NIFTY FIFTY

[vince]

Hi Sanjay,

While volatility is the name of the game , intraday is the way to play. However on a more serious note, the wild swings and volatility we are witnessing are normally associated with top formations and with the market doing what it is I would not like to have unhedged overnight positions.
Bottoms are hammered out amidst low volatility and accumulations, none of which are evident at the moment. So lets enjoy the soccer season.

 

[SGM]

Hi Sanjay,

While volatility is the name of the game , intraday is the way to play. However on a more serious note, the wild swings and volatility we are witnessing are normally associated with top formations and with the market doing what it is I would not like to have unhedged overnight positions.
Bottoms are hammered out amidst low volatility and accumulations, none of which are evident at the moment. So lets enjoy the soccer season.

Hello Vince,

Point taken. So lets buy puts and enjoy the soccer season.

Regards
Sanjay

 

[AMITBE]

This is an important area both in terms of price and time.
Im not referring to Ganns theories or anything like that, but its just the way the charts are panning out.

To recap, last week a couple of important events happened in a near copybook manner:

A 50% Fibonacci retracement happened on the Nifty from the beginning of the rally last April/May. The level accordingly is around 2590, and the Nifty hit a intraday low at 2595, the lowest it has been in this fall.
Then, important levels like 200 DMA, 200 EMA etc were tested on Friday.

Further, besides the 2595 bottom, another important support that has been created is at 2634, the low on Thursday.
This more than anything else is coming up as the crucial area at this point.
If this is broken again, then perhaps 2595 may not hold the fall.

Another short term important level is 2860 area where the late day sell off was arrested on Friday.

In the near term, what one wants to see is a trading dependable trading range.
In other words, a confidence building exercise has to happen to bring back the traders and the volumes.

For a trading range, in the short term, this was written on Friday:

The 200 DMA tryst at 2913-1915 area is all but done, and we are in some tentative levels now.
One cannot say for how long the Nifty would play around here, and how far higher, if at all, the move may test.
For the record, 2991 is the 20 DMA.
2984 is the 20 EMA.
2883 is the 13 EMA.

This morning I had also mentioned 2865-2877 as being important levels.

These are a few important levels to keep in mind at this time, in case a trading range should develop in the very short term.

For now 2898-2886 forms an important support.
To the up a crossover at 2920-2926 could lead to test 2944.

To all these levels, add the lower supports mentioned above, and that for me would form a reasonably decent range to consolidate.
And unless consolidation happens, Im not going to trust any rally.

For now 2925 and 2945 are the levels to hold to the up.
A crossover at 2961 and 2974 would be great.

For supports, briefly the 2840-2845 area is crucial at this point.

 

[AMITBE]

For now 2925 and 2945 are the levels to hold to the up.
A crossover at 2961 and 2974 would be great.

For supports, briefly the 2840-2845 area is crucial at this point.

Keeping above 2872-2875 maintains a positive disposition, and better still above 2884.

However, above 2896-2900 some congestion has been created which extends to 2912-2925-2928.
Should the Nifty begin to tread above 2896 and maintain the move, a rally could be expected.

Supports are crucial at 2857-2853 below which the drop could be quicker.
2841-2833-2825 is an important line to hold.

 

[amitt29]

I think 100 points shaving off on Nifty is not unexpected,maybe today and tomorrow(1st half included)
On another note the consolidation may take place over these 2 sessions.

 

[adilsaleem]

My view of the market is very funny, at this point whether you buy or sell nifty with a specific target of 80 - 100 points you will make money over a period of 1 week.

 

[vince]

My view of the market is very funny, at this point whether you buy or sell nifty with a specific target of 80 - 100 points you will make money over a period of 1 week.

Nothing funny about it as long as it's making you moolah. Right ?

 

[AMITBE]

I think 100 points shaving off on Nifty is not unexpected,maybe today and tomorrow(1st half included)
On another note the consolidation may take place over these 2 sessions.

What's important to note is the amount of supply that got absorbed on Friday.
A hundred points were gone within minutes, but then that supply was quickly absorbed with a late day rally again. Moreover, the drop then was on increased volume.
Again today it has happened, and the supply is getting absorbed. Nifty futures discount has been mostly light too, and on a couple of occasions it was at a slight premium.

So, a rally like this was expected, and taken from the last major low today at 2980, we are about 38 points up. Not too bad, even if the volumes are thin. Perhaps we should get adjusted to thin volumes for some time to come and not attribute a whole lot to it.
This pullback has a good chance to go on for longer.

At 2917 now, the 200 DMA is again being tested.

 

[amitt29]

What's important to note is the amount of supply that got absorbed on Friday.
A hundred points were gone within minutes, but then that supply was quickly absorbed with a late day rally again. Moreover, the drop then was on increased volume.
Again today it has happened, and the supply is getting absorbed. Nifty futures discount has been mostly light too, and on a couple of occasions it was at a slight premium.

So, a rally like this was expected, and taken from the last major low today at 2980, we are about 38 points up. Not too bad, even if the volumes are thin. Perhaps we should get adjusted to thin volumes for some time to come and not attribute a whole lot to it.
This pullback has a good chance to go on for longer.

At 2917 now, the 200 DMA is again being tested.

Perhaps the stage is being set for something again.

 

[AMITBE]

Perhaps the stage is being set for something again.

Like what?
Try to substantiate.
IF you're trying to say there'll be a fall again, no rocket science there.

Clearly there is buying happening and not short coveriung, including Fiiday.

As for midcaps, today was the first broad based rally in quality counters across sectors...and I would not be surprised if the recent lows on many of them don't get retested again. The big fish will protect their positions and will absorbe supply.

I still feel this pullback has more left in it...how much more can't say, but don't be surprised going ahead.