TURNING POINTS FFOR 08.08.2011

NIFTY FUTURE 30 MIN / NIFTY FUTURE EOD
NIFTY FUTURE :
On Friday, Nifty Future opened with a downside gap and went down to make the low of 5115 and bounced back sharply to close the day at 5211.
This is old news, in the light of down grading of US credit rating after the close of US makrets on Friday. It is common knowledge that we will be facing the aftermath of this rating tomorrow and am sure it will be chaotic, to say the least. How this credit rating will affect the World markets itself is a subject of debate and is being dealt with by experts on various channels. Before we start trading, we will get some guidance from Asian markets as well as SGX Nifty.
For tomorrow, one can consider going short below 5165 with stop loss of 5215. On the down side, it will find support at 5000, 4920 and finally at 4770 which is a previous support as well as .382 level as shown on the Weekly chart.
Will we do too bad tomorrow? I wish I had the answer.
Tomorrow's market will be largely driven by the fear factor amongst the traders as well as the intensity of FII selling. Hence, any attempt to guess the levels is a futile excersie. It will be better to stay aside for a day or two, till the things are clearer and we also know how the US market reacts tomorrow.
Those holding puts will do well to sell them and book profits at every level indicated above. After all, just like fear, greed too is a traders biggest weakness. Before tomorrow's opening session please avoid watching various channels and read too many opinions - as they may not help you much but only cloud your own judgement. Better to let the market open and face the situation as it evolves.
It is best to avoid bottom fishing - unless you know the bottom. Please do not trade without STOP LOSS.
With Best Wishes,
Ketan Asher.

TURNING POINTS FOR WEEKENDED 05.08.2011

NIFTY FUTURE WEEKLY

The week saw Nifty Future make a range of 442 points (High of 5557 & Low of 5115), probably the biggest range in past many weeks. This week Nifty Future also saw a break down from the trend line and closed decisively below it at 5211.

While many reasons are emerging for further downside, the leading one being - downgrade of US credit rating by one notch from AAA by S&P. To the best of my knowledge, the downgrade was announced after the US markets closed and hence the effect of the same is not reflected in their closing prices.

The well known author Nassim Taleb may have considered this as one of "The Black Swan" events. Just as many of us may not have even known that US had a credit rating of AAA, very few would know the implications of the same. This can only lead to chaos in the markets, particularly ours which has to not only deal with our own local problems but also have to face the onslaught of FII selling.

All this can take Nifty Future down to 4770 (38.2%) and thereafter to 4300(50%) over time. As shown on the attached chart, last weeks' triangle breakout has a target of 4250. Hence at this stage, I would put my bets on expecting Nifty Future making 4300 in the coming weeks.

Those who had the wisdom to buy 5000 Puts have a very good chance to thrive in the chaso that is likely next week. The levels given above are only indicative at this stage and unlikely to be reached next week itself, hence profti booking in 5000 Puts at every decline, will be a prudent thing to do.

Have a nice weekend & Keep Learning!

Ketan Asher.

TURNING POINTS FOR 05.08.2011

NIFTY FUTURE 30 MIN / NIFTY FUTURE EOD
NIFTY FUTURE:
As the time is short I have changed today's format of this post.
1. It seems that the effect of the 24th month discussed by me as hypothesis for the past few weeeks has actually set in. For those who are acedemically inclined, the fall last time was 937 and this time till yesterday it was 232. Do I need to say more?
2. As gap down open is a foregone conclusion, we may expect some meaningful support around 5165.
3. Real problem starts below 5165 as we enter a new trading range after 24 weeks. Considering the Friday effect we should be content with low of about 5165 today.
4. As I have been mentioning in my post - please avoid bottom fishing unless you know the bottom. I don't know yet and cerrtainly not below 5165. It could be 4900 - 4400 or what about the gaps left on the weekly chart when we saw gap up opening affter the last election results.
5. Two things are certain to happen today. More readers will start looking at simple Gann Ideas more seriously and those who had the courage and conviction of buying 5000 Put last week will feeling happy. Please keep booking profit partially and keep some for next week. After all profit is the sole purpose of this exercise.
May GOD bless us all!
Ketan Asher.