Presentation on theme: "Detailed Nifty Analysis 25 Nov 09. Flashback, First. On 11/11/09, we sent a file to over 10000 people via different networks and lists. The file can be."— Presentation transcript:
Flashback, First. On 11/11/09, we sent a file to over 10000 people via different networks and lists. The file can be still downloaded at www.activetrades.in/downloads/Nifty11119.zip www.activetrades.in/downloads/Nifty11119.zip
In the last presentation… We advised that resistance 4950, there could be a rise to 5030. We also told in a live update to all our readers (non-paid clients) that 5085 is a double top hence a very high resistance and that 5045 a support, below that tgt 4950, 4750.0 Hope you saw that, THEN!
After hitting the targets Target Advised: 4950 Low below 4950. EXXXXXXXXXXACT. We gave a live update to all that “we have covered our shorts” (at 4950)
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 R2 4400 is now broken, though insignificantly, leading way towards R3. 3) The R3 stands at 6000+
Dow Jones, The most underperforming index for valid reasons, Rallied full 351 points from 9876 level and still now it is around 10000 mark. Anybody longed may keep price as stop. Target 11000. Watchout!
Crude Oil Charts Indicate that there should be a continued rally towards 94$pbbl and any correction would lead in extended rallies only.
Revisiting the past We are referring to DOW, when the subprime crisis was almost announced and DOW fell from 14000+ to 11000 and I remember one day the FUT was down 550 points, and FED cut interest rates unexpectedly before market opening, and it closed in green. And I also remember that DOW bounced to 13200, before correcting down to 8000 mark. What can we make out? After any big fundamental crisis has been announced, markets may pullback, that might look as if the correction is over, and time to rally. But it’s just a pullback, not bullback. The same “might” be happening here in India too. I remember even TV Saas bahu soaps were widely using the term “recession” and there were even Tshirt designs on Recession…
Revisiting the past The fact is that no FUNDAMENTAL analysis actually works for periods less than 1 year, and maximum people saw Sensex falling and called it recession. When sensex bounced back, they called it that recession is over, “Tezi ka zamana” is back. Sensex controls mood of even non-investors. Funny! But my question is: Can fundamentals change overnight? Are we in a trap? Is it a pullback?
A great Theory… Sent to us by one of our friend. See the vertical blue line… And see how nicely the left and right sides are mirror images. Meaning 5400, then 6100 is going to be back on Nifty? It may!
Nifty Medium Term Observations: Last time high at 5168. Channel resistance at 5320, 5400. The momentum is declining but still some steam is left. RHS formed in short term which will activate at 5160 Supports: 4970, 4700 Breakage of 4970 and a correction below that without touching newer highs will make it a lower high, which is very bearish. There was a double top at 5085, which is now broken. There is absolute absence of any meaningful correction. IF breaks 5320-5400, expect a stupendous rally (euphoric) which can see 6000+
Interpreting the observations Nifty made a strong pullback from 4550-5100. The periodic volatility has suddenly increased. As in there are suddenly high range movements in the Nifty (10% move) which were absent in the bull run of 2500 to 5100+. The current wave is definitely smaller than it’s previous wave. This could be a case of smaller wave which usually come after a bigger wave, but its too big to be considered as a smaller wave. Hence, we think that this is a smaller big wave, which is BEARISH. So, any top lower than 5168 will effect the classical definition of a bull market: Higher Highs, Higher Lows. A lower high would make the situation tense, if not panic. There was been a clear double top at 5085, which is broken. Now there is a RHS which is bullish, but will effect when 5168 breaks. The momentum is clearly declining on the whole but it still has some steam left. The market can now get into some very wide swings, of 10% like we just had, and with a little bullish tone, and the moment people get very comfortable with the levels and start thinking of 7000 8000 levels, we will be in a crash. People have bought usually when there is a time-wise correction without a price-wise correction and they have been stuck. On the other side, when there is a price-wise correction, they are afraid and they don’t buy. The same looks like the case right now. History suggests us that usually a decent correction happens, and except for once or twice, there has been no event where there has not been a meaningful correction after a stupendous rise.
Summarizing: (The color can be red) The color was green. It can be red. There was an extremely sharp pullback from 4950 to 5100. Going forward, 5168 is not a resistance but a critical level, if doesn’t breaks it will be a lower high, which will make the index weak. If breaks, it is likely to see an extended rally tgt 5300. 5320-5400 can be another significantly strong resistance, which if breaks can spark a rally to 6000+, which should be the last leg of rally. Supports 4970 4750. If 4750 breaks, there might be a dip to another 350 points in Nifty, to 4400, but then any pullback would be a lower high, and we might see lower and lower lows to 3550 zone. Dips come and go, what is important is to BUY in the dips. It’s a great time for traders.
Communication is going to be the next big thing, in long term. New services, valuations will happen. Buy Bharti on all declines. It will not move up for quite sometime.
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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+