Jul
20Nifty 5400: Tough peak to conquer
Filed Under (Market Observations) by Deepak Singh on 20-07-2010
Nifty has been trading strong and trying hard to cross over 5400. But global setup and local nervousness is preventing the market to quickly cross over. Bears on other hand are hoping for accident and steep fall. Let us see what happens. Nifty keep trying 
Market Observations
- It’s Been A Long Time Since market has really panicked about anything.
- There has been no lack of panicky headline: Dubai Debt, PIIGS, Euro, US economy etc etc BUT still Indian market is trading near 52 week high.
- Today morning, there is sense of bearishness in the air because of disappointing IBM earnings number. IBM’s revenues grew by only 2 per cent in the second quarter of the year, half the growth rate most analysts had been expecting.
- Bears may scream BUT then, what about bullishness that crept in after upbeat Intel and Infosys earnings. The reality seems to be all over the place
- Overnight US market scoreboard:
Dow up 0.56%
S&P 500 up 0.60%
NASDAQ up 0.88%
- Good news: There was no follow through sell off; and market completely ignored bad news coming in form of downgrades from rating agencies.
- Loss of credibility: Market has chosen to ignore - last week’s downgrade of Portugal, or this morning’s downgrade of Ireland. Nobody is now even discussing this.
- As long as CBoE VIX - fear index trades above 200 dma: it pays to be careful.
- NIFTY Month to Date is up 1.3%; and Year to Date is up 3.5%.
- NIFTY: has lost its charm as a trading instrument because of compression in volatility band. Option analysts [Calls and Put writers] will always have an opinion on where Nifty is going next. The reality is its going nowhere.
- DIIs are booking profits whereas FIIs continue to put in money hoping for breakout. Simple observation: FIIs seem to be technically oriented
- It has been more than a year now since Reliance has done anything. The stock has been trading in 200 point band
- If Reliance can trade like this for a year - why cannot Nifty trade like this? Think about it
- Trend Transition - When a stock reverses the trend either up or down by crossing over 200 dma - then it has potential to surprise in the direction of new trend
- Example: Reliance Communication. The way stock has held its ground above 200 dma and 180 - it can surprise on the upside.
- Sectoral mover: Public Sector banks are on move be it Canara Bank, Vijaya Bank or Bank of Maharashtra. All of them have been in the breakout list.
- One sector that has lost trading steam: Autos. Auto stocks do not even appear on top 20 trading list. [Tata Motors only exception]
- IFCI under breakout Watch List: The stock has created a stiff resistance wall around 60 and everytime it rallies to 60, it comes down
- Zandu Realty seems to have broken out from Collapse in Volatility. The stock now needs to sustain above 3200 for strong upmove
- There are three stocks that broke out yesterday. Please subscribe to get access to the list.
- There are three stocks which are making lots of trading noise: i. IRB; ii. PTC; and iii. India Infoline. I have no view on the direction but noise is there
- India Bulls Financial: Bullish setup. The way Indiabulls Financial has performed over last few days makes me optimistic on the stock
- Two sectors where bulls should concentrate: Tea and Sugar
- Markets most of the times are set up so that most traders must lose money. Hmm what is the setup now?I am scratching my head.
- A trader’s first goal must be long-term survival; second goal, a steady growth of capital; and your third goal, making high profits. Unfortunately, many traders come to the market with third point as first goal.
Is risk taking back in a big way - cannot say that.
Source: ChartAlert.com
Source: ChartAlert.com [Reliance weekly chart since June 2009 till date]
Source: Chartalert.com
Source: Chartalert.com
Source: Chartalert.com
Please share your comments on what you think of market observations, market and trading in general
Disclaimer - The state of the market notes is Deepak’s perspective on the market. The column is purely for educational purpose. Nothing contained herein is a solicitation to trade or a recommendation of a specific trade. By reading this publication you agree to make no trade relying in whole or in part on the comments of the writers
If the Govt. gives IFCI its banking license, then it will surely break out.
Mr Deepak, I am a avid reader of your blog. And I appreciate your appropriate analysis of markets.
Since Nifty has not given any directional clue and traded in a narrow range since more than nine months now, i thought of looking towards skies for some clue ( astro analysis)
To my amazement, thru Google Search, it has come to my knowledge that current planetary positions suggests a multi year top is in place and only way markets can go further is down.
This view is not for India in particular, but for general financial markets.
Many astrologers have written about the current (July 2010) special planetary configuration years in advance .
Sir, tomorrow is YES BANK’s results……what do you say abt. it? will the futures touch 305-310? today, towards the end, there was a bit of selling pressure there….(disclosure - i’ve 1 lot at 300.80….what shd. i do if markets open gap down tomorrow?)
@Prem…Share the link where u hav read it…
One of the best points mentioned is
A trader’s first goal must be long-term survival; second goal, a steady growth of capital; and your third goal, making high profits. Unfortunately, many traders come to the market with third point as first goal.
Great and Very well said Sir
There are so many sites . dedicated to mundane astrology, where astrologers have written about Mid 2010 years in advance. Google search Mundane Astrology 2010 and you will find many.