TRADER ALERT !! WARM UP FOR 4500 !

A single zigzag in a bull market is a simple three-wave declining pattern labeled A-B-C and subdividing 5-3-5. The top of wave B is noticeably lower than the start of wave A, as illustrated in Figures 11 and 12.

Occasionally zigzags will occur twice, or at most, three times in succession, particularly when the first zigzag falls short of a normal target. In these cases, each zigzag is separated by an intervening "three" (labeled X), producing what is called a double zigzag (see Figure 13) or triple zigzag. The zigzags are labeled W and Y (and Z, if a triple).
Source http://www.elliottwave.net/educational/basictenets/basics3.htm

Now compare the image above to these - we see that the wave patterns are now in the same formation - we had mentioned before that nifty was likely to get into trouble once it got close to 5200 levels. The 161.8% retracement level falls close to 4520 and after this we would start a whole new wave cycle. Seeing the global scenario we also feel that the next cycle may complete rather quickly or faster than the other cycles. 
We are currently trading at 5140 levels and wave 4 was formed @ 5160 on the 14th of october, the chances of this surpassing 5160 now seems very bleak.

SBIN - Technicals & Intraday - SELL !!

Lets take a look at one of the largest public banks in India which now is downgraded to a SELL SELL SELL
The stock traded a high of 2960 on April 25th and hit rock bottom on May 25th touching 2167.
It makes its way back up retracing 23.6% (Fibo Magic) and hits a double bottom on the 20th of June hitting 2120 this time ! The stock had discarded almost 30% of its value in 2 months.

The stock has now retraced back to its 50% levles ({H 2960 +L 2120}/2 = 2540) and yesterday hit a high of 2528 but lost steam and closed at 2471.
Stochastics and CCI Indicators had generated a SELL signal at 2475 levels on the 8th July but we did not have a candlestick confirmation. The stochastics and CCI indicators have yet again generated a sell signal and now we have a Dark Cloud Cover Candlestick indication that the bubble is now about to bust !

We are definitely taking an intra-day  SHORT on this one @ 2480-90 levels. Lows for the day could hit 2440 if Volumes kick in !

50% Retracement level from Low of 2120 and High of 2528 kicks into effect @2324

Please keep in mind that the FII's may start dumping stocks as the RBI reviews its policy on the 26th of July and most analysts do expect a hike of 25-50 bps.

Happy Trading

Intraday Strategy for June 21st

Nifty today should trade in the range of 5180 - 5300
Traders could select positions accordingly.
1. If Nifty opens near 5200 buy near 5190-5210 levels Target 5280-5300
2. If Nifty opens near 5300-10 levels sell for a target of 5230-40

Resistance 1	Resistance 2	Resistance 3	Resistance 4	Resistance 5
5292.56	5310.76	5329	5347.26	5365.56
Support 1	Support 2	Support 3	Support 4	Support 5
5238.14	5220.06	5202.01	5184	5166.01

NIFTY's Broken Shoulder :(

The closing today formed a complete head and shoulder pattern for Nifty. The Neckline (5350) was broken rather pretty quick. We see the next level of support at 5177 levels and after that nifty has support at 4800 levels.
The Neckline which was a Support shall  now play the role of Resistance.
The head and shoulder pattern does give an initial bounce back towards its neckline, so a short term target of 5340-60 can be expected from lower levels.

Nifty Strategy June 20th - June 24th

Nifty this week may hang around to consolidate between 5330 -5440/50

Calls may be bought at the 5330 levels. keep SL @ 5290

RELIANCE INDUSTRIES - " Make it OR Break it "

Everybody likes cheap stocks which promise to deliver in a short time span. Right now we dont need to look far to find one as one of the biggest companies is available at a 52 WEEK LOW. Reliance Industries has taken a constant beating by the investors and bears on speculations of companies strength to perform and deliver to its investors as one of the largest companies in the world.

The purpose of the chart is to give a brief and real picture about what a company has been doing overtime. The chart in this case gives us the magnitude of how bearish institutions and retailers have been on this security. As seen on the daily price chart - The stock has already broken its previous support of 880, we see that the last level of trend line support can be found in the range of 855-860. If broken, we could see the heavyweight take down the entire index along with itself.
The stock has been in a consolidation phase for the last 2 years moving sideways but losing its grip and value over time. RIL has especially been a target for short term investors who have continuously bought and sold the security keeping 10-15% margin as profits.

Keeping in mind our previous post about the NIFTY LEVELS we do expect the markets to go upto 5700 levels. If what we think and if our theory is right we do expect RELIANCE INDUSTRIES to start moving up from this level along with the index.

     
We have recommended a BUY to our clients @ the 850 levels and in our view the stock should again give its investors a 10-15% margin. We however do recommend that after gaining certain profits investors should watch how the markets react at the 5700 levels and sell stocks just to be on the safe side.

SHORT TERM TARGETS 904 , 929, 970 (5700 LEVELS)

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 

SELL NIFTY

Nifty today will touch 5590-5600
Trading Strategy
SELL 5600 CE @ 92  STOP LOSS 98
MAX LOSS PER LOT 300
Rebuy @5540