TURNING POINTS FOR 01.02.2011

NIFTY FUTURE 30 MIN / NIFTY FUTURE EOD

NIFTY FUTURE :
In sympathy with the weakness in the World markets, we too opened with a downside gap to make new low at 5438 and recovered without much conviction and lot of volatility, to make the days high at 5545 and closed the day at 5524.

The worrying factors are :

1. Nifty Future unable to go above 5555 mentioned yesterday. Longer it remains below it, the down side remains a serious concern.

2. As mentioned in my weekly post, Infosys too has broken out of the channel and is below 3150 indicating more down side possible and consequently, restricting the possibility of strength returning in Nifty Future.

The hesitation with which market traded today, makes it obvious that there is crisis of confidence amongst the market players due to the possibility of more down side. On the EOD chart, I have drawn a rounding top with a trend line at 5400. This when broken decisively, indicates a target of 4500. Similar to what I have been showing on the Weekly chart for a few weeks now - with possibility of Right Shoulder formation, which can take Nifty Future to about 4400 levels. Needless to say that at today's confidence level, everything seems a possibility.

For tomorrow, I would consider going long only above 5555 with strict stop loss of 5510. On the higher side 5620-5640 and 5675 remain major hurdle.

While I do remain optimistic of a pull back, considering the fragile condition of the market, short position may be considered below 5500 with stop loss of 5555.

Put Call Ratio of Index Options decreased to 0.96 as against 1.10 on the previous trading day.

In such volatile times, it makes sense to trade in options and if you can't resist the temptation of futures trading - please do not forget to use stop loss.

In nut shell - bias remains positive above 5555 and negative below it.

With Best Wishes,

Ketan Asher.

PS: I have updated the Nifty Future Monthly chart as of 31.01.2011, for the readers to see a Strong & Red monthly candle of 772 points, which will be seen by many market players as a sign of impending bearishness.

TURNING POINTS FOR 31.01.2011

NIFTY FUTURE 30 MIN / NIFTY FUTURE EOD

NIFTY FUTURE :

In last three days of the week, Nifty Future fell the entire weeks range of over 300 points and still we feel that it can fall more tomorrow. This is mainly due to the sudden change in environment around us mainly what we hear from the media. In this respect charts help us to be more rational and tell us likely support points. As can be seen on the EOD chart, median line of Andrews Pitchfork has provided good support for some time now - as it did on the Friday. With US markets too getting weak on Friday, it is natural to expect a weak opening for us, but I don't think the sell off can continue, as has happened for the past three days.

Tomorrow being the last day of the month we will get the montly candle which is of higher significance for the chart reading. I have updated the monthly candle elsewhere on the blog and you will find the same is looking bad enough and is close to wiping out all the gains which arose from the break out at 5400 levels about 5 months back. If there is an up move tomorrow, it can leave some lower shadow on the monhly candle for Jan 2011.

In view of the above, tomorrow one can go long above 5555 (stop loss of 5500) with resistance at 5620-5640 and major hurdle at 5675.

In the event it opens weak in sympathy with US markets, it may go to retest the Friday's low of 5485. In this event, one can consider going long at lower levels with a stop loss of 5465.

I do not recommend short positions at lower levels.

The above levels are for trading positions and as mentioned in the weekly post, investment buying is best avoided now. After the monthly candle that forms tomorrow, people may use every rise to sell off.

Put Call Ratio of Index Options increased from 0.96 to 1.10 on the previous trading day.

Please do not trade without STOP LOSS.

With Best Wishes,

Ketan Asher.

TURNING POINTS FOR WEEK ENDED 28012011

NIFTY FUTURE WEEKLY

Pleased to inform you that my article titled "ANDREWS PITCHFORK ON LONG TERM CHARTS" has now been published in The Educated Analyst - an e-magazine published from Australia. Please visit http://www.educatedanalyst.com/.

This week, Nifty Future has closed outside the channel which was formed since May 2009. The weeks' range was 310 points. While yesterday's fall was bad enough, the worrying factor for the next week is - Infosys moving below 3150 where it breaks the channel on the weekly chart, similar to Nifty Future. This can only take Nifty Future further down below 4575 to break the channel on the Monthly chart (updated) as well. Moreover, DOW too seems to have found resistance at 12000 level and has moved below 11860 (level referred to in my article titled "ANDREWS PITCHFORK ON THE LONG TERM CHARTS"). Fall in the world markets can only add to the dampening sentiments here.

With Jan 2011 coming to end on Monday, oscillators on the monthly chart too are getting in to the sell mode.

Positive for the week was that yesterday, Bank Nifty Future has not gone below the previous low of 10384, but as long as it remains below 10731 (52 week Mid point level given in the TP Grid), one can not be certain that it will hold for long.

Considering that oscillators are over sold on the EOD charts, a pull back seems likely and possibly it can happen on Monday as it is the last day of the month. However, the up side is now getting capped at 5620 as the resistance at the channel which was broken on the weekly chart.

In nut shell, as long as we remain below 5555 level, down side seems more likely than the upside. Secondly, we need to break 5620 for considering the possibility of an up move. As we have just moved outside the channel on the weekly chart and ready to break similar channel on the monthly chart, not a great time to look for investment buying. Avoid bottom fishing as market has not indicated how deep below is the bottom. Give some time, let the market settle down and show signs of bottoming out. And better still - let the reaction to the Budget get over by next month this time.

Have a nice weekend & Keep Learning,

Ketan Asher.

TURNING POINTS FOR 28.01.2011

NIFTY FUTURE 30 MIN / NIFTY FUTURE EOD

NIFTY FUTURE:

In today's trading, Nifty Future opened near previous day's close and made today's high of 5715, but thereafter remained weak through out the day and in last hour broke the previous low of 5629 to make a new low of 5597 and closed the FNO settlement day at 5604. Needless to say the close has been very weak i.e. below the previous low and there is all round pessimism.

At this stage I would like to inform the readers, that the above figures are for Jan series and tomorrow we will be dealing with Feb series only and hence we must not miss the perspective of Nifty Future Feb series which had O-H-L-C as 5728-5734-5620-5630. Please note that when we see the Feb series, the close is just above 200 DMA level of 5628. When Nifty Future trades above 5650 level tomorrow, it would have also crossed the trend line shown on 30 min chart and may lead to further bullishness up to 5700. In case 5600 is not broken, one can consider going long above 5650 with stop loss of 5600.

Alternatively if Nifty Future continues the weakness and opens low, we have supports at 5555 and 5510. Based on the oscillators on the EOD chart, I have been optimistic of a bounce. In case of weak opening, 5555 holds good promise for a low from where bounce seems possible. One can consider going long at the first sign of support at this level with stop loss of 5525 - considering the risk involved, one should buy Call option instead of Nifty Future. On the higher side, it will find resistance at 5650 and 5700 levels. It will be advisable not to remain short above 5710, as NIfty Future can take a sharp U turn thereafter. Please do remember that we are just 2 days away from close of Monthly candle and the way the candle is looking today (engulfing previous 3 months candle), even long term investor will get uncomfortable staying invested in equities. This itself may be a good reason for shorterm bullishness.

Put Call Ratio of Index Options decreased to 0.96 as against 1.00 on the previous trading day.

Please do not trade without STOP LOSS.

With Best Wishes,

Ketan Asher.

TURNING POINTS FOR 27.1.2011

NIFTY FUTURE 30 MIN / NIFTY FUTURE EOD

NIFTY FUTURE:

In Tuesday's trading, Nifty Future opened firm and went up to make a high of 5796 and took U turn thereafter and fell sharply. For the readers of this blog, it should have been like a leaked exam paper, as I had anticipated this move, mainly due to the trend line resistance on the EOD chart and I saw a good possibility of such a move due to major announcement coinciding on that day. The day's close has been weak. Tomorrow, holding of the previous low of 5629 is the major factor that will decide the further tone of the market. As I do not know what is in store for us, I will try to enlist both the eventualities.

Option 1: It opens weak and continues to fall and goes below 5629. In that event we have support at 5600 and major support at 5565. I would not be surprised if it bounces from 5565. I would not advise selling at lower levels. Buying may be considered with strict stop loss of 5525.

Option 2: Considering the firmness in US markets, we treat yesterday's fall as an over reaction to the credit policy and get on with the up move (preferably without breaking

Tuesday's low of 5677) to 5850 and 5920. In this scenario, I would suggest buying when Nifty Future moves above 5710 with stop loss of 5675. On the higher side it will find resistance at 5740 and 5800. Expecting the unexpected is the thinking behind considering this possibility. Moreover, I expect Nifty Future to reach at least 5920 in the new settlement before it slips below 5500 for good. This is my expectation of how market will turn out in the next week or so and hence need not be taken as gospel truth (I could be wrong too). We have 4th Feb as a Gann turn date by which time Nifty Future can achieve the level of 5920 (or at best 6000), before seeking new lower levels. Moreover, 200 DMA which was 5616 when we made bottom at 5629 is now at 5627 yesterday and is rising . Having provided support once, the next time this level may be easier to break.

Put Call Ratio of Index Options increased to 1.00 as against 0.86 on the previous trading day.

As tomorrow is FNO settlement day and when market is at such a cross road - volatility is obvious. Hence, irrespective of your own belief/view, please do not trade with out STOP LOSS.

With Best Wishes,

Ketan Asher.

TURNING POINTS FOR 25.01.2011

NIFTY FUTURE 30 MIN / NIFTY FUTURE EOD

NIFTY FUTURE :

In today's trading we had a firm opening of Nifty Future and after inital hesitation and making the day's low of 5696, went up to make the day's high of 5760 and there after retraced most of the gains and finally closed at 5740. The up move was largely influenced by Banking sector, Infosys and ONGC, whereas Reliance remained a drag on Nifty Future.

Interestingly, Nifty Future is poised in such a way that tomorrow, it can move either way, depending on the market participants' response to the much awaited RBI credit policy announcements. While referring to Banking sector, I must add that 11325 remains a major hurdle for Bank Nifty Future and much will depend on the the impact of the RBI policy announcements for crossing this level.

Considering today's close, we can expect Nifty Future to open firm, but I would continue to advise, that long position should be considered only after Nifty Future starts moving above 5760 with a stop loss of 5725. On the higher side, we have resistance at 5800 and 5850, which may end up to be much harder to cross than 5760. One needs to be careful of 5800 level, as Nifty Future can take a sharp U turn form this level - more so with Wednesday being a public holiday and Thursday being an FNO settlement day. As such, with Reliance not participating today, sustained rise in Nifty Future becomes a difficult proposition.

Short positions may be considered only below 5700, with stop loss of 5740. On the down side 5665 and 5630 will provide support and the fall will accelerate below 5600.

Put Call Ratio of Index Options remained almost unchanged at 0.86 as against 0.89 on the previous trading day.

Please do not trade without STOP LOSS.

With Best Wishes,

Ketan Asher.

TURNING POINTS FOR 24.01.2011

NIFTY FUTURE 30 MIN / NIFTY FUTURE EOD

NIFTY FUTURE :

Friday's trading ended up as one more day of going nowhere for Nifty Future. While the positive during the last week was the double bottom at 5629, and the big negative was that Nifty Future is forming a flag pattern (shown on the EOD chart) by consolidating in a narrow range for the past 5 days. The effect of the same is that if it breaks 5629, we have a down side target 200 points below i.e. 5429. This pattern gets cancelled when Nifty Future starts moving above 5755.

For tomorrow, I would advise going long only if Nifty Future starts trading above 5760. On the higher side it will face strong resistance at 5800 and 5850. If this is cleared the next resistance will be 5920.

Short positions may be considered when Nifty Future moves below 5650 with stop loss of 5690. On the down side key level to break is 5600 as that is when Nifty Future will come out of a long channel on the weekly chart. The next support levels are 5565 - 5540 and 5510.

Put Call Ratio of Index Options increased marginally to 0.89 as against 0.82 on the previous trading day.

Get ready for an exciting and a short trading week, which may turn out more volatile than one would like it to be. More profit or more loss - it all depends whether you use the right STOP LOSS.

With Best Wishes,

Ketan Asher.

TURNING POINTS FOR WEEKENDED 21.01.2011

NIFTY FUTURE WEEKLY

After two big range weeks, that too on the down side, the last week gave some respite by being a narrow range week (of 125 points) but only after making a new low at 5629. In any case we ended with lower top/lower bottom one more time. The positive during the week is that we have closed in the green and on the EOD chart we had a double bottom during the week. The overall structure of the chart still does not give any confidence for the up side.

The next week may turn out to be a challenging one with many significant events lined up - that too in a shortened week due to Republic Day Holiday on Wednesday. The significant events are - RBI Credit policy on Monday and FNO settlement scheduled for Thursday and peaking of results announcements by many Corporates.

On the basis of weekly chart, the first sign of strength comes only when Nifty Future crosses 5810. The next resistance comes at 6000 in the form of Trend Line (shown in Brown color). Please note that Nifty Future can start a fresh down side, even after touching this trend line.

Monthly candle as it appears today, does not give much hope for a major up side in the near future unless it closes in the region of 6000. As things stand today, it is preposterous to even consider the same unless RBI policy announcements have to induce so much confidence to change things in just 5 trading days.

As regards the down side, once we go below 5629 we have to factor the possibility of 200 points based on inverted flag pattern on the EOD chart. This may be possible once we move below 5600 as it would break the channel (in yellow shade) which is in formation since May 2009. Key supports on the down side are 5565 and 5510.

Have a nice weekend!

Ketan Asher.

Note: I have uploaded a write up titled "Andrews Pitchfork on the Long Term Charts" which may be of interest to the readers.

ANDREW’S PITCHFORK ON LONG TERM CHARTS

NIFTY FUTURE QUARTERLY / DJIA QUARTERLY (Both updated as on 20.01.2011)

I have found Andrew’s Pitchfork (AP) developed by Mr. Alan Andrews to be one of the best trading tools for the traders.
AP essentially requires three pivot points and two of the pivots must be the high and low (B & C) of a price swing. The mid point between the high & low is calculated The third pivot is the median line starting from pivot point (A) which is immediately before the price swing B & C.
While Alan Andrews made various observations which are helpful to the traders. the important observation he made is, that median line will act as a support and resistance line. I have used this tool on the Nifty Future and Dow Jones Ind. Avg.on a quarterly chart and the observations are as follows:
NIFTY FUTURE:
With AP tool one could have indicated in the beginning of Jan 2011 that if Nifty Future remained below 6240, the up side was capped. You will observe on the attached chart that the previous quarter ended Dec 2010 closed at 6163 and the close was much above the median line level of 6040, indicating strength. However, due to the ascending nature of the median line, the reference point of the median line shifted to 6240 for the next quarter beginning Jan 2011. For the month of Jan 2011 Nifty Future opened on 3.01.2011 at 6202 and on 4th Jan it made a high of 6210. Since then, Nifty Future has been falling and made a low of 5629 on 17th Jan 2011.
A simple tool has indicated the impending hurdle and also provide a good trading opportunity with a small stop loss. In the weekend post on my blog(1.1.2011), I had indicated this as a likely hurdle for Nifty Future. (http://go2turningpoints.blogspot.com/p/quarterly-review-july-to-sept-2010.html)
Dow Jones Ind. Avg.:
The success in Nifty Future prompted me to use the same tool on quarterly chart of DJIA. It is interesting to find on the attached chart, that currently Dow is flirting around the median line at 11860. This being a quarterly chart, even if it manages to cross it for a while, one needs to keep this median line level of 11860 as a reference point during this quarter. Whenever it comes down from this level, there is imminent danger for Dow going down. As such, EOD chart for Dow is already showing negative divergence on the oscillators, which suggests weakness. Will Dow face the median line as a hurdle and come down as it happened with Nifty Future? Only time will tell…..
I hope the readers are convinced of the utility of the simple but very effective tool devised by Alan Andrews. This tool when used on shorter time frames viz. 60 min, EOD or even weekly, in conjunction with oscillators, will give many profitable trading opportunities.
Keep Learning,
Ketan Asher.
21.01.2011

TURNING POINTS FOR 21.01.2011

NIFTY FUTURE 30 MIN / NIFTY FUTURE EOD

NIFTY FUTURE :

In today's trading, Nifty Future opened weak and maintained downward bias for better part of the day and made a low of 5632 (just 3 points above the previous low of 5629) and thereafter made a sharp up move to make the day's high of 5744. However, we have still ended up with lower bottom/lower top for the day - which indicates weakness. The up move could be more of a result of sudden rush to cover shorts, as Nifty Future did not break the previous low of 5629. The brighter side of day's low is, that unless 5629 is broken, we have to consider this as a double bottom and hence sell should now be considered only below 5629. We have had Nifty Future bouncing from 200 DMA twice in this week. Will we be lucky the third time? Read on...

Interestingly, on the EOD chart we now have formation of flag like pattern, which when broken below 5629, indicates a fall of 200 points. The pattern gets cancelled if Nifty Future starts moving above this weeks' high of 5754.

In these circumstances, trying to predict the next day's movement is a bit difficult and trading becomes all the more. The best way in these circumstances is to let the market make the first move and keep our trading levels a bit far so that whipsaws can be avoided - like today.

For tomorrow, I would suggest that long positions should be taken only above 5770 (see the Trend Line hurdle) with stop loss of 5735. On the higher side, it will face major hurdle at 5800, hence in my view - it is best to avoid taking long positions at least for tomorrow unless one wants to trade for these 30 odd points.

In view of the double bottom, it is better to go short below 5625 with a stop loss of 5665. On the down side, we have support at 5545 and 5515. As this levels looks too late, one can even consider going short below 5690 (refer weekly mid point in TP Grid) with stop loss of 5725. Once again on the down side, we have to consider 5629 as a possible support level, unless it is broken. Those with aggressive approach can go short at the first sign of weakness around 5800 level (if it materialises) with stop loss of 5855.

In view of the above contradictions, be prepared for a volatile day - that too last day of the week.

Put Call Ratio of Index Options decreased significantly to 0.82 as against 1.01 yesterday. If you believe that collective wisdom is wrong be prepared for market heading for break of 200 DMA.

Whatever may be your view, please do not forget to put the STOP LOSS.

With Best Wishes,

Ketan Asher.

PS: With US & European markets down, our bias has to be for the down side.

TURNING POINTS FOR 20.01.2011

NIFTY FUTURE 30 MIN / NIFTY FUTURE EOD

NIFTY FUTURE:

In today's trading, Nifty Future opened firm and made effort to cross 5750 twice but then in the second half it came down sharply (60 points in 30 mins). During the day, it made a high of 5754 and low of 5661 and closed the day at 5689.

The sharpness with which Nifty Future came down in just 30 min indicates how weak the markets are. Today's EOD candle is poised in such a way that Nifty Future could go either way tomorrow. With downward momentum persisting, the odds of it going down to test the 200 DMA at 5619 remain open. As such, I was expecting this kind of reaction at 5800 levels when I wrote yesterday to go short at 5800 levels. However, the same has happened even at 5750 levels.

In view of the above, it would be better to create fresh long positions above 5710 with stop loss of 5675. On the higher side, it will find resistance at 5755 and 5800.

Short position may be considered below 5640 with stop loss of 5675. On the down side, it will find support at 5620 -5585 -5540 and 5515.

Put Call Ratio of Index Options remained almost unchanged at 1.01 as against 1.00 yesterday.

Please do not trade without STOP LOSS.

With Best Wishes,

Ketan Asher.

TURNING POINTS FOR 19.01.2011

NIFTY FUTURE 30 MIN / NIFTY FUTURE EOD

NIFTY FUTURE:

In yesterday's trading, Nifty Future opened firm but languished sideways for better part of the day but in the last hour made a decisive move and crossed the Andrew's Pitchfork shown on the 30 min chart and closed firm at 5732. The day's high and low were 5742 and 5672 respectively.

Considering yesterday's firm close and strength in US markets, we can be fairly certain of strong opening. One can consider going long with stop loss of 5680. On higher side, it will face resistance at 5750 and strong hurdle at 5800. Avoid taking long position in case of gap up opening. It is always advisable to go long on pullback.

In view of Nifty Future maintaining upward bias, I would not advise short position. However, those with aggressive approach can consider going short around 5800 with strict stop loss of 5831 and with a view to take quick profit. I must add here, that if we manage to cross 5800 preferably on closing basis, market will appear to be more confident to go up to the next major hurdle at 5950-6000 range.

Put Call Ratio of Index Options decreased marginally to 1.00 as against 1.04 on the previous trading day.

Please do not trade without STOP LOSS.

With Best Wishes,

Ketan Asher.

PS: Please accept my apologies for not being able to write the post last evening due to some personal commitment.

TURNING POINTS FOR 18.01.2011

NIFTY FUTURE 30 MIN / NIFTY FUTURE EOD

NIFTY FUTURE:

After a sustained fall seen over the last week, at least we began the week with a small new low to 5629 and also a failed attempt to cross 5700 level. In today's trading, Nifty Future made a high of 5704 and gave up most of the gains to close the day at 5657. The EOD candle is an inverted hammer (an upside-down hammer (White or Black body), which typically indicates a bottom reversal signal, but requires confirmation on the next trading day. Though the market does remain weak, a bounce from the 200 DMA still remains possibility.

In view of the above, my bias remains positive, and long positions may be taken with a stop loss of 5600 if 200 DMA at 5616 is held or safer still with stop loss of 5560. Alternatively, one can consider going long only above 5680 with stop loss of 5650. On the higher side it will face resistance at 5705 - 5760 - 5800 and 5850.

Considering my optimism for a pull back, and number of supports around 5500-5600 range, I do not advise going short at lower levels. If today's EOD candle is any guidance, and the fact that we do not have to worry about US markets (as they have holiday), we can hope that Nifty Future will muster enought strength to cross the 5700 mark decisively tomorrow, to face the next hurdle at 5800.

Put Call Ratio of Index Options increased to 1.04 as against 0.98 on the previous trading day.

Please do not trade without STOP LOSS, as either side move could be sharp.

With Best Wishes,

Ketan Asher.

TURNING POINTS FOR 17.01.2011

NIFTY FUTURE 30 MIN / NIFTY FUTURE EOD

NIFTY FUTURE :

After a volatile Friday which closed (5654) near the low (5638) of the day/week does not augur well for commencement of the new week tomorrow. If that was not all, the Govt has announced increase of about Rs. 2.50/liter on petrol. May be we start tomorrow with a panic low which could induce buying/short covering.

As stated in the weekly post, considering the divergence on the EOD chart and strong support area around 5500 levels, I expect a bounce may be from 5565 and not 5613 (200 DMA) - considering bearish sentiments due to petrol price hike. If this happens tomorrow after the first 30 min., one can consider going long with 5550 as a stop loss.

Nifty Future going above 5700 will be the 1st sign of likely pullback. Higher up, we will face resistance around 5800 - 5850 - 5925 and 6000.

Even at the risk of going wrong, more so in the light of petrol price hike and hence more number of people turning bearish, I expect a bounce - hence short positions should be avoided or else maintained with a stop loss of 5700. Considering the steep fall (of 600 points) for the past two weeks and multiple support levels around 5500 - 5600 range, I do not expect this range to be broken at the first instance and hence the optimism for a likely bounce.

This could be a good opportunity to buy for a bounce for Nifty Future to at least 6000. Considering the prevailing high volatility, it would be better to trade in options or better still on delivery basis so that the risk of loss is minimized, even if you forget to use the stop loss.

Put Call Ratio of Index Options marginally decreased to 0.98 as against 1.04 on the previous trading day.

Please do not trade without STOP LOSS.

With Best Wishes,

Ketan Asher.

TURNING POINTS FOR WEEKENDED 14.01.2011

NIFTY FUTURE WEEKLY:

What a week it was! The intra day volatility was something never seen in the recent times. The range this week was 287 points - marginally lower than previous weeks' 319 points.
The past two week's fall has engulfed the rise that started in 1st week of Sept '10 - in simpler words, 4 months (16 weeks) rise wiped out in just two weeks. Just blame it on Newton's Law.

With the Friday's fall to 5638, we are now close to the various important support levels - with closest being 5613 which is 200 DMA. Moreover, we have 5567 being the midpoint of the previous swing as well as the trend line connecting two previous tops (both shown on the chart).

Considering divergence on the EOD chart and Stochastic being oversold, I expect one of the above supports to hold for a smart pull back which can take us to test the Trend Line (in brown colour) which comes to around 6000 levels. If this materialises as expected, it could give a good trading opportunity of about 500 points. Nifty Future will show strength above 5850.

Similarly, for Bank Nifty Future (which has taken more beating) it should find support around 10300 and hence a good opportunity to go long with stop loss of 10200. It will show strength above 10750.

Considering the volatility, it is advisable to trade in Options so that the risk gets limited, even if one forgets/ignores to use STOP LOSS.

For those who have not been able to fly kites yesterday due to volatile markets can do so over the weekend and have a good time!

Ketan Asher.

TURNING POINTS FOR 14.01.2011

NIFTY FUTURE 30 MIN / NIFTY FUTURE EOD

NIFTY FUTURE :

Though Nifty Future opened near yesterday's close level with open=Low= 5869 and thereby indicating that day's top was in place. On the back of "Lower than Expected Results" from Infosys, it fell by almost by 5% by the end of the day and coupled with weakness in Bank stocks led the market to make a low at 5736. It remained a volatile day and the only positive feature was that last 2 day's low was not broken. All the same Nifty Future closed weak at 5756 and threat on the down side continues for tomorrow.

In a way predicitng tomorrow's market action becomes simple - If 5700 low is broken, Nifty Future may seek support at 5675 or 5650. Considering that tomorrow is the last trading day of the week, we can once again see a sharp recovery from these levels. In the event, that Nifty Future does not break 5700, one can consider going long above 5815 with stop loss of 5750. On higher side, 5865 - 5900 and 5950 will act as resistance levels.

Though Nifty Future does look weak, as a contrarian trade, it would be a good idea to buy small quantity of 5900 calls available at about Rs. 40/- and then spend the remainder of the day flying kites. It will be rewarding if market recovers to 6000 levels post Makar Sankranti.

Please avoid going short at lower levels and in any case do not forget to put stop loss.

Put Call Ratio of Index Options decreased to 1.04 as against 1.10 yesterday.

With Best Wishes,

Ketan Asher.

TURNING POINTS FOR 13.01.2011

NIFTY FUTURE 30 MIN / NIFTY FUTURE EOD

NIFTY FUTURE:

We started the day with a firm opening which could not sustain and in the first few hours went straight down to test yesterday's low to make a higher bottom at 5712 and remained sideways for an hour or so. As yesterday's low was not breached, in the second session we saw a sharp up move which went past yesterday's top to make the day's high at 5885 and closed firm at 5874. Needless to add that since US markets are firm at the time of writing this post, we can certainly expect to see a firm opening tomorrow.

I am sure everyone would like to believe that the worst is over. Hence, I would like to highlight a few points briefly - even at the risk of sounding like a devil's advocate :

1. The credit for the sharp pull back - that too twice, goes to the strength of the support line which I have been showing on the chart for a few day's now and not necessarily to the strength of the market.

2. Oscillators on the EOD chart do not suggest a fresh up move from here. A fresh move requires a different type of set up which is not reflected as of today.

3. As we have started the year just a few day's back our starting point itself is at 6200, hence strength on the Annual chart will be generated only above that level. For reference, see Jan 2008 chart period.

4. After such a steep fall of 500 points over the past 7 days, a strong up move is normal. A bullish candle on the Weekly chart is a better indicator for a trend change. In any case we are just in the 2nd week of a down move.

5. Those having access to the charts should draw a Neck line connecting low at 5727 and the recent low at 5700. I will deal with it seperately in my weekend post.

While one should play the trend as it emerges, I hope the above reasoning helps the reader from not going overboard on a full throttle.

The top for the day, is just at the trend line on the weekly chart, which normally acts as a resistance. But looking at the close, it is likely that we will cross the same tomorrow. Fresh long position may be taken with stop loss of 5840 and danger exists only below 5800. On higher side, we have resistance at 5900 - 5925 - 5960 and major hurdle at 6000.

As indicated over the past two days, shorts should be avoided at lower levels and I hope the readers have covered the same either at lower levels - because yesterday's low was not breached or at 5812 weekly mid point on TP Grid or at 5850 as given in yesterday's post. Short position should be considered around 6000 levels only and not earlier.

Put Call Ratio of Index Options decreased marginally to 1.10 as against 1.16 yesterday.

Please do not trade without STOP LOSS.

With Best Wishes,

Ketan Asher.

TURNING POINTS FOR 12.01.2011

NIFTY FUTURE 30 MIN / NIFTY FUTURE EOD

NIFTY FUTURE:
The day started with much promise but Nifty Future could not go above 5842. In the second session - due to weakness in Infosys and Reliance, once again it broke yesterday's low and went down to make a low of 5700. In the last 30 min, the recovery from 5700 was very sharp and Nifty Future made a high of 5823. A volatile day that finally closed at 5770. In the absence of any readers appreciating the merits of TP Grid, I once again take the opportunity to draw your attention as to how well it performed today - for both Nifty Future as well as Bank Nifty Future. All you need to do is to recalculate the same, when New intra day High and Low is made. The only reason for blowing TP Grid's trumpet is - a profound hope that more "day traders" can benefit from the same.

Is the worst over?

I don't think so, as we have once again made a new low and the EOD candle is just a doji - indicating indecisiveness. Today was the 6th day for lower top/lower bottom formation. Moreover, 5700 was a logical support for a bounce as indicated on the chart and also mentioned in my post yesterday. The critical thing for Nifty Future is to go above 5850 (also good stop loss for short positions), which looks little difficult tomorrow, considering the close for the day is 5770. Only when Nifty Future stabilises above 5850, I would like to believe that the worst is over - at least for the time being. Looking at the 30 min chart, i would keep the possibility of further down side open and trade accordingly. Interestingly, we are now close to 5605 - 200 DMA, which could provide the next support - possibly tomorrow, if weakness in Infosys and Reliance have to continue. Thereafter, 5500 levels has multiple support areas. As such, Nifty Future needs to make a base for couple of days and a strong bullish candle on the weekly chart, to call for possibility of a turnaround with any degree of confidence. Considering the pain in the market, hopefully we are nearer to the bottom - at least for a good bounce.

At these low levels, I would not advise going short. At the same time buying may be considered - preferably in Call Options at the support levels indicated above or with the help of TP Grid, so that the risk is minimised.

Put Call Ratio of Index Options increased to 1.16 as against 1.06 yesterday.

Please do not trade without STOP LOSS as in these volatile markets - it costs lot of money.

With Best Wishes,

Ketan Asher.

TURNING POINTS FOR 11.01.2011

NIFTY FUTURE 30 MIN / NIFTY FUTURE EOD

NIFTY FUTURE :

After a weak opening this morning, Nifty Future gave an impression that the worst was over, but could not muster the necessary strength to change the onslaught of hammering. Once 5800 was broken it went down to a low of 5746 and closed at 5766. Pathetic close to the first day of the week - that too after a bad close last week. Those not in the habit of protecting their long position can only blame themselves and at best to Newton.

If last 5 day's hammering looks bad enough, I wonder what will happen if & when we have to see life for Nifty Future below 5500. We are down 7.50% in just 5 days of persistent fall. Even 6200 level looks so far today.

What Next?

Today the stocks fell as if it was the last day. I am sure this can not continue daily as we are now in the 5700 region where Nifty Future has bounced off on the previous two occasions and there could be a short covering rush - hopefully tomorrow. Hence, going short, even though market looks weak, is best avoided at least tomorrow and at lower levels. As shown on the EOD chart, there is a Trend Line support as well as Median Line of the Andrew's Pitchfork near 5685 level. One can consider going long around 5700 levels with a strict stop loss of 5650. If you can avoid bottom fishing, that is the best.

On the way up, Nifty Future will face resistance at 5835 - 5865 and 5925.

Put Call Ratio of Index Options increased to 1.06 as against 0.98 on the previous trading day.

Please do not trade without STOP LOSS. (remember: Money saved is money earned)

With Best Wishes,

Ketan Asher.

TURNING POINTS FOR 10.01.2010

NIFTY FUTURE 30 MIN / NIFTY FUTURE EOD

NIFTY FUTURE :

The effect of negative divergence indicating weakness on the weakly chart was felt on Friday's trading. In the opening session, it was not able to cross the level of 6081 to come out of the wedge like formation for a sharp up move. Instead, Nifty Future remained weak right from the opening session and precipitated in to a fall after the mid session - helped mainly by Bharati, Infosys etc resulting to a 3% fall by the end of the day. During the week, Nifty Future saw a fall of 5% and took away the gains of previous two weeks. The week closed at 5914.

Considering that Nifty Future has closed outside the Andrew's Pitchfork and 6030 will now provide strong resistance on the up side, it will be better to make new buying only at lower levels. The next support levels are 5850 - 5800. While there is an area of support at 5740, but the weakness will accelerate below 5800 on the break of trend line.

It is best to be on the side lines till market stabilises and forms a bottom. However, those who are willing to take higher risk can consider going long on Nifty Future around 5850 with stop loss of 5800. On the higher side, it will find resistance at 5940 and 6030 will provide strong resistance as mentioned earlier. Fresh short position may be considered at 6030 with a stop loss of 6055.

Put Call Ratio of Index Options decreased to 0.98 as against 1.09 on the previous trading day.

Please do not trade without STOP LOSS.

With Best Wishes,

Ketan Asher.

TURNING POINTS FOR WEEKENDED 07.01.2011

NIFTY FUTURE WEEKLY

The last week's trading ended on a very weak note, after Nifty Future falling for all the five day's of the week. In doing so, it has formed a lower top on the weekly chart - but yet to make a lower bottom). As can be seen on the attached chart, Nifty Future has taken support on the Trend Line (in Brown colour) and also closed just on the trend line - near the low of the week, suggesting extreme weakness. During the weak, Nifty Future saw a range of 319 (Hi of 6210 & Lo of 5891) and closed at 5914.

In view of the support taken on the Trend Line, fresh weakness will emerge once Nifty Future trades below Friday's Low of 5891. On the down side, it will find support at 5850 and 5780. With the last week's fall we are now approaching the lower end of the current range of 5700-6200 and hence caution is advised for short positions as Nifty Future could take support at 5780. However if the previous low of 5727 is broken, we should be ready to see the 5500 levels quickly. It is only when Nifty Future moves below 5500 level, we should get ready to see the 4400 being the target for the right shoulder shown in the weekly chart for sometime now. If the projection of 21 weeks given on the chart is to be correct, we have already completed 10 weeks and have 11 weeks more to go. While this looks unlikely today - just as 5700 looked unlikely on Muhurat trading day when Nifty Future did a high of 6349. One thing is for sure that with the way events are shaping up since than - Inflation, Scams, Increase in Interest Rate, Increase in Oil price etc. more people are now looking at down side possibility. May be .... it is the announcement of weak results by frontline stocksn which may pull the trigger for the market to trade below 5500.

While there is no need to be extremely pessimistic right away, but one must be ready to face the reality when it actually emerges and keep their trading positions in sync with these eventualities (Easy way to do is to keep strict stop loss levels). I am sure those referring to the TP Grid or Quarterly Grid will get some unbiased guidance from these numbers.

Have a nice weekend!

Ketan Asher.

TURNING POINTS FOR 07.01.2011

NIFTY FUTURE 30 MIN / NIFTY FUTURE EOD

NIFTY FUTURE:

In today's trading, Nifty Future maintained downward bias though out the day. It made a high of 6134 / low of 6047 and closed at 6072. We had a third day of lower top and lower bottom. Nifty Future took support at 6047 as shown on the EOD chart attached. Once again it was Reliance and Infosys that saved the market from a bigger fall. Bank Nifty too continued to fall sharply for the third day.

As shown on the 30 min chart, Nifty Future has taken support at 6046 for multiple reasons like trend line support and 0.38 level. Moreover, there is a wedge like formation from where we can expect a breakout if Nifty Future starts trading above 6081 tomorrow. While it may be a little premature to call the final bottom today, being last day of the week, we can expect a higher close tomorrow. With Reliance showing strength, and US markets still making new 52 week high, I expect today's low to hold - at least for tomorrow. In view of the same, it is advisable to avoid fresh short positions tomorrow.

One can consider going long above 6081 with stop loss of 6045 (or 6030 to be on the safe side). On the higher side, it will find resistance at 6125 and 6150 levels.

Put Call Ratio of Index Options decreased marginally to 1.09 as against 1.11 yesterday.

Please do not trade without STOP LOSS.

With Best Wishes,

Ketan Asher.