TURNING POINTS FOR 02.10.2010

Will post the turningpoints for 02.10.2010 by 8 a.m. tomorrow morning.
Inconvenience regretted.
Ketan Asher.

TURNING POINTS FOR 01.11.2010

NIFTY FUTURE 30 MIN / NIFTY FUTURE EOD

NIFTY FUTURE:
HISTORY CHECK: OUT OF 10 : 8 times positive close and 2 times negative close for Nov.

As indicated in the weekly post yesterday, it is the Oct monthly candle which is a cause for concern.

In Friday's trading, Nifty Future maintained a negative bias and made a new low of 5966 and in last hour made a sharp recovery to the day's high of 6066 and closed at 6044. The reason for the recovery could be strong support indicated at 5950 and also that day being a weekly/monthly close.

With Reliance results declared after the market hours on Friday, we will see the effect first thing tomorrow and that should set the tone for market direction. Long positions should be taken only above 6075 with stop loss of 6045. On higher side, it will face resistance at 6100 and strong resistance at 6145. While above 6145 it may show strength, and hence it is better not to remain short. However, I would like to caution the readers, that even after reaching 6225 it may fall short of going to the previous top of 6336. Only a close above 6225 we can expect to see Nifty Future making a new top.

As Nifty Future has shown a sharp pull back from the area of support near 5950, it would be better to avoid short trades at lower levels - at least for tomorrow.

Next week is made of Diwali festivities and President Obama's visit - both events being times to celebrate and feel good, and hence market too may end up directionless.

Put Call Ratio of Index Options decreased marginally to 0.97 as against 1.01 on the previous trading day.

Please do not trade without STOP LOSS.

With Best Wishes,

Ketan Asher.

Words of Wisdom

A formula for success in life and finance:

never hold an investment that you would not be willing to purchase afresh today.

TURNING POINTS FOR WEEKENDED 29.10.2010

NIFTY FUTURE WEEKLY

NIFTY FUTURE:

Finally the week and the month both have ended on a weak note. As such, monthly candle is a 'Gravestone Doji' with a long upper shadow - indicating bearishness ahead. On the weekly chart (attached) this weeks' bar is an outside bar suggesting - weakness below this week's low (5966) and strength above this week's high (6180).

At this stage, I would like to remind the readers that we have a top of 6318 in place in 144th week from the all time high of 6336 in Jan 2008 and since then I have been suggesting caution - as 144 is an important Gann no. This gets further confirmed by lower bottoms on the weekly chart. Moreover, I have shown a down sloping line starting from 6318 and the weekly top of 6180 is exactly on this line. Going by the same logic, we need to cross 6145 level to change this view, however one more hurdle of 6190 (0.618 level) would remain to be crossed.

On the down side 5700-5750 can provide a strong support.

In case you share the above view, please keep a tight stop loss on long position, as normally markets find a reason to fall after the technicals have indicated the weakness and I guess that is the whole purpose of looking at markets technically.

I have retained the 'likely formation' of the Right Shoulder of a big Inverse H & S (in Lime Green color), so that readers can get a big picture of how deep the correction could be. While I do not know what reasons will evolve over time to complete this pattern, but I do expect INDIA (or at least the Stock Markets) to shine brighter, once this pattern is completed after some pain.

Get ready to celebrate Diwali next week!

With Best Wishes,

Ketan Asher.

Words of Wisdom

Happiness is the profit we harvest from life.

All life's activities should be periodically reviewed for their return on investment.