NIFTY FUTURES (F & O)
Below 2722 level, selling may continue up to 2710 level by non-stop.
Hurdles at 2733 & 2744 levels. Above these levels, expect short covering up to 2766-2768 zone and thereafter expect a jump up to 2787-2789 zone by non-stop.
Sell if touches 2823-2825 zone. Stop Loss at 2844-2846 zone.
Short-Term Investors:
Bearish Trend. 3 closes below 2974 level, it can tumble up to 2510 level by non-stop.
False signal is likely. Traders can expect fall further.
Short-Term Investors:
Short-Term trend is Bearish and target at around 8208 level on down side.
USE STRICT Stop Loss for todays trading
Short Educomp-1772 for 1660-1543 with sl 1825
Short Grasim-1345 for 1300-1285 with sl 1355
Short ZEEL-112 for 105 with sl 115
Short Powergrid-86 for 82 with sl 88
Expectation "there is no rate cut" 5. Big boys delay in project
implementation 6.
Weekly Market Outlook 24th -27th Feb 2009
The overseas markets were most unhelpful, slithering and sliding to multi-year lows, causing nervous jitters amongst the trading fraternity back home. Volumes were extremely low in cash market though they were decent in the derivative segment implying that traders are currently calling the shots in our market. FIIs turned net sellers once again taking the total outflow for 2009 to $1.3 billion.
The Sensex could make no headway last week and declined firmly below the 50-day simple moving average as well as our key short-term trend deciding level of 9050. The 10-day rate of change oscillator and the14-week relative strength index have moved in to the negative zone again signaling weakness in the short-term. Oscillators in weekly chart too are signaling a sell after a failed attempt to move in to the bullish zone.
If we follow conventional techniques, the Sensex is in a sideways trend since last October. The broad range for the Sensex over this move was between 8300 and 11000. It is normal for trepidation levels to increase every time the index nears the lower boundary of a trading range. It is then very easy to believe that there could be another 20 to 30 per cent decline from those levels. The reverse is true when the upper end of a trading band is reached as hope soars. The right approach would be to wait for either boundary to be breached before deciding on the next move.
The symmetric triangle formation that we had been tracking as per Elliott Wave rules, ended at 9724 and the lower trend-line of the triangle was also breached. The decline recorded last week can be labelled as either, a) The last wave down of the five-wave pattern from the January 2008 peak. The downward targets as per this count are 7300 and lower. b) Or an X wave that can be followed by another three or five wave pattern. If the index recovers from the zone between 8000 and 8500, we would have to revert to this count.
In other words, though the Sensex has reversed lower and gloom and doom is pervading everywhere, index is still above the support at 8300. A close below this level would be the first signal that investors should brace themselves for another plunge. Supports for the week ahead are at 8631, 8316 and 7697. A rebound can take the index higher to 9375 or 9725. Close above the second resistance is required to make the short-term outlook positive again.
Rallies will face resistance at 2870 and 2930. Short term traders can play short as long as the index trades below the first resistance. The medium term trend is however still sideways and there are a cluster of supports just below at 2660, 2570 and 2502. The medium term view will turn overtly negative only on a close below 2500. Such as move will signal that the down trend from the last January peak has resumed.
A couple of monthly closes below this level is needed to sound the death knell for the structural bull market in equities. As per Elliott Wave counts, a significant low can be formed around 7500 in DJIA which can be followed by an intermediate term rally lasting a few months. But a strong decline below 7500 will give the next target at 6500 for this index. The S&P 500 is still holding above its 2008 lows.CBOE Volatility index spiked to 50 though it is way below the peak at 89 recorded last October. Investors have probably learnt to live with the bad news and sliding stock markets. Many of the European indices such as the CAC, DAX, Greece General Share Index, Italy's MIBTEL and Spain's Madrid General index are testing their 2008 lows or are already below it. Asian markets led by China and the Latin-American markets have weathered the decline relatively well over the last month.
The stock has given up all the gains made in the previous three weeks and is currently testing the support at Rs 165.
A short-term bounce can take the stock to Rs 180 or Rs 190, but traders can initiate fresh shorts on a reversal from either of these levels.
The near-term view will turn positive only on a close above Rs 205.
Weakness in daily oscillators and the feeble recovery over the last three sessions implies that the stock can head lower to Rs 145 or Rs109.
We retain a neutral medium term view as long as Tata Steel trades above Rs 140.
However, fresh purchases should be avoided on a decline below this level.
Since these levels are close to the lower boundary of our medium term trading range, investors can watch out for buying opportunities in such declines.
However, there would be no need to press the panic buttons unless Infosys records a weekly close below Rs 1,000.
The resistance at Rs 636 remains a serious hurdle for the near term.
The formation of a hanging man pattern on the weekly chart implies that the up-trend from the December 5 trough could have ended last week.
A decline to Rs 520 or Rs 440 is now possible over the medium term.
A strong rally above Rs 650 is required to mitigate this bearish view and pave the way for a rally to Rs 750.
The stock is struggling to cross above the long-term 200-day moving average at Rs 640.
A strong surge past this level is needed to take it higher to Rs 673 and eventually to Rs 750.
The possibility of a decline to the October 27 trough at Rs 538remains open over this term. But the long-term support around Rs 550 can cause another sharp intra-day rebound in steep declines.
The bearish engulfing candle in the weekly portends the possible resumption of the down trend that commenced from the January 5 peak.
As per this assumption, the decline can continue to drag the stock to Rs 991 and below that to Rs 860.
It may however be recalled that SBI has strong long-term support around Rs 1000, that occurs at 61.8 per cent retracement of the bull-market from 2001.
A rebound is possible from the zone between Rs960 and Rs 1,000. Short term resistances are at Rs 1,102 and Rs 1,140.
Traders can sell in rallies as long as the stock trades below the second resistance.
Consider short straddle strategy using Nifty Feb 2700-strike. While the call is quoting at 36.10, the put is quoting at 57.20. A short straddle is a combination of writing uncovered calls (bearish) and writing uncovered puts (bullish). Short straddles can be pursued when one believes that the price of the underlying asset will be range-bound. This strategy would turn profitable only when the price moves in that range. On the other hand, if the price moves wildly out of the range in any of the direction, the strategy can result in a heavy loss. As one has to dole out higher margins, for writing options, this strategy is suitable for traders with a higher risk appetite only.
Traders could consider going short on Nifty future, if it dips below 2700 (March). In that event, the stop loss could be 2750 and they can book profit at 2650, 2500 levels as per their individual risk profile.
 | 2736.45 | ( -1.90 %) | -52.90 |  |
| 1 | 2 | 3 | ||
| Resistance | 2780.73 | 2825.02 | 2860.73 | |
| Support | 2700.73 | 2665.02 | 2620.73 | |
 | 8843.21 | ( -2.21 %) | -199.42 | | |
| 1 | 2 | 3 | |||
| Resistance | 8937.13 | 9031.06 | 9118.33 | ||
| Support | 8755.93 | 8668.66 | 8574.73 | ||
This is list of 10 strong futures:
Nifty is in Down Trend.
| FII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores) | ||||
| Category | Date | Buy Value | Sell Value | Net Value |
| FII | 20-Feb-2009 | 956.27 | 1157.44 | -201.17 |
| DII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores) | ||||
| Category | Date | Buy Value | Sell Value | Net Value |
| DII | 20-Feb-2009 | 742.66 | 575.48 | +167.18 |
Trading in the stock market is no less risky then trying to make a living off a roulette wheel; there are significant fluctuations in the price movements. However, unlike the roulette, the randomness here is fuelled by the perception of the participants. One of the tools to identify such perceptions is technical analysis, which is a study of two aspects — the price and the traded volume of a stock. These observations are plotted on a graph across a specific timeline for better analysis. The idea is to understand the mood of the market conveyed through the movements on the chart.
At this level, buyers will come in to buy the stock and even sellers with a bearish view may not see the price falling further. A similar agreement on overheated prices between buyers and sellers creates a hurdle or 'resistance' for the stock price from going up. These levels are vivid and recurrent. The stock price falls to a particular point and bounces back taking support. At 'resistance' points, stocks hit a barrier, restricting further rise.
Again, one must see it in conjunction with decent increment in volume, signifying a mass change on the consensus about the new prices levels. Once a resistance is crossed convincingly, it becomes a significant support and once a support is penetrated strongly, it turns in to a resistance.
Technical analysis has several such indicators or tools which can be used to interpret stock price patterns and trade them profitably.
But the most important tool is discipline in trading within the visibility provided by the technical tool. Set your biases aside and restrict the losses and take profits wherever the tools indicate!
