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Detailed Nifty Analysis 11 Jul 10
Flashback, First. On 6/6/10, we sent a file to over people via different networks and lists. The file can be still downloaded at
In the last presentation… We advised at 5100 that support 5020 and a bounce thereafter. We were quite bullish for 5300, 5450 otherwise, but this support did not work and Nifty pulled back but after correcting further to This was an unusual movement by Nifty, and there are only few occurrences of the same in history. However, still majority of our followers and clients benefited as we updated the micro picture via Orkut, Facebook, Twitter, SMS, RSS, every now and then. By forming a major view via PPT, we are able to update only via networks, and that we did! Hope all of you are getting the updates timely. Thanks to advanced social networking.
Nifty Long Term Chart Nifty Long Term Chart: As it looks clear from the chart, the long term bullishness of Indian markets is still very much intact. The earlier supports are now resistances. Stiff resistances. See the effect of it As and when R1 broke Nifty went to R2. Meaning 6000 again?? Conclusion from the long term chart basic analysis: 1) The long term bullishness is still intact. 2) The R is now broken, though insignificantly, leading way towards R3. 3) The R3 stands at 6000+
Nifty is making slowly but steadily, HIGHER BOTTOMS C&H pattern Nifty is slowing down, but on the other hand making higher bottoms everytime. The difference between 2 successive bottoms is decreasing though. A C&H pattern is visible on the Nifty. This gives us an indication that this time the 9 month range might break. On the other side, the supports are 5300, 5220, Below this there seems to be little support. Then the concept of range of might support. There is a strong resistance at 5500.
A lot of panic amongst retail traders happened on basis of China, US, and Europe instabilities… Our Indian traders are unable to get correct and complete picture of these markets and nor do they know their price movements well. They become soft target of brokers and operators, believe the rumors, and get PANICK!
DOW JONES has a res and upside tgt of10700 and It had a major correction after decades. The current upmove might be a wave2 of the pullback. But can correct to 9300 if recent lows break. Overall, looks bullish for a wave2 (if US has to move up at all) but may correct to 9300 before a major rally.
Shanghai SSE corrected majorly after a vertical rise of years. After this heavy correction, it has pulled back smartly and has now been consolidating with –ve bias. Above 2650, tgt Below 2350, tgt 1500.
FTSE rallied from 1500 to 7000 from 1987 to 2000 and has been rangebound since then, for almost a decade. It moves 50% down, then 100% up. Currently in the middle, it is showing unusual signs of higher volatility. If 4900 holds, tgt Else can correct to 4500.
Summing it up Once Ketan Parekh was asked by a fan of his – Sir where will Nifty go? He smiled and replied – It will move up and down! It seems this answer of yesteryears is now working perfectly in current scenario… Nifty moved only 50 points in last 9 months, and has been unusually rangebound. While Chinese markets seem bullish, DOW and FTSE dont look moving decisively as of now. There can be extension to the current rally or a dip then a rally. But in any ways, lack of confidence in world equity markets without a major fundamental worry is POSITIVE for India, as India then looks as a favorite hot money destination for investments (read trading longs). However, if world markets get terribly down they become very undervalued and will start attracting money and that is not a good news for India. Then India will face issues like global crisis that will make it easy to transfer money from India to other places.
Summing it up A hard truth is that be it FII or aam aadmi, everybody is more of a trader than an investor. People are now getting crazy about stocks and they read last 1 year performance reports of fund houses and make their own logics like If 100% return in 1 year, atleast it should be 20% this year… and they start investing. Greed is a bigger logic than any other logic. Same is with the global scenario… If other markets start looking bullish, they will syphone a lot of funds from India. So, in short: Trendlessness and rangebound movement in other markets is a positive factor for India. Markets move a phase ahead of reality. There was an IT boom in stock markets before an actual IT boom could happen. The wall street parties before the main street. Markets tanked before US recession actually happened… Markets went up much before actual US economy surged. Same happened with decoupling theory. It was debated over a long time and finally it has happened. There was a time when world used to awake with DOW
Summing it up Now world starts its morning with Asia. What Asian markets do in the day, the Dow does the same in the night (US Morning). It would be exaggeration to say that US effect is 0, but it has certainly reduced, atleast from the recent past stock market reactions. Inflation is a cause of worry right now, but when markets are bullish, even rate hikes dont stop the bulls from buying. These things become an explanation of crash only when the markets are bearish and are moving down. Indian markets are rangebound from 9 months now, and they cant be said bullish or bearish until and unless they breakout or breakdown. Till then they are rangebound. Technically, there is a cup & handle formation which shall activate above 5380, for a target of 5500 and On the other side, 5300, 5220, 4970 are the supports.
Summarizing Summarizing, resistances Supports: After a long time, there has been a bullish formation near the range top. The colour is green. Conditions Applied.
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See how precisely we advised, and we even sketched the forward chart… And see the future movements indicated by grey and red. You can read the complete report at the Nifty View page.
The actual chart… It is an old chart. Now Nifty is around 4600+