalent change in volume:

Increase in volume: Extraordinarily high volume on one or two days is named a volume spike and often accompanies the end of a strong trend, either a rally or a crash. Buying and selling interest is frenzied.

Decrease in volume: If volume declines steeply after holding steady at about the same level over the life of your trend, demand is falling off but so is selling interest. You don’t necessarily know what falling volume means, but it may foreshadow a breakout. All the people who wanted to sell have done so, and the people still holding an inventory aren’t willing to sell at the current price.

Size matters — and so does duration

You can use a filter to estimate whether a breakout is meaningful or can be ignored. Afilter is a formula or a procedure used to modify an indicator. In this instance, the indicator is the break of the channel line. A filter can modify the amount or duration of the breakout:

To modify the size of the indicator: Add some percentage of the total range to the channel line. You stipulate that to constitute a real break of the channel line, the new high or low must surpass this extra amount.

You can also specify that the close has to break the line by x percent to qualify as a real breakout. In either case, the result is a new channel line that is a little farther out, effectively widening the channel.

To modify the duration: Specify that you’re willing to accept one price bar violating the channel line, but not two. Or perhaps two days of violation, but not three. Also, you can combine the duration rule with the close rule and specify that the close beyond the line for x number of days is the sign of a true breakout.

Experienced technical analysts warn against making size and duration filters too complex and fancy, for a number of reasons:

Rules count. The breakout principle is a powerful and well-known concept. A lot of other traders in your security are likely to heed a breakout in a black-and-white way. They always exit on a downside breakout of a support line by the low, for example.

One size doesn’t fit all. No single correct filter exists for every security under all circumstances. You only know whether a filter is usable by testing different filters on the price history of each security, one by one.

Blending works only with coffee. The orderliness of your security can change without warning. Looking back over historical data to find the best filter has an enormous flaw: Chances are that you’ll come up with a blended percentage filter that’s too small for an orderly move and too big for a volatile one. And if today is the breakout day, you don’t know how volatile the upcoming move is going to be.

from the pages  of book, Technical Analysis For Dummies, 2nd Edition By Barbara Rockefeller

Technical outlook of nifty for 26/07/2013

As we predicted earlier nifty reached 5900 on expiry, It was a disappointing end to the July series as Nifty ended the day at 5907, down 83 points while the Sensex closed down 285.92 points at 19804.76. About 843 shares have advanced, 1411 shares declined, and 186 shares are unchanged. ITC , HUL , Wipro were major losers in the Sensex. I feel it is healthy correction after reaching 6100, I feel market may touch 6000  again, if the nifty close above 5935 on friday. So Friday nifty face the first resistance at 5933-36 level, and on down side support are at 5880 and 5850. Now USD/INR trading at 58.98 and crude trading around 105.  So watch market closely and trade accordingly.

Positional Support for NIFTY 5893 5855 5848 5846 5839 

positional Resistance for NIFTY is 5943 5968 6016 
Intraday Resistance of NIFTY are 5959.1 6001.9 6023.4  6039.5
Intraday Support of NIFTY are 5855.9  5813.1  5792.8  5777

Technical View of nifty on 24/07/2013

Nifty

Nifty is in bull region .So today intra resistance are at 6116,6143 and 6159 level and on down side support are at 6039 and 6012.Below 6000 better avoid longs for short term.

Positional Support for NIFTY 5978 5924 5917 5901 5854 5843 5838 5837 
positional Immediate resistance for NIFTY is 6105.
Intraday Resistance of NIFTY are 6111.7 6139.8 6195.3 6211.7
Intraday Support of NIFTY are 6043.9 6015.8 5961.4 5945.4

Nifty Futures
NIFTY FUTURE-CMP(6087.0) is currently in BULL trend . Yesterday the trend was BULL WITH LV In Jul series Nifty future shed 22.42 lakh position in Open Interest and this accounts to -18.89 % of Total Open Interest in Jul series.The Nifty Jul series is trading at 9.2 Rs premium to Underlying . In derivative cumulatively for all series contract Nifty future net added 19.85 lakh position in open interest and this accounts to 8.27 % of Total Open Interest in all series and cumulatively trading in average premium of 41.72 Rs to Underlying. The open interest is also increasing with trend and premium of share is also increasing indicating bull move
In options activity mainly confined to lower puts even though put/call ratio is high At current price strike the activity is tilted to put side and ratio is still strong but addition of call is slightly increasing at 6100 level Yesterday Nifty Put option has added 861.42 lakh position and Nifty call option has added 625.03 lakh position in open interest on cumulative basis Moneyflow wise Nifty Put option has added Rs 18.97 crore in value and Nifty call option has shed Rs -0.61 crore in value on cumulative basis.
Bank Nifty
Positional Immediate support for BANKNIFTY is 10808 
positional Resistance for BANKNIFTY is 11365 11389 11418 11744 11949 11998 12035 12054 12143 .
Intraday Resistance of BANKNIFTY are 11188.7 11273.1 11245.5 11267.5
Intraday Support of BANKNIFTY are 10985.2 10900.8 10929.6 10907.8

Technical Outlook of Nifty for 23/07/2013

Markets ended flat on Monday, amid a volatile trading session, weighed down by profit taking in L&T after the engineering major announced disappointing first quarter earnings. Larsen and Toubro (L&T) tanked 7.46% to Rs 902 after reporting a 12.5% year-on-year (yoy) drop in its net profit at Rs 756 cr for the quarter ended June 30, 2013 (Q1) on account of job mix, lower margin accruals and lower other income. The 30-share Sensex ended up 9 points at 20,159 mark and the 50-share Nifty inched up 3 points at 6,032 levels. 

European markets also red on afternoon,Morning Rupee was stable at 59.4 on morning but afternoon it weakening further and Rupee trades now at 59.72 against the dollar, Market will remain volatile and range bound this week. Market may not sustain above 6100 as earlier i said. We may see 5900-5950 before expiry. FIIs sold 406 crores on cash market, Still FIIs bearish on our market. So be cautious, watch global markets and rupee and trade accordingly ,book the profits on higher levels, dont hold longs. Tomorrow market has immediate support at 6000 and resistance at 6060.

Pivot Point - 6033.42

Intraday supports of Nifty - 6026.38, 6018, 6020, 6002.7, 5973.525, 5942.8

Intraday Resistances of Nifty - 6037.36, 6042.85, 6048.34, 6062.6, 6078, 6093.32, 6122.5 

Nifty Futures and options Analysis:

NIFTY FUTURE-CMP(6043.55) is currently in BULL trend . Yesterday the trend was CONFUSION TREND In Jul series Nifty future shed 11.79 lakh position in Open Interest and this accounts to -8.36 % of Total Open Interest in Jul series.The Nifty Jul series is trading at 11.75 Rs premium to Underlying . In derivative cumulatively for all series contract Nifty future net added 6.94 lakh position in open interest and this accounts to 3.15 % of Total Open Interest in all series and cumulatively trading in average premium of 45.85 Rs to Underlying. The open interest is also increasing with trend and premium of share is also increasing indicating bull move.

In options activity mainly confined to lower puts even though put/call ratio is high At current price strike the activity is tilted to call side but addition of Put is slightly increasing at 6000 level Yesterday Nifty Put option has added 841.61 lakh position and Nifty call option has added 635.59 lakh position in open interest on cumulative basis Moneyflow wise Nifty Put option has added Rs 13.58 crore in value and Nifty call option has shed Rs -3.36 crore in value on cumulative basis

Bank Nifty:

Positional Immediate support for BANKNIFTY is 10808 

positional Resistance for BANKNIFTY is 11365 11389 11418 11744 11949 11998 12035 12054 12143 .

Intraday Resistance of BANKNIFTY are 11188.7  11273.1 11245.5  11267.5

Intraday Support of BANKNIFTY are 10985.2  10900.8 10929.6  10907.8

Bank Nifty Futures and Options Analysis:

BANKNIFTY(11099.55) is currently in SIDEWAYS trend . Yesterday the trend was STRONG BULL In Jul series BANKNIFTY future added 0.39 lakh position in Open Interest and this accounts to 2.11 % of Total Open Interest in Jul series.The BANKNIFTY Jul series is trading at 12.6 Rs premium to Underlying . In derivative cumulatively for all series contract BANKNIFTY future net added 2.87 lakh position in open interest and this accounts to 11.96 % of Total Open Interest in all series and cumulatively trading in average premium of 82.25 Rs to Underlying. The open interest is also increasing with trend 

Nifty Technical View for next week 22/07/2013 to 26/07/2013

Markets ended flat on friday. Still market in bull region that is above 6000. Nifty is forming Rising Wedge pattern, that you can see the chart below.Rising Wedge is a bearish pattern that begins wide at the bottom and contracts as prices move higher and the trading range narrows.So trend reversal may happen above 6100. So investors must be cautious. If we consider 6 month chart for Fibonacci Retracement from High of 6202 to low of 5492, we can observe  Nifty has  retraced 78.6% of the move; precise 78.6% comes at 6050, and so far Nifty made a high of 6066.85 so we were above the 78.6% re tracement. If you consider 3 months chart, it retrace from low of 5573 to 6066.85 i.e 34 points behind to retrace 100%.  RSI is in 58.66 but it gives the indication of weakening by forming a potential Negative Divergence on Daily chart.  Nifty has resistance at 6100, it may go above that level but difficult to sustain . Dont take longs below 6050. Nifty has support at 6000, below 6000 may reach 5950, 5925, 5910 are other supports. Watch global trends and Rupee value, and trade cautiously. 

 Support and Resistances:

Today's Nifty Review and Out look of Nifty for 19/07/2013

Markets ended higher on Thursday, amid a range bound trading session, because of short covering in Infosys and buying interest in HDFC Bank after the private bank posted robust June quarter earnings. Capital Goods shares also supported the upmove.

The 30-share Sensex ended up 128 points at 20,128 mark and the 50-share Nifty ended up 65 points at 6,038 levels. The Sensex and Nifty touched an intra-day high of 20,176 mark and 6,051 levels, respectively.

Japan's Nikkei share average rose 1.3% to a new eight-week high on Thursday as the dollar traded above 100 yen after Federal Reserve Chairman Ben Bernanke said the timing of when the US central bank would begin winding down its stimulus was flexible. The benchmark Nikkei gained 193.46 points to 14,808.50, the highest closing level since May 22. The broader Topix added 0.7% to 1,222.01. All European markets and US Market are green today. 

The rupee led the declines among emerging Asian currencies today after Federal Reserve Chairman Ben Bernanke confirmed market views that the U.S. central bank expects to start tapering monetary stimulus this year.

Currently Rupee trading at 59.70 and crude trading at 106.38. Today FIIs and DIIs are sellers today. FIIs sold 178.29 crore and DIIs sold 239.41 crores. Last 4 days FIIs sold around 800 crores. So both are not bullish ,investors must approach market cautiously.

So trade accordingly with global trend. Tomorrow nifty has support at 6000 and nifty will move up to 6100-6130 tomorrow but it difficult to sustain above that level.

Supports and Resistances of Nifty (19/07/2013)

Nifty Chart

Technical View of Nifty on 18/07/2013

The BSE Sensex ended up 97.50 points or 0.49 percent to close at 19948.73, and the Nifty gained 18.05 points or 0.30 percent to finish at 5973.30 ,amid a volatile trading session, on the back of strong buying interest in FMCG majors Hindustan Unilever and ITC. Today FIIs sold 26.06 crores on cash market and DIIs sold 73.86 crores on cash market. Last three days they sold 610 Crores, no support from FIIs so investors must approach very cautiously and keep eye on federation chairman testimony tonight to get clue of QE 3 future. This will be trigger of opening tomorrow. Still market is in Bull region which is above 5950 but keep eye on global trends and rupee value. Currently Rupee trading at 59.4 versus USD. Tomorrow the first resistance of nifty is 6000. Avoid longs below 5910.

Intraday Resistance of nifty is 5979.08, 5999.81, 6026.33, 6062.86, 6089, 6106

Intraday Support of nifty is 5939.32, 5836.76, 5900.23, 5873.71, 5857, 5842

Technical View of nifty on 17/07/2013

Nifty was on a bear trend ,RBI stopped the bulls move, Nifty has tested 5911 and closed at 5955. Currently USD/INR trading at 59.01, Crude trading above 100 at 105.67. Today 5911 is hope line for bulls. Bulls can move towards 6100 as long as nifty closes above 5911. Any close below 5890 will bring more bears, They can lead to 5800 or 5710. So  the first resistance for nifty is at 5988-93 level. Next resistance ranges are at 6022-27,6050-55,6075-80,6100-05,6124-29,6140-45,6180-85 levels. On downside first support is at 5923-18 level. Next supports are at 5889-85,5834-30,5800-95,5780-75,5741-36,5722-18,5702-98,5670-65,5623-18,5590-85,5569-65,5536-32,5518-14,5497-92,5477-74,5445-41 level.Nifty is in bull region but better long should be taken only above 5993 level.So today intra resistance are at 5993 and 6027 level and on down side support are at 5911 and 5885.Below 5911 better avoid longs.

Positional Support for NIFTY 5903 5893 5877 5857 5839 5832 5829 5790 

positional Immediate resistance for NIFTY is 6050
Intraday Resistance of NIFTY are 6021 6076 6071 6087
Intraday Support of NIFTY are 5889 5834 5840 5824

Technical View of nifty on 15/07/2013

Global markets are lifted nifty on Thursday. Infosys and other IT packs lifted nifty, market reached the target 6000 on Friday, FIIs bought 644.82 crores on cash market, Bernanke’s comments about the need for a more accommodative monetary policy has raised hopes about the continued availability of funds for investment into the emerging economies like India. Currently USD trading at 59.93, Crude trading above 100 at 106.17. Relative Strength Index is giving positive clues on weekly, daily chart, suggesting underlying strength in the Nifty.Now bulls have to see two closes above 6020 and then can move to 6110. On the downside now the weekly pivot 5933 is strong support. Any close below 5890 will bring more bear.

Positional Support for NIFTY 5905 5879 5864 5854 5831 5826 5786 5777 

positional Immediate resistance for NIFTY is 6031

Intraday Resistance of NIFTY are 6055 6093 6125 6142

Intraday Support of NIFTY are 5962 5924 5893 5877

Keys to watch next week:

After Infosys Ltd kicked off the April-June earnings reporting season on a solid footing, investors will now look forward to blue-chip earnings like Reliance Industries Ltd and Tata Consultancy Services Ltd next week.

Bank earnings will also be important with HDFC Bank Ltd due to report results on Wednesday, followed by Kotak Mahindra Bank Ltd and Axis Bank Ltd on Thursday.

In terms of economic data, investors will also be looking at June consumer price inflation data and May industrial output due later in the day and wholesale price-based inflation data for June on Monday.

Global events will also be important, with a slew of economic data through the week from China, while Federal Reserve chairman will appear before the US Congress on July 17-18, and G20 finance ministers and central banks will meet in Moscow on July 19-20.

Technical view on nifty ( 08/07/2013)

Nifty gave star candle pattern on Friday, which has a potential to turn Evening Star, if Monday market gives weaker close. Nifty is still holding above its 200 day moving average. Nifty has already created major gap between 5700 and 5750 which is not filled yet, again on in last trading session (Friday) nifty created one more gap from 5848.20 to 5889, but in an intraday partly gap was filled and now there is gap of only 10 points i.e. from 5848 to 5858. RSI on daily basis is giving initial signs of weakness, and going one degree lower, on hourly time frame we can see Negative Divergence setting in. Nifty has a potential to turn weak from Monday onwards. On the way down, Nifty has many supports coming in to hold the prices, so it is less likely that we get smooth downward rally. trader has to keep watch on 5850 level, than it is the first sign of weakness, and opens the door till 5750, and subsequently how market unfolds. In these market, traders has to play smartly, as current phase will not allow you to churn money quickly. Rupee trading at 61.07 versus US Dollar and crude trading above 100 at 103.49 so now bull hopes on upcoming results and reforms by the UPA government. Still 7750 seems good support. Bears can active only below 5750. Below 5750 bears can lead to 5710 or 5690. So Monday the first resistance for nifty is at 5885-90 level. The trend is slightly in bull side but a move below 5832 is not good. On upside intra resistance are at 5890, 5910 and 5930.

Positional Support for NIFTY 5850 5830 5820 5783 5745 5742 

Positional Resistance for NIFTY is 5914 5936

Intraday Resistance of NIFTY are 5900 5930 5984 6000

Intraday Support of NIFTY are 5835 5804 5750 5740

Technical View for 03/07/2013

Nifty was on a bear trend and closed at 5857 level. Equity benchmarks snapped three-day winning streak on profit booking Tuesday, weighed down by index heavyweights Reliance Industries and HDFC pack.The BSE Sensex fell 113.57 points to close at 19463.82 after rising more than 1000 points in previous three sessions on short covering and gas price hike. The NSE Nifty slipped 41.30 points to finish at 5857.55. European and Asian Markets are also down and rupee also weaken slightly on after noon, American market also opening down. So this is the time to be cautious.In the last session Nifty gave perfect Harami Candlestick pattern, which signifies that preceding trend is getting ready to conclude, although we don’t have long trend to talk about, but in short Nifty gave such candle near 50% Fibonacci Retracement of last sharp fall and as it can be seen here, just above its falling trend line also. Anyways, it is just one candle, and no need to get panic, bulls have sufficient chance to get exit or lighten position, but yes, if today market gives weaker close, then everybody will start talking about retesting of low or optimist bulls will talk about 5700 levels.So the first resistance for nifty is at 5883-87 level. Next resistance ranges are at 5904-08,5930-34,5949-54,5968-72,6005-10,6050-53,6090-95 levels. On downside first support is at 5832-28 level. Next supports are at 5810-06,5785-81,5764-60,5711-06,5666-61,5622-18,5590-85,5569-65,5536-32,5518-14,5497-92,5477-74,5445-41 level.The trend is now slightly in bull side but a move below 5828 is not good for bulls so today intra resistance are at 5887,5908 and 5934 level and on down side if below 5828 be very alert and below 5805 selling may intensify.

Positional Support for NIFTY 5845 5836 5823 5812 5727 5706 and positional Resistance for NIFTY is   5870 5872 5933 5939                                        

Intraday Resistance of NIFTY are 5861.81, 5866.08, 5870.34, 5883.13, 5893.61, 5904.09, 5956.8, 5972.9, 5989

Intraday Support of NIFTY are 5853.29, 5849.03, 5844.76, 5831.98, 5821.50, 5811.01, 5759.1, 5743.3 ,5727.6

Bank Nifty remained range bound in the last session. It seems that Bank Nifty is setting stage to fall. Again, aggressive traders can go short in Bank Nifty below last sessions low of 11590 (prefer to go short below 11575) targeting about 11450. There can be surprise on the long side, but that call can be taken only after Bank Nifty moves above 11750.

Recommendations :

Buy at / above: 5871.39 Targets: 5887.61 - 5906.81 - 5926.03 - 5945.29

Stoploss : 5852.25Sell at / below: 5852.25 Targets: 5836.05 - 5816.96 - 5797.91 - 5778.88Stoploss : 5871.39

Review of Camarilla Equation

History

Discovered in 1989 by Nick Stott - a successful bonds trader - the Camarilla equation quite simply expounds the theory that markets - like most time series - have a tendency to revert to the mean. In other words, when markets have a very wide spread between the high and low of the day before, they tend to reverse and retreat back towards the previous day's close. This suggests that today's intraday support and resistance can be predicted using yesterday's volatility. [This doesn't sound like any sort of unbelievable revelation to me but I put it up here as per some reading I have done into it. There are some mighty claims surrounding its potential.]

THE ALLEGED EQUATION* 

H4 = [1.1*(H-L)/2]+C
H3 = [1.1*(H-L)/4]+C
H2 = [1.1*(H-L)/6]+C
H1 = [1.1*(H-L)/12]+C

L1 = C-[1.1*(H-L)/12]
L2 = C-[1.1*(H-L)/6]
L3 = C-[1.1*(H-L)/4]
L4 = C-[1.1*(H-L)/2]
H* = Previous Day's high
L* = Previous Day's low
C = Previous Day's Close
*ALLEGED BECAUSE I FOUND IT ON THE WEB I DID NOT DEVISE IT
H* & L* ARE SUCH LETTERS ALONE - NO NUMBER FOLLOWING LIKE H4 OR L3 ETCTrading with the Camarilla Equation

The Camarilla Equation involves trading both with and against the trend using simple rules based around price penetration of the L3 and L4 levels at the bottom of the days range, or the H3 and H4 levels at the top of the day's range. It relies on entering and exiting trades with the backing of major support or resistance. The positioning of these levels are determined by the equation. To use the Camarilla Equation, we need yesterday's open, high, low and close. The calculation then gives us 8 levels of intraday support and resistance. There are 4 of these levels above and 4 levels below yesterday's close. See equations above and charts below.

The important levels to note are the L3 and H3 levels, where you may expect a reversal to occur, and the L4 and H4 levels that shows you where a major breakout has been confirmed. How you enter a trade depends on the way the market opens.

HOW TO APPLY THE NUMBERS TO A TRADE

This applies to long or short trades – buying or selling. If the market opens between the L3 and H3 levels – below H3 and above L3 - wait for the price to approach either of these two levels. Whichever it hits first - L3 or H3 - determines your trade.

If the HIGHER – H3 - level is hit; go SHORT - against the trend - with the expectation that the market is about to reverse. Some traders recommend using the higher – H4 - level as your stoploss point, as a penetration up thru the H4 level actually shows that a major breakout may be under way.
A security consideration is to wait for price to bounce back down inside the H3 level before entering the trade. The logic here is that you will actually be trading with the – short-term – trend.
A LONG position is the opposite scenario: If the LOWER – L3 – level is hit; go LONG. In this case you could use the lower – L4 – level as your stoploss. To apply a safer trade here; wait for the price to come back up inside the lower L3 level, before going LONG.

IF the market opens outside the L3 or H3 levels

This scenario involves waiting for the market to move back up through the L3 level or down through the H3 level. In this case, you will be trading with current short term trend. Your stoploss could be the L4 or H4 levels if your account allows it or a lesser level based on current results while following this system. This is something that needs further observation to tweak. Taking profits for this system was not included with this document. I cannot suggest a profit level other than to base it on any other intraday profit level which appears viable based on current data. Using trailing stops after a 30 or 40 pip profit seems a good place to start with more volatile markets.
Research shows that these reversals from L3 and H3 happen as often as 4/5 times – 80% - during intraday trading.

Trading a breakout – L4 or H4 breached

If price rises above – or breaks through - the H4 level – go LONG – BUYIf price drops below – or breaks through – the L4 level – go SHORT – SELLI also found these equations with regards to this equation. I know nothing about them other than what they are – again – allegedly for:HL5 = (hi/lo)*closeHL4 = ( ((hi/lo)+0.83)/1.83 ) *closeHL3 = ( ((hi/lo)+2.66)/3.66 ) *closeLL5 = close - (HL5-close)LL4 = close - (HL4-close)LL3 = close - (HL3-close)This is all I have on this -apparently - elusive system. My thoughts are that the concept is in no way ingenious. The concept is practical and moderately – out-of-the-box. It is clearly similar to pivot points with a different approach as per the calculations. Only testing will tell if it actually works. The camerilla equation calculator is on end of this blog page scroll down.. experiment yourself.. Happy Trading!!