Powergrid emerging from 3 years' consolidation

Synopsis:

Break - out of 3 years' consolidation


Rounding higher lows and higher tops formation on weekly chart


An open and close above a major resistance on weekly chart


RSI at 68.11 suggesting strength for the upside even in the coming weeks.


MACD in favor of bulls for 7 weeks.


Fast Stockastic and EMV suggest an over-bought zone still not reached on weekly chart.

As it is seen in the 8 years' weekly chart, the stock has given a break - out from 3 years' consolidation and is challenging the higher side of Bollinger Band.


Despite the spurt, the momentum indicators have not reached the over-bought territory.

As we see on the weekly Candlestick Chart, the stock has been forming higher lows and higher tops for 6 weeks and have closed above the intermediate resistance of 112.


Only a closing of 108 or below on weekly basis can be considered as a fall of this structure until the stock is a best bet for creating long for short term view.

Japanese currency to loose significantly

Is USD /JPY on a trend reversal?
This question arises seeing the movement of the currency in recent weeks.

Monthly chart

As we see on the monthly chart, the currency, has been in a constant selling mode after making a high of 124.16 in the month of June 2007.

The current momentum suggest that the currency has bottomed - out at 75.5 on monthly basis.

The larger degree momentum suggest a continuation of the on going rally of $ / JPY.

weekly chart

As we see on the weekly chart above, it has given the break -out above higher side of the bollinger band. That suggests much stronger movements ahead.

The higher StockRSI, positive break - out on MACD and other technical indicators suggesting strong buying ahead, makes me believe that the currency will touch 93.9 within a span of 6 -8 months.

Only a break below 75.5 can be considered as a fall of the structure.

Nifty for a trader in the month of March

• The January F&O series closed with upside of 11% and February with upside of 6.3%.
• Market showed gain of 22% from the low of 4588 on 2^nd January making a high of 5630 on 22^nd February.
• Nifty crossed the 200 DMA on 30^th Jan 12, after 3 failed attempts (07-July-11, 25-July-11 and 28-Oct-11) in last year.
• Considering the above factors, I believe the market has gained the momentum and it will remain so until it is above its 200 DMA which is now placed at 5172.
• As the rally in the Indexes have been large in these two months, we can expect some level of choppy-ness on the Monthly basis but, the intraday, intra-week volatility will remain higher.
• For trading in Nifty / Banknifty, a trader should approach a way of buying at dips and selling on rises rather than trading on break-outs.
• A Nifty trader can use any rise above 5600 for creating short and any fall below 5350 for creating long for the month.
• Stocks like TCS, HDFC BANK, LIC HOUSING, INDUSIND BANK and BATA INDIA which have been making new highs on QoQ basis even during last 4 years will continue to remain as best buys.
• Bigger opportunities are seen in the stocks which are rising from dust. A trader must approach such stocks with a clear-cut mindset that nothing is permanent, even the worst. DLF, Unitech and RCOM remains the hot bets in this segment.
• We would be seeing momentum building up even in the stocks which have not shown any momentum during last 3 years. We may witness momentum in TTML, MRPL and even MTNL.

As we see, in the daily chart, the nifty has been on the higher side of Bollinger band for more than 22 sessions and the momentum indicators like RSI, StockRSI, william% suggesting an over-bought zone.

But, important supports are placed at 5335 and 5260.

Updates about Nifty expiry report of 20th Feb as on 22nd Feb

On 20th Feb, I have mentioned the expiry for the Feb series kept in the range of 5335 - 5420.


However, till yesterday it seemed that the probability calculation of Nifty expiry not above 5600 may not work.

But, today's sell - off confirmed the weakness on higher levels as the Indexes being in overbought zone.

As we can see on the Daily chart, the important averages are placed way below.

The momentum indicators like StockRSI and Fast Stockastic suggest the weakness further for a few more sessions.

The following are the important moving averages:
8 days' exponential MA = 5492
21 days' exp. MA         =  5341
50 days' simple MA      =  5008
100 days' simple MA    =  5010
200 days' simple MA    =  5172
610 days' simple MA    =  5334

The overall scenario of Nifty suggest a major support at 5259.

However, if Nifty crosses today's high, buying will prevail again.

Sheetalpuri

+919879028295

Worst over for RCOM

• More than 90% correction from the top of Rs.844.7 in the 2nd week of Jan 08 to low of Rs.60.8 in the 3rd week of December 2012.
• Life time highest volume on weekly basis for the week ended on February 17, 2012.

As we see on the weekly chart of last 8 years', the stock has showed the life-time highest volume on NSE cash segment.

The other oscillators like RSI, Fast Stockastic, StockRSI are still positive.

Which suggest that the stock has bottomed out and the dips have to be considered as a buying opportunity for the stock.

However, on the daily chart, we see an intermediate resistance placed at 108 NSE Spot.

The correction in the index may lead to a correction up to 99 or even 94.

But, the larger degree picture of the stock suggest to use each and every dip as a buying opportunity only.

Only a closing below 80 can make the stock weaker for the days ahead and not until.

Sheetalpuri

+919879028295

Nifty expiry view for the month of February 2012

• The month of January 2012 was exceptional compared to last 47 months. But, it reminded again the month of January 2008.
• These two are the only months in the history of Nifty Options where Nifty has given closing of more than + - 10% variation on expiry basis.
• The funny part is both the January belongs to the leap year.

The question forward is if one January closing below 10% (that of 2008) made the market testing the bottoms, filling the gaps of 2004-05, what this January closing above 10% will do to the market.
Well, only the market will answer our questions further and markets are really beyond the predictions as always!

On the daily chart, we see the RSI being in over-bought zone for almost 24 sessions now.

So far so, the market has not confirmed any indicator of weakness, but considering the overbought zone and the important moving averages placed way below, we can expect the expiry for the month anywhere in the range of 5413 - 5332.

As we see in the chart, 5332 will act as a crucial support even going further.

Regards

Sheetalpuri

+919879028295

Gold for January 16 2012

The Gold Spot US is facing the resistance at $1736 for last 3 sessions.

Today's opening suggest a slid during the day.

The momentum indicators are suggesting an intraday fall up to $1705 which was the low of 10th February.

However, if it crosses $1737 which is yesterday's high, the buying would prevail.

Silver Outlook - February 14, 2012

The Greece bail out package has been discussed by the EU day before yesterday.
It seems as the on going rally on precious metals have been halted for time being.

In the daily chart, it can be seen that at $34.5, US spot has faced stiff resistance and for last 5 sessions, it has been forming the lower tops.

The momentum indicators also suggest selling pressure for a day or two.

However, it is very important to note that if it crosses $34.5 (on higher side), one must exit the selling position as the Weekly chart has not turned negative yet.

On weekly basis, an upside spurt is still on cards. For the MCX, the selling position can be created with strict stoploss of 57650. 

Crude Oil - Outlook

On Friday, I initiated a Buy on Crude MCX with stoploss of 4925. On that day, Crude made a low of 4855 and our stoploss was triggered.

But, during the late hours, the commodity bounced back and closed at 4922.

Now, if we see the overall picture of the commodity, we can see the monthly chart turning positive.

The StockRSI suggesting an upside spurt on monthly basis. Even the other indicators like MACD, UO and RSI are suggesting strength.

As I have mentioned, the commodity is positive on monthly basis and the MCX expiry is due on 20th Feb, I suggest to create position, for a view of 10th March.

However, if $97.4 is broken on WTI, it would be better to exit the long. So, it is important that one maintains the stoploss of 4855 for the long position in MCX.

NIfty outlook for the day February 14, 2012

As we can see in the chart, the Nifty spot has remained in the range of 5320 - 5400 for 6 sessions.

So, a break - out on either side on closing basis will decide the trend further.

However, for the day trade, we can sell Nifty Future at 5410 -5415, for the target of 5378 / 5356.

CrudeOil - Trade of the day

The WTI Crude is currently trading at $99.5. Last week the commodity touched almost $95 and then a pull back is seen.

On the daily chart, we can see that the momentum is building up.

The technical indicators have turned in the favor of the bulls.



The weekly chart also suggest a stronger up move forward.

On the weekly chart, it can be seen that a sharp movement can be seen up to $103 for the week.

On MCX, we can see a stronger up move up to 5025 for the day.

The stoploss for the position can be worked out to 4921.





Above all, the monthly chart for the commodity has turned positive and we may see a stronger up move during the month for the commodity.

Nifty update and stock of the month TCS

Though Nifty spot managed to sustain my resistance line of 5362 through out the day, we witnessed selling during the day.

The momentum indicators like Slow stockastic and Fast stockastic surely suggest the slowing down of the on going pace. 

Below 5362, selling would be seen up to 5280 for the day.
Remember, for every short position, the stoploss of 5405 is must.

Weekly chart of TCS (NSE - Eq)
The daily chart of TCS surely suggests an over-bought zone for the stock and one can expect the stock to show some weakness for a session or two.


But, the weekly chart indicates strong buying in the counter. Also, the momentum indicators suggest a sharp movement on weekly basis.


The last hurdle for the stock is closing above 1215. 
So, every dip is a buying opportunity for the stock. Remember, above 1220, it will rocket to new scales, new highs.

Sheetalpuri Goswami

+919879028295

performers of last 8 years

Indusind Bank

Indusind Bank remains my top pick. As it is about to close above 300, the stocks seems to be entering in the new range of bull.

TCS

The higher closings on weekly basis is evident of the bulls pushing the stocks for the new range.

HDFC BANK

HDFC BANK has remained a constant performer of the market. It is better keep the position in the stock like this.

BATAINDIA

Closing above previous high on weekly basis, will open new range for the stock.

LIC HOUSING

Higher bottom formation on weekly basis.

Natural Gas updates

Natural Gas MCX: Buy
Entry price : 114 - 120
Stoploss: 109
Target : 156
Time period : 1 month

The Natural Gas Future on MCX has been in constant down trend since last month.

The weekly trading range of the commodity has been as much as 30 points (20% upside and downside).

Since, the trading range has become large, it is more important to see the weekly chart.

On the weekly chart, we can see a formation of TWO INSIDE DOWN which is a bearish pattern.
If the MCX future closes below 125 on Friday, the bearish pattern would be confirmed.

On Monday, if it trades below Friday Close, a double digit rate for the commodity.

However, the most important level for the commodity is 119. The momentum indicators like StockRSI and RSI suggest a highly oversold zone. Even the MACD on monthly chart suggests a oversold position.

As the commodity is trading near its previous bottom, the risk-reward seems to be favorable for a long position. Yes, a stoploss of 109 is must for the position. The target can be expected for a period of 1 month to Rs.156.

Sheetalpuri Goswami

+919879028295

Nifty Positional - February 2, 2012

Nifty Future: Sell
Entry price: 5295 - 5320
Stoploss: 5343
Targets: 5075 / 4948

In the beginning of the C.Y. 2012, we have seen a sharp rally in Nifty. After making a low of 4676, Nifty zoomed to 5270 in a month's time.

In % terms, it can be said that the Index has moved by 15%.

However, on the daily chart it can be clearly seen that a resistance has been placed at 5320 in Nifty spot.

The Gap-down opening of 5th August, 2011 will act as a resistance for the market.

The momentum indicators also suggest an over-bought zone.

However, if the Nifty spot crosses the resistance zone, it would not be prudent to remain short.
Also, it is important to note that after 4 attempts, Nifty spot could cross its 200 DMA.

In, short, the recommendations has to be followed with a strict stoploss mentioned.

Sheetalpuri Goswami

+919879028295