NIFTY FIFTY --- LAST WEEK EVENT'S WILL THEY SPOIL THE PARTY OR GIVING OPPORTUNITY TO BUY FOR LONG TERM INVESTORS ?

After making low on 20/12/11 at approximate level of 4530 NIFTY started its uptrend. Last week there are lots of event like inflation data, RBI policy and union budget. Since there are no any positive surprises last week short term trend turned weak. So now the question is will this rally sustain?

As mentioned elsewhere on this blog Indian capital market is in uptrend as suggested by technicals.

NIFTY - DAILY CHART

As shown in the chart NIFTY after breaking trend line 1, taken support at 200 sma ( which is shown by brown line ) and after retesting the trend line 1 it started falling once again. 50 day sma ( green) is above 200 day sma (brown), so it is suggesting up trend, and current fall is correction in ongoing uptrend. If and only if NIFTY gives daily close below 5170, then and then only there is possibility of more down side.
Next week possibility of NIFTY taking support at one of following supports --
1) 34 day  ema approximate level 5300
2)  50 day sma approximate level 5230
3) 200 day sma approximate level 5165
4) trend line 2 approximate level 5275

there are other supports also, so in short there is cluster of multiple supports in the range 5100 to 5300, so its buy during dips.

NOTE: LONG TERM TREND OF INDIAN MARKET IS UP, UNLESS IT GIVES WEEKLY CLOSE BELOW 4530. ( this level will change according to future price action) . SO AS OF NOW OUR MARKET IS BUY ON DIPS FOR LONG TERM INVESTORS.

OUR TECHNICAL ANALYSIS SUGGEST THAT THE ONGOING SHORT TERM CORRECTION WILL END BY NEXT WEEK AND IT WILL RESUME IT'S UP TREND FROM 26 MARCH.

As of now data given on nse web site suggest that FII's are buying, while DII's are selling, but be careful if FII also start selling this whole party may get spoiled.

DISCLAIMER: This Blog is meant for sharing my trading ideas only and no calls to be taken as trading recommendation. Visitors please do your own research or consult your advisers for safe trading.

FOLLOW UP 5 - WILL IT REPEAT THE SHOW ONCE AGAIN ?

On 5'th march in this link http://kolhapuritrader.blogspot.in/2012/03/follow-up-nifty-in-triangle.html it has been mentioned that- "So now it looks like that, it will target 5100, at least 5200 this week." and once again as per expectation last week it made low of 5171.45.
          As we are mentioning repeatedly on this blog Indian market is entering new bull market. We first posted regarding this possibility on 24 Jan 2012 ( see link - http://kolhapuritrader.blogspot.in/2012/01/drama-will-it-repeat-show-once-again.html ). Now one by one it is giving new clues and confirming that it is  bull market.

According to technical analysis BULLS ( UPTREND) lives above 200 SMA ( or 200 EMA) and BEARS (DOWNTREND) lives below  200 SMA ( or 200 EMA). Now last week even though short term trend is down after correction NIFTY taken support around 200 SMA and EMA ( see chart)



         On 24 Feb we mentioned regarding possibility of GOLDEN CROSS  in this post ( link - http://kolhapuritrader.blogspot.in/2012/02/follow-up-4-will-it-repeat-show-once.html ) which has been all ready happened.

        In technical analysis some traders/ investors look for exponential moving averages (E.M.A.), while some look for simple moving averages (S.M.A.)
        Now see the chart below and what happened yesterday -----

 You can see that  50 SMA crossed above  200 SMA yesterday that means one more GOLDEN CROSS happened yesterday. Thus one more clue got confirmed that we are in BULL MARKET. 

SHORT TERM VIEW -- Now if yesterdays low (5327.55) is not broken  then NIFTY will target 5500 in this week ( on 14'th march inflation data will be out, on 15'th R.B.I. policy and on 16'th  UNION BUDGET will be there so possibility of lot of volatility during this week so short term traders should follow there stop losses strictly).

LONG TERM VIEW --- As we have mentioned on 24'th Jan (http://kolhapuritrader.blogspot.in/2012/01/drama-will-it-repeat-show-once-again.html )  our market has entered new bull market and even though state election results not boosted market sentiments hold your investments, and if your risk profile and capital allows buy on every dips ( corrections) and hold on till long term trend is up.
Eventually looks like NIFTY will target 5500, 5700, 6000 and may even make new life time high till MARCH 2013.

DISCLAIMER: This Blog is meant for sharing my trading ideas only and no calls to be taken as trading recommendation. Visitors please do your own research or consult your advisers for safe trading.

FOLLOW UP - will it repeat the show once again ?

In last post (http://kolhapuritrader.blogspot.com/2012/01/drama-will-it-repeat-show-once-again.html) it has been mentioned that , if nifty gives weekly close above 5100 then there is 80% possibility that Indian stock market will enter new bull market. As of now FUNDAMENTALLY it looks difficult, but TECHNICALLY looks it is possible.
Once again technically nifty is at very crucial level, on one side it had given weekly close above 5100, while on other side it formed HANGING MAN CANDLESTICK PATTERN near 200SMA, as shown in chart below.

This hanging man pattern signifies short term weakness or reversal of uptrend.As with any candlestick pattern this requires confirmation. This confirmation may be in the form of gap down opening next day (Monday), or bearish real body on Monday

One more bullish signal we missed in last post was--- yearly pivot for nifty comes around 5112, and it has given weekly close above this level.

In short the tussle going between bulls and bears is not resolved yet, there are bearish as well as bullish indication.
Because of the 42:21:42:21 week pattern  mentioned in last post, we feel unless and untill it gives weekly close below  4530 it will remain in up trend with intermittent corrections.

DISCLAIMER: This Blog is meant for sharing my trading ideas only and no calls to be taken as trading recommendation. Visitors please do your own research or consult your advisers for safe trading.

IS THIS BEGINING OF NEW BULL MARKET ?

1)Due to the positive global cues nifty posted weekly gain of  6.15%, & most important thing is that it closed above the resistance line at 5170-5200, which is previously acting as support line. Thus after breaking down the descending triangle on 12/8/11 (weekly closing basis), nifty is back in the triangle.

CHART 1 : NIFTY BACK IN TRIANGLE

So the descending triangle break out which is discussed here http://kolhapuritrader.blogspot.com/2011/08/follow-up-nifty-in-triangle-and.html may turn out to be false breakdown.

2) It has been said that bull market is alive above 200 SMA, while bear market is alive below 200 SMA. Now just look the 2 interesting charts.

CHART 2 : 200 SMA WEEKLY CHART

CHART 3 : 200 SMA DAILY CHART

It is seen that nifty is above the 200 sma in weekly chart ( for 1 week i.e. week ending on 26/8/11 it closed below 200 sma but from next week it closed above 200 sma ), that means it is bull market ( uptrend) in weekly time frame. However nifty is below the 200 sma in daily chart, that means it is in bear market (down trend ) in daily time frame. THIS MUST BE THE TECHNICAL REASON WHY NIFTY TRADED WITHIN THE RANGE ( 4700 -5200) FOR 11 WEEKS, WHATEVER MAY BE LOCAL / GLOBAL FUNDAMENTAL REASONS.

3) NIFTY made double bottom as shown in the chart below, and broken the resistance line. DOUBLE BOTTOM is bullish pattern.

CHART 4 : DOUBLE BOTTOM

4) As seen in chart 5 nifty broken the 500 point range within which it is trading for 11 weeks, so now it should target 5200 + 500 = 5700.

CHART 5 : NIFTY OUT OF RANGE

5) SO INFERENCE IS THIS MAY BE BEGINNING OF NEW BULL MARKET. FOR THIS UPTREND TO CONTINUE FOLLOWING ARE PREREQUISITES : -
       A) It should start trading above 200 sma on daily chart.
       B) It should start trading above the resistance line of descending triangle which is shown in chart 1.
       C) The previous resistance at 5170-5200 should now act as support for any dip.
       D) AND LAST BUT MOST IMPORTANT THAT IN ANY DIP IT SHOULD HOLD ( SHOULD   NOT BREAK) 4700 LEVEL.
       IF IT BREAKS BELOW 4700 THIS WHOLE VIEW WILL GET NEGATED AND THERE WILL BE SEVERE FALL.

DISCLAIMER: This Blog is meant for sharing my trading ideas only and no calls to be taken as trading recommendation. Visitors please do your own research or consult your advisers for safe trading.