Nifty Technicals & DLF

DLF 

I have recently spotted a wedge formation on the DLF chart for the time being the Stochastics are oversold and the RSI standing @ 41 is now showing a positive divergence. MACD also shall soon converge to generate a buy signal. The stock has also seen volumes increase over the last 5 trading sessions. The stock could definitely now hit 198-200 levels in days to come. 

Buy at / above: 189.06   Targets: 192.41 - 195.9 - 199.41 - 202.96  Stoploss : 185.64

Sell at / below: 185.64   Targets: 182.34 - 178.98 - 175.65 - 172.35 Stoploss : 189.06 

NIFTY 

The Nifty took on a massive rally on Tuesday as we had predicted but our projected high of 4814 has still not been touched. I would remain optimistic about tomorrow although I would start getting bearish or quitely watch what people were doing for a day or 2. The FII's bought 138.97 Crores in cash. The OI in INDEX FUTURES has increased from 406363 contracts (3rd Dec) to 448271 contracts (4th Dec) but they are selling more than they are buying. Ironically Stock Futures OI increased from 980779 to 981231 during which both days they bought more and sold less. 

This leaves me with a feeling that the market may open higher and start to fall apart later hence commencing the larger down move as we had anticipated. Refer to our last blog where we had drawn graph that looked like a possibility of what we may see in days to come. 

Thursday Nifty Trading Call 23/6/2011

TODAY NIFTY SHALL OPERATE IN THE RANGE OF 5300 AND 5240 IN A DOWNTREND   

SELL NIFTY @ 5290-5300 LEVEL TARGET IS 5240-5220.

                  

Resistance 1	Resistance 2	Resistance 3	Resistance 4	Resistance 5
5310.76	5329	5347.26	5365.56	5383.89
Support 1	Support 2	Support 3	Support 4	Support 5
5256.25	5238.14	5220.06	5202.01	5184

Strategies for 17th June

Nifty shall on friday operate in a downward trend.

Sell at 5420 levels SL at 5440 Target 5380-60

Once it hits 5360 levels long positions can be taken for 5440-5460 levels 

NIFTY UPDATE June 16th

On the 31st of May we had discussed the pattern formation of the second wave - the wave so far does look like it was broken into 3 sub waves. On 16th  of June we hit an  intraday low of 5389.8 Combining the symmetrical triangle and trendlines a low of 5365 could be very much possible. We are now looking at the formation of the 6th wave to form the symmetrical triangle pattern.
IMPORTANT 
One should observe very carefully how the market behaves at the 5330-50 levels. Short or Long positions should be taken with strict stop loss. If the market closes under the trendline a move upto 5700 levels may come into question. 


The coming wave or the 3rd wave (3) of the B wave shall be composed of a 5 wave structure. 3 upwaves and 2 down/corrective waves. Overall in our view the 3rd wave shall hit a high of 5690 -5710. and start at the low of 5360-65

While analyzing the Fibonacci retracement levels taking the high of 5944.45 on the 6th of April and low of 5328.7 on the 25th of May we see that the NIFTY retraced back to 5563 or 38.2%  and retraced back down to 5473 or the 23.6% levels. The retracement can be seen upto a level of 5709 or 61.8%

We would advise investors to clear all long positions and watch carefully how the market acts at this level.
RBI today hiked the bank rates by 25bps and analysts assume another rate hike of upto 75 bps within the coming year. We are amidst the Greek and Euro debt crisis, Inflation and America adapting quantitative policies to reduce its 14 trillion dollar debt which makes the global markets less attractive and investors more wary.

HDFCBank & NIFTY UPDATE

HDFC BANK blasted today closing at 2399.55 and touched a high of 2408. Although 2 of our targets of 2350 and 2400 have so far been achieved the target of 2475 still remains which we hope to achieve later during the week.

For tomorrows (June 1st) trading session - 

Based on todays close HDFCBank looks good above 2374. If traded above this level for sometime we could see 2433 and above that 2460-65. However maximum profit should be booked at the first level. A strong support stands at 2340.

As per our projections todays High could be 2455 and Low 2357

Regarding our previous post of Nifty triangulating to 4800 on the 26th of May, we had hit a low of 5328 and closed at 5348. Since then Nifty has gained  212 points in 4 trading sessions and closed at 5560 on the 31st of May. 

However we would like to point out that the corrective B wave consists of 3 sub-waves. We may experience some sort of a correction in the coming trading sessions before hitting 5650-5690 levels. A very strong resistance is seen at 5700 levels where we think the Nifty shall eventually give traders the final exit chance. 5700 is also the 6th point which concurs the symmetrical triangular pattern.

Please be advised if any kind of actions or short positions are assumed work with a strict STOP LOSS. 

Are we Triangulating to 4800 ??

  

On the 25th of May, we discussed the possiblillity of the Nifty coming within a symmetrical triangular pattern. As assumed the Nifty did touch a low of 5328.7 yesterday and rebounded back to close on at 5348.95 

As I write Nifty today has rebounded and has been trading @5398 at 1137 AM. 

The common rule requires 2 major confirmations before the assumption of a symmetrical triangle.

1. The second high should be  lower than the first high with the upper line sloping down.

2. The second low should be higher than the first low and the lower line should slope up.

The pattern generally forms with 6 points before a break out occurs.  

Drawing major trendlines our upper limit before a down trend begins would be 5660-5690 . A short position could be assumed with a stop loss of 5750

With an Elliott Wave Outlook  the rally from 5177  (WAVE C) was described as an ‘X’ wave separating two sets of three-wave down moves. We should now definitely try to hold 5600-5650 as a safe haven and exit positions on every recovery to sell before a move down to 4800