Believe that most of us have heard of stock market operators. They are known by many different names and they are constantly the blame for our financial losses. In some parts of the world, they are known as sharks, syndicates, big bosses, speculators, liars, cheaters or stock market manipulators. Some of us cheer their existence and their operations while some cursed them as if they are the culprits to our financial ruins. Are they our friends or foes? As the famous saying goes, know thy foes and you will have the upper hand in battle. In this post, I will challenge and dare you to swim with the sharks and eat from the crumbs of their feeds and not to be their feed. Here I would like to bring out some of my personal thoughts on this question that most newbie has.
Ok, here is the short answer. Yes, you are right. They existed and their operations are hidden from most people especially the newbie in these financial markets. I believe if we know them and how they operate, we could actually move along with them. In fact, the whole purpose of technical analysis is to determine the balance of demand and supply and the stock market operators are some of the powerful and rich individuals or groups with much buying and selling power. If we are able to track their movement, we will be able to profit from their operations. However, if we are ignorant of their existence, we could be their next meal.
Basic facts of stock market operators are listed below for your reference.
They work individually or in a group.
They rely on the market trends to help them in their mission.
The general publics are their big customers.
They together work with the public listed company owners or insiders.
They have a main mission objective to accomplish.
The bulk of their operation revolved around the accumulation and the distribution of stocks from / to the general publics.
They are rich and powerful figures but they are also humans that have emotions like all of us.
They have extensive credit facilities and lower transaction costs than the retail investors.
They do make mistakes like any one of us. Their mistake costs millions in dollars.
Market news, stock market analyst, corporate announcements, word of mouth advertising, price bidding and order queues are some of their tricks and tools that they used to achieve their main objective.
They don’t try to pick the bottom or the top like most retail investors do. Again, some of them try to do this and it costs them much sorrow and dismay.
They do attempt to manipulate the chart to trick the chartist whether you like it or not.
They are both the buyer and seller in the queue order at any given time.
They are not doing charity work. They existed to make your money.
It is important to understand them well as they are big volume buyers and sellers. They can tilt the balance of demand and supply. Understanding the above traits of stock market operators will help to clear some of the myths that we have of them. Remember, they are humans like us. Some of the above points deserved to be elaborated further to bring out the secrets of trading methodologies that we will employ in our technical analysis.
Primary market trends are very important to their success and failures. If they judge wrongly on this, they could go bust easily as the power of leveraging will work against them. Remember this, they cannot fight against the trends and they don’t have the strength to do so. Don’t ever think that they can swim against the tides.
If their mission objective is to acquire stocks, they might push down the prices to cause temporary market panics to squeeze out the stocks out from the speculators and investors and this is especially true in certain countries where short-selling is not allowed. The success of this technique will depends on what sort of people that are holding the stocks. This will get rid of the intraday and short term traders. However, they will try to maintain the prices around a certain range as to keep the sellers motivated. Usually the public listed company owners and insider will work in tandem to collect the shares from the general public. After they exhausted the fearful speculators and investors, they will then turn their eyes to the stronger speculators and investors by pushing up the prices higher to catch their interests.
If their mission is to distribute stocks, they will push up the stock prices to catch the attention of speculators and investors. They will work with market analyst to create beautiful pictures of the company prospects. They will work with the public listed company owners and insiders to create scarcity of stocks. At this moment of time, they will also announce all the good news while pushing up the stock prices. They will queue up as buyers and sellers in the order queue. They will buy their own stocks to create volume to entice the crowd to follow. As they bid up and down the prices, stocks were distributed without the awareness of the general public.
I believe that this write-up will increase our trading knowledge and make us a wiser trader. I will continue to write of how we can profit from their operation in future posts whenever I managed to get my time organized.
Thursday, August 27, 2009
Morning update on 27 aug 09
Last night us markets closed absolutely flat. Brazil was up by .6%.european markets were down by about .5%.asian markets have opened weak to mixed but may remain flat to mixed for the day exerting a negative influence on indian markets at the start.
For indian markets, being expiry day, it is wiser to avoid fresh trading till 1 pm. Most of your trades even though may look attractive before the entry, may just go the other way after your entry button is clicked. Traders are advised to trade stock & nifty futures of sept series only around the extremities of its daily trading range from its pivot point. Quit at tight stop loss after the support or resistance breached, to pick up again at distant levels to see it giving you profit any time before end. The expiry day being a highly unpredictable day, the less the trade the better it is for future traders.
In case of a fall, long term investors may quietly accumulate cairn ,cipla, biocon , unitech & suzlon, the 5 future jewels for long term purpose. Forget fundamentals or technicals in these & just accumulate these on every fall and forget for next 2 years to see at least 4 times gain in all these 5 jewels.
For indian markets, being expiry day, it is wiser to avoid fresh trading till 1 pm. Most of your trades even though may look attractive before the entry, may just go the other way after your entry button is clicked. Traders are advised to trade stock & nifty futures of sept series only around the extremities of its daily trading range from its pivot point. Quit at tight stop loss after the support or resistance breached, to pick up again at distant levels to see it giving you profit any time before end. The expiry day being a highly unpredictable day, the less the trade the better it is for future traders.
In case of a fall, long term investors may quietly accumulate cairn ,cipla, biocon , unitech & suzlon, the 5 future jewels for long term purpose. Forget fundamentals or technicals in these & just accumulate these on every fall and forget for next 2 years to see at least 4 times gain in all these 5 jewels.
Markets for 27 aug 09
On wednesday, nse index in spite of all the push to reach 4700 levels, failed to touch it on 3 attempts and could just manage to reach till 4698. However both the august and the sept futures could manage to cross 4700 levels but closed below it. Now everyone is waiting for the expiry day to see whether nifty closes above the 4700 mark or surprises every one by operators action to pull down nifty out of the blue towards 4600 levels. Based on pure technicals, nifty is all set for a mega rise in coming days. Whether the sharp up move comes on expiry day which comes after 5 consecutive days of up days or may come after a pause or mild correction has to be seen. A cross over and sustaining above 4th aug highs of 16002 & 4731 can see a very sharp up move in indices which most likely may come around early september.
If one has a closer look at the hourly chart above , important indicator slow stochastic is giving negative divergence . Interestingly the same negative divergence by the same indicator was observed yesterday also where indices are moving higher but the indicator is failing to make new highs. But the days around expiry being fully under the control of operators, such deceptive indications are part & parcel of the operators game plan. As long as nifty does not fall to breach 4656 to 4636 zone, it will move up & up only. A decisive breach of 4636 with volume can only spell danger for bigger falls towards sub 4600 levels.
Andrews pitchforks median line in blue in the chart above now has gone above 4700 levels and will slowly & gradually pull nifty towards it. The lower fork now around 4600 levels will provide the required support for nifty in coming days. In the daily eod charts daily macd & cci are indicating sharp up moves that may perhaps come after the expiry
If one has a closer look at the hourly chart above , important indicator slow stochastic is giving negative divergence . Interestingly the same negative divergence by the same indicator was observed yesterday also where indices are moving higher but the indicator is failing to make new highs. But the days around expiry being fully under the control of operators, such deceptive indications are part & parcel of the operators game plan. As long as nifty does not fall to breach 4656 to 4636 zone, it will move up & up only. A decisive breach of 4636 with volume can only spell danger for bigger falls towards sub 4600 levels.
Andrews pitchforks median line in blue in the chart above now has gone above 4700 levels and will slowly & gradually pull nifty towards it. The lower fork now around 4600 levels will provide the required support for nifty in coming days. In the daily eod charts daily macd & cci are indicating sharp up moves that may perhaps come after the expiry
Wednesday, August 26, 2009
Morning update on 26 aug 09
As expected, dow from a 110 point + at one time, corrected gradually after the closure of +ve european markets to finally close 30 point up with more important s&p500 gradually inching up to 1028. European markets were up from 1% to .4% with uk ftse closing at.4%. Brazil closed in the red with .6%-ve. Asian markets having fallen on tuesday due to china effect, have opened mixed to mildly weaker & may close flat to mixed for the day again with a -ve bias.
For indian markets, expect a flat to milder opening in line with asian markets. With thursdays expiry considerations coming into play today, it may again be a volatile day. Although technically the markets look extremely strong to go further up from here, expiry considerations and influence of asian markets may delay the up move to either post expiry or may be towards early september. So one can expect a volatile but range bound market within the range of 4600 to 4700 till expiry.
Traders are advised to accumulate long positions in september series on every decline of nifty towards 4600 or lower levels as there are every indication of nifty moving up towards 5000 levels in september.
For indian markets, expect a flat to milder opening in line with asian markets. With thursdays expiry considerations coming into play today, it may again be a volatile day. Although technically the markets look extremely strong to go further up from here, expiry considerations and influence of asian markets may delay the up move to either post expiry or may be towards early september. So one can expect a volatile but range bound market within the range of 4600 to 4700 till expiry.
Traders are advised to accumulate long positions in september series on every decline of nifty towards 4600 or lower levels as there are every indication of nifty moving up towards 5000 levels in september.
Markets for 26 aug 09
On tuesday the markets behaved as if it was the expiry day. Nifty after a bout of volatility with expiry type volume within the expected band of 4582 on the lower side and 4673 on the higher side closed nearly flat at 4659 compared to mondays close of 4643.what was interesting to note was, every fall invited heavy buying interest & shorts were covered. The pin bar formed in the last hourly candle of monday played its role of bringing down nifty with a gap down open followed by the slide towards 200 hourly ema where it found solid buying support & continuously move up to breach mondays high of 4656 to reach up to 5673.
Tuesdays low around 4582 is likely to be a strong support this week. Although us markets had a pause by closing flat on monday, the china factor continued to threaten asian markets which closed in the red. With us markets having had their quota of pause on tuesday night & all set to bounce with vigor on wednesday night, one has to wait & see how asian markets behave on wednesday morning.
If one has a closer look at the hourly chart above, one will notice that nifty is confined within a upward moving channel a breach of lower band of the channel can bring it down to find support around 4600 or till tuesdays lows of 4582 levels. On the upper side it faces resistance around 4688 levels a breach of which can easily take it past 4700 levels. With the important indicator slow stochastic showing signs of weakness, unless there are solid rear guard action by the bulls early on wednesday, there is every possibility of nifty first falling towards 4600 levels to be followed up by up move as was seen on tuesday. However strong asian markets if freed from the chinese effect, can easily boost nifty to initially move up to nullify this negative indications by taking stochastic into the upper zone again.
WITH BOTH AN INSIDE & OUT SIDE RED NRB FORMED ON EITHER SIDE OF THE GREEN WRB IN THE LAST 3 HOURLY CANDLES IN THE CHART ABOVE, A BREACH OF 4673 THE HIGH OF THE WRB CAN SEE A SHARP UP MOVE & SIMILARLY A DOWN SIDE BREACH OF THE WRB AT 4633 CAN SURELY BRING NIFTY DOWN TOWARDS 4600 OR LOWER LEVELS. SINCE, ASIAN MARKETS HAD CORRECTED ON TUESDAY & INDIAN MARKETS HAD CLOSED IN THE +VE, WEDNESDAY MAY SEE A REVERSE ACTION WHEN ASIAN MARKETS MAY RISE & INDIAN MARKETS MAY REMAIN FLAT OR CLOSE WEAKER BY END OF THE DAY. IF THAT HAPPENS, THEN EXPECT NIFTY TO RETEST 4600 OR EVEN 4580 LEVELS. HOWEVER, IF ONE GOES AS PER PURE TECHNICALS, THEN THERE IS EVERY POSSIBILITY OF NIFTY TESTING 4700 OR EVEN HIGHER LEVELS ON WEDNESDAY.
DOW WHICH WAS MORE THAN 100 POINTS UP WHEN EUROPEAN MARKETS WERE TRADING, WILL FALL TO CLOSE MILDLY +VE BY END OF THE DAY AS THIS WOULD BE THE 5TH CONSECUTIVE DAY OF RISE IN DOW IF YOU COUNT WEDNESDAYS 3 POINT +VE CLOSE AS A RISE.
Tuesdays low around 4582 is likely to be a strong support this week. Although us markets had a pause by closing flat on monday, the china factor continued to threaten asian markets which closed in the red. With us markets having had their quota of pause on tuesday night & all set to bounce with vigor on wednesday night, one has to wait & see how asian markets behave on wednesday morning.
If one has a closer look at the hourly chart above, one will notice that nifty is confined within a upward moving channel a breach of lower band of the channel can bring it down to find support around 4600 or till tuesdays lows of 4582 levels. On the upper side it faces resistance around 4688 levels a breach of which can easily take it past 4700 levels. With the important indicator slow stochastic showing signs of weakness, unless there are solid rear guard action by the bulls early on wednesday, there is every possibility of nifty first falling towards 4600 levels to be followed up by up move as was seen on tuesday. However strong asian markets if freed from the chinese effect, can easily boost nifty to initially move up to nullify this negative indications by taking stochastic into the upper zone again.
WITH BOTH AN INSIDE & OUT SIDE RED NRB FORMED ON EITHER SIDE OF THE GREEN WRB IN THE LAST 3 HOURLY CANDLES IN THE CHART ABOVE, A BREACH OF 4673 THE HIGH OF THE WRB CAN SEE A SHARP UP MOVE & SIMILARLY A DOWN SIDE BREACH OF THE WRB AT 4633 CAN SURELY BRING NIFTY DOWN TOWARDS 4600 OR LOWER LEVELS. SINCE, ASIAN MARKETS HAD CORRECTED ON TUESDAY & INDIAN MARKETS HAD CLOSED IN THE +VE, WEDNESDAY MAY SEE A REVERSE ACTION WHEN ASIAN MARKETS MAY RISE & INDIAN MARKETS MAY REMAIN FLAT OR CLOSE WEAKER BY END OF THE DAY. IF THAT HAPPENS, THEN EXPECT NIFTY TO RETEST 4600 OR EVEN 4580 LEVELS. HOWEVER, IF ONE GOES AS PER PURE TECHNICALS, THEN THERE IS EVERY POSSIBILITY OF NIFTY TESTING 4700 OR EVEN HIGHER LEVELS ON WEDNESDAY.
DOW WHICH WAS MORE THAN 100 POINTS UP WHEN EUROPEAN MARKETS WERE TRADING, WILL FALL TO CLOSE MILDLY +VE BY END OF THE DAY AS THIS WOULD BE THE 5TH CONSECUTIVE DAY OF RISE IN DOW IF YOU COUNT WEDNESDAYS 3 POINT +VE CLOSE AS A RISE.
Tuesday, August 25, 2009
Morning update on 25 aug 09
US markets as was expected closed absolutely flat so also was brazil. European markets which close earlier than us markets were 1% up. Asian markets after the big rise of monday have opened mildly weak & may close flat to mildly weak .
For indian markets, expect a flat to mildly weaker opening. The trading range is likely to be confined within the mondays trading range of4656 to 4596 to finally close flat or mildly weak. Unless there are further +ve cues from us markets, the chances of further up move beyond 4700 looks to be highly remote before expiry.
For intraday trading on tuesday, in case nifty falls below 4625, the low of the pin bar in the hourly chart above, chances of further fall towards 4596 to 4588 or even lower levels may be expected. Similarly on the higher side a rise to breach 4656 can nullify this bearish pin bar. Most likely nifty is likely to trade in a tight range with a negative bias to harass option buyers & reward option writers.
For indian markets, expect a flat to mildly weaker opening. The trading range is likely to be confined within the mondays trading range of4656 to 4596 to finally close flat or mildly weak. Unless there are further +ve cues from us markets, the chances of further up move beyond 4700 looks to be highly remote before expiry.
For intraday trading on tuesday, in case nifty falls below 4625, the low of the pin bar in the hourly chart above, chances of further fall towards 4596 to 4588 or even lower levels may be expected. Similarly on the higher side a rise to breach 4656 can nullify this bearish pin bar. Most likely nifty is likely to trade in a tight range with a negative bias to harass option buyers & reward option writers.
Markets for 25 aug 09
The markets did more than it was expected out of them. Nifty has decisively crossed both 50 dma at 4400 & now 20 dma at 4537 and also on monday it breached and closed above 4619,the b wave of the abc correction from the high of 4731 till the low of 4353.generally when the upward thrust crosses the top of the b wave of the previous correction it generally moves up to shoot past the previous high as a new up wave. So with a little bit of pause here & there one should generally expect nifty to shoot past the 4th aug high of 4731 to much higher levels in coming days with the expiry posing as a minor hindrance to the up move past 4731.
As per pure technicals, the markets look extremely bullish having closed above the neck line of the larger w formation with the base around 4350 levels and neck line around 4619 levels which over a period of couple of days should take nifty up by 270 points from the neck line towards 4890 levels if not before te expiry, certainly within a few days after the expiry. The neck line around 4620 levels will now be a support to invite buying interest. The 3 months of flat type consolidation after the election verdict spurt looks to be over and in all probabilities one can see nifty testing 5000 levels in september. With andrews pitch fork median line moving up day by day , it will attract nifty towards it now around 4700+ levels very soon and if things things move as they are now, purely based on technicals, one should not be surprised to see an expiry around 4700+ levels on the coming thursday
FOR INTRADAY TRADING ON TUESDAY, NIFTY HAS STRONG SUPPORT AROUND 4600 TO 4590 LEVELS THAT MAY INVITE GOOD BUYING INTEREST. ON THE HIGHER SIDE, IT MAY FIND INITIAL RESISTANCE AROUND MONDAYS HIGH OF 4656 & THEN 4680 LEVELS, ABOVE WHICH IT MAY JUST TRY TO SNEAK INTO 4700 LEVELS THAT MAY INVITE HEAVY PROFIT BOOKING. US MARKETS AFTER 4 CONSECUTIVE DAYS OF RISE HAS PAUSED FOR A DAY OR TWO TO SHOOT UP AGAIN AFTER THE PAUSE.
As per pure technicals, the markets look extremely bullish having closed above the neck line of the larger w formation with the base around 4350 levels and neck line around 4619 levels which over a period of couple of days should take nifty up by 270 points from the neck line towards 4890 levels if not before te expiry, certainly within a few days after the expiry. The neck line around 4620 levels will now be a support to invite buying interest. The 3 months of flat type consolidation after the election verdict spurt looks to be over and in all probabilities one can see nifty testing 5000 levels in september. With andrews pitch fork median line moving up day by day , it will attract nifty towards it now around 4700+ levels very soon and if things things move as they are now, purely based on technicals, one should not be surprised to see an expiry around 4700+ levels on the coming thursday
FOR INTRADAY TRADING ON TUESDAY, NIFTY HAS STRONG SUPPORT AROUND 4600 TO 4590 LEVELS THAT MAY INVITE GOOD BUYING INTEREST. ON THE HIGHER SIDE, IT MAY FIND INITIAL RESISTANCE AROUND MONDAYS HIGH OF 4656 & THEN 4680 LEVELS, ABOVE WHICH IT MAY JUST TRY TO SNEAK INTO 4700 LEVELS THAT MAY INVITE HEAVY PROFIT BOOKING. US MARKETS AFTER 4 CONSECUTIVE DAYS OF RISE HAS PAUSED FOR A DAY OR TWO TO SHOOT UP AGAIN AFTER THE PAUSE.
Monday, August 24, 2009
Morning update at 8 am 24 aug 09
Dows 155 point rise coupled with a break out move of s&p500 to close above the level of 1025 has given the right impetus to the world markets for another bout of sharp up move towards fresh august highs. Brazil was up by 1.6% and european markets were up from 2 to 3% with uk ftse closing up by 2%. Asian markets have opened with big gap & may continue to inch up in coming days.
For indian markets, one may see a big gap up opening around 4600 levels but whether the critical level at 4619 will be decisively crossed today or not has to be seen. Traders may wait for any intraday decline to enter long positions in their favorite stocks. Option traders holding long positions in calls may hold the calls and write calls of 4700 on market rise. Put writers of 4400 & below should book profit on shorted puts as nse index reaches 4600 levels. Put buyers may quit early or buy calls of 4600.fresh traders may wait for the intraday decline in index to buy september futures and 4700 calls & hold.
Stocks in the sectors of metals, cement, oil & gas exploration, power and pharma which had seen sharpest fall or were subdued during last week, may have the sharpest rise during the current rise. Traders & investors may accumulate these on every decline for very good gains in the near term.
For indian markets, one may see a big gap up opening around 4600 levels but whether the critical level at 4619 will be decisively crossed today or not has to be seen. Traders may wait for any intraday decline to enter long positions in their favorite stocks. Option traders holding long positions in calls may hold the calls and write calls of 4700 on market rise. Put writers of 4400 & below should book profit on shorted puts as nse index reaches 4600 levels. Put buyers may quit early or buy calls of 4600.fresh traders may wait for the intraday decline in index to buy september futures and 4700 calls & hold.
Stocks in the sectors of metals, cement, oil & gas exploration, power and pharma which had seen sharpest fall or were subdued during last week, may have the sharpest rise during the current rise. Traders & investors may accumulate these on every decline for very good gains in the near term.
Markets for 24 aug 09
The expiry week opens with the back drop of bullish break out in the us markets on friday night and also a last hour bullish break out in the nifty above the resistance of 4495 to reach 4539.on the basis of pure technicals, the markets certainly look extremely bullish for monday & should at least take nifty towards 4595 to 4600 levels if there are no nasty surprises from asian markets. The reverse h&s formation as you see in the chart above can take nifty by at least 140 points from the break out point of 4495 towards the target of 4636 in next 1 or 2 days with the major resistance of 4619 posing a threat for some time.
For intraday trading on monday, with bullish asian opening, expect a gap up open around 4555 to 4568 levels followed by the as usual marking time in a flat range for 1 or 2 hours before deciding further course of action. In case of nasty surprise from asian markets, nifty finds strong support around 4509 followed by 4494 and finally 4469 that will bring in strong buying interest. On the higher side nifty faces initial resistance around 4555 followed by 4569. A decisive breach and sustaining over 4569 can take nifty towards 4595 or even 4619 which is quite possible if asian markets & sgx nifty do not play the spoil sports at the beginning. A decisive close above 20 dma around 4540 can add further strength to nifty for another big rise in coming days.
As per the chart above, andrew pitchfork median line (marked in blue) goes around 4640 to 4650. Nifty having successfully taken support at the lower fork around 4400+ levels should generally eye for testing the upwards moving median line around 4600 to 4650 levels shortly. Long term investors should keep on accumulating for good gains in the long term. Swing traders now may continue to hold their longs with a close below 4353 to 4333 as their quitting point.
Although us markets have had a consecutive 4th day of rise on friday and are ripe for a pause that may induce asian operators to take advance action on monday, yet the markets definitely are in for some more up move this week. With s&p500 having shown some sort of a break out momentum on friday, there is every possibility of some more up move in us markets in coming days after the expected pause that may induce a bullish momentum in other asian as well as indian markets in coming days.
For intraday trading on monday, with bullish asian opening, expect a gap up open around 4555 to 4568 levels followed by the as usual marking time in a flat range for 1 or 2 hours before deciding further course of action. In case of nasty surprise from asian markets, nifty finds strong support around 4509 followed by 4494 and finally 4469 that will bring in strong buying interest. On the higher side nifty faces initial resistance around 4555 followed by 4569. A decisive breach and sustaining over 4569 can take nifty towards 4595 or even 4619 which is quite possible if asian markets & sgx nifty do not play the spoil sports at the beginning. A decisive close above 20 dma around 4540 can add further strength to nifty for another big rise in coming days.
As per the chart above, andrew pitchfork median line (marked in blue) goes around 4640 to 4650. Nifty having successfully taken support at the lower fork around 4400+ levels should generally eye for testing the upwards moving median line around 4600 to 4650 levels shortly. Long term investors should keep on accumulating for good gains in the long term. Swing traders now may continue to hold their longs with a close below 4353 to 4333 as their quitting point.
Although us markets have had a consecutive 4th day of rise on friday and are ripe for a pause that may induce asian operators to take advance action on monday, yet the markets definitely are in for some more up move this week. With s&p500 having shown some sort of a break out momentum on friday, there is every possibility of some more up move in us markets in coming days after the expected pause that may induce a bullish momentum in other asian as well as indian markets in coming days.
Friday, August 21, 2009
Morning update at 8 am 21 aug 09
Last night dow was up 72 points the 3rd consecutive day of rise which has now entirely retraced the 200 point fall on monday & is looking up now after generating the fear across the world markets that a big down side correction was due. Well, after 3 days of rise, it still has the friday night in its kitty to prove the point. European markets were up by 1.5% with uk ftse closing up by 1.4%.asian markets after a good rise yesterday have just opened mixed and may close mixed to +ve for the day.
For indian markets expect a flattish to mildly bullish opening. Initial range between 4444 to 4464 will play an important role. A decisive breach on any side may show a good move on that side. There is every possibility that the day has a good upside closing today to go on a buoyant note for the coming expiry week. A decisive breach of 4444 on the down side may pull nifty towards thursdays opening gap till 4422 but chances of breaching 4400 looks highly remote. Similarly a decisive cross over of 4464 can take nifty towards critical resistance around 4495 levels, a breach of which with good volume may generate a sharp up move induced by short covering. In any case, a close above 4515 can open the flood gates for another good bounce next week.
Traders may like to go light for the expiry week without any heavy carry over positions on friday & it would be wiser to start fresh on monday although the wind is blowing towards up side next week. Risky traders holding lower calls of 4400 may boldly write (short) 4600 & 4700 calls on rise of nifty towards 4500 or higher levels and if holding 4400 puts then also boldly write 4300 puts on intraday fall of markets towards 4400. Long term investors must quietly accumulate their choice stocks specially in power, oil & gas exploration & infra sectors for extremely good gains over the long term.
For indian markets expect a flattish to mildly bullish opening. Initial range between 4444 to 4464 will play an important role. A decisive breach on any side may show a good move on that side. There is every possibility that the day has a good upside closing today to go on a buoyant note for the coming expiry week. A decisive breach of 4444 on the down side may pull nifty towards thursdays opening gap till 4422 but chances of breaching 4400 looks highly remote. Similarly a decisive cross over of 4464 can take nifty towards critical resistance around 4495 levels, a breach of which with good volume may generate a sharp up move induced by short covering. In any case, a close above 4515 can open the flood gates for another good bounce next week.
Traders may like to go light for the expiry week without any heavy carry over positions on friday & it would be wiser to start fresh on monday although the wind is blowing towards up side next week. Risky traders holding lower calls of 4400 may boldly write (short) 4600 & 4700 calls on rise of nifty towards 4500 or higher levels and if holding 4400 puts then also boldly write 4300 puts on intraday fall of markets towards 4400. Long term investors must quietly accumulate their choice stocks specially in power, oil & gas exploration & infra sectors for extremely good gains over the long term.
Markets for 21 aug 09
POSITIVE OVERNIGHT DOW COUPLED WITH STRONG ASIAN MARKETS INDUCED A GAP UP BULLISH OPENING FOR INDIAN MARKETS. NIFTY OPENED GAP UP HIGH ABOVE 4460 LEVELS AND REMAINED IN THE BAND OF 4485 TO 4455 FOR MOST OF THE TIME . A SPURT TOWARDS LATER HALF TO REACH TUESDAYS HIGHS OF 4494 INVITED HEAVY PROFIT BOOKING AND FINALLY NIFTY FELL TO 4444 LEVELS TO CLOSE AROUND THE LOWEST TRADING POINT OF THE DAY THAT EASILY SIGNIFY ANOTHER RISE ON FRIDAY AT LEAST AT THE START. AFTER THE GAP UP OPEN THERE WERE HARDLY ANY TRADING OPPORTUNITY IN STOCKS TOO. FUTURES & OPTIONS REMAINED SUBDUED AFTER THE GAP UP OPEN AND ONLY CARRIED OVER POSITIONS COULD BOOK ANY PROFIT.
SINCE LAST 4 TRADING DAYS NIFTY HAS SUCCESSFULLY MANAGED TO CLOSE ABOVE THE CRITICAL 50 DMA WHICH IS A BULLISH SIGN THAT WILL BE CONFIRMED ON A DECISIVE CLOSE ABOVE THE 20 DMA AROUND 4545 LEVELS. THE RISE ON THURSDAY HAS GENERATED THE HOPES OF FURTHER REVIVAL IN THE MARKETS AS THE INDICATORS IN THE DAILY EOD CHARTS HAVE JUST STARTED TO LOOK UP AND ANOTHER UP MOVE ON FRIDAY CAN GENERATE THE HOPE OF A BULLISH COMING WEEK.
LAST WEEK ENDING 14TH AUGUST, NIFTY HAD A WEEKLY CLOSING AROUND 4580 LEVELS. SO, THERE IS EVERY POSSIBILITY OF A BOUNCE ON FRIDAY TO AT LEAST MOVE NEARER TO PREVIOUS WEEKS CLOSING LEVELS ALTHOUGH 4515 MAY BE A STRONG CLOSING RESISTANCE. IN THE INTRADAY CHART ABOVE, NIFTY FACES IMMEDIATE RESISTANCE AROUND 4494 LEVELS AND A DECISIVE CROSS OVER OF THIS CRITICAL LEVEL CAN CATAPULT IT TOWARDS 4525 TO 4535 LEVELS WHERE IT MEETS ANOTHER RESISTANCE LINE. IT HAS A STRONG SUPPORT AROUND 4444 TO 4440 LEVELS, A DECISIVE BREACH OF WHICH CAN SURELY WEAKEN NIFTY FOR ANOTHER INTRADAY PLUNGE. INTRADAY INDICATOR SLOW STOCHASTIC ALTHOUGH DROOPING DOWNWARDS BELOW THE 80% ZONE DUE TO THE LAST HOUR FALL IN NIFTY, HOWEVER WITH ANOTHER SHARP UP MOVE AT THE START IT MAY TAKE UPWARD TURN TO GIVE BULLISH INDICATION.
THE CHART PATTERN FORMED DURING LAST 5 TRADING DAYS HAS CERTAIN DISTINCT FEATURES. FIRSTLY IT HAS BEEN ABLE TO SUCCESSFULLY PROTECT THE CRITICAL SUPPORT AROUND 4350 LEVELS THUS MAKING IT A STRONG BOTTOM FOR REMAINING DAYS OF AUGUST. SECONDLY BETWEEN 18TH AND 20 AUGUST IT HAS MADE A SOME SORT OF W FORMATION WITH BREAK OUT LINE AROUND 4494 TO 4500 LEVELS. SO, A DECISIVE BREAK OUT WITH VOLUME ABOVE THE RESISTANCE LINE AT 4500 CAN EASILY TAKE NIFTY TOWARDS 4600+ LEVELS EVEN SURPASSING THE RESISTANCE LINE AT 4530. MOST LIKELY RELIANCE INDUSTRIES WHICH HAS BEEN TAKEN DOWN IN A WELL PLANNED & COORDINATED MANNER TO THREATEN ITS CRITICAL SUPPORT AT 1870, MAY BOUNCE UP WITH VIGOR & RENEWED VITALITY TO PROVIDE THAT REQUIRED IMPETUS TO NIFTY TO BREAK OUT OF 4500 LEVELS IF NOT THIS WEEK, CERTAINLY IT MAY COME TOWARDS LATER DAYS OF AUGUST MONTH MAY BE AFTER THE EXPIRY, THE DAYS TILL EXPIRY BEING RANGE BOUND TO HARASS THE OPTION BUYERS AND REWARD THE OPTION WRITERS.
FOR FRIDAYS TRADING, A DECISIVE DOWN SIDE BREACH OF 4440 MAY PLEASE THE BEARS TO SEE THE OPENING GAP OF THURSDAY GETTING FILLED TILL 4400 LEVELS AND A DECISIVE UPSIDE BREACH OF 4500 MAY PLEASE THE BULLS WHO CAN HOPE TO SEE 4535 TO 4550 LEVELS. A RANGE BOUND MOVE BETWEEN 444O TO 4500 MAY PLEASE THE OPTION WRITERS WHO DESPERATELY NEED MORE RANGE BOUND & FLAT MARKET TILL EXPIRY TO POCKET THE WRITTEN OPTION PREMIUM.
SINCE LAST 4 TRADING DAYS NIFTY HAS SUCCESSFULLY MANAGED TO CLOSE ABOVE THE CRITICAL 50 DMA WHICH IS A BULLISH SIGN THAT WILL BE CONFIRMED ON A DECISIVE CLOSE ABOVE THE 20 DMA AROUND 4545 LEVELS. THE RISE ON THURSDAY HAS GENERATED THE HOPES OF FURTHER REVIVAL IN THE MARKETS AS THE INDICATORS IN THE DAILY EOD CHARTS HAVE JUST STARTED TO LOOK UP AND ANOTHER UP MOVE ON FRIDAY CAN GENERATE THE HOPE OF A BULLISH COMING WEEK.
LAST WEEK ENDING 14TH AUGUST, NIFTY HAD A WEEKLY CLOSING AROUND 4580 LEVELS. SO, THERE IS EVERY POSSIBILITY OF A BOUNCE ON FRIDAY TO AT LEAST MOVE NEARER TO PREVIOUS WEEKS CLOSING LEVELS ALTHOUGH 4515 MAY BE A STRONG CLOSING RESISTANCE. IN THE INTRADAY CHART ABOVE, NIFTY FACES IMMEDIATE RESISTANCE AROUND 4494 LEVELS AND A DECISIVE CROSS OVER OF THIS CRITICAL LEVEL CAN CATAPULT IT TOWARDS 4525 TO 4535 LEVELS WHERE IT MEETS ANOTHER RESISTANCE LINE. IT HAS A STRONG SUPPORT AROUND 4444 TO 4440 LEVELS, A DECISIVE BREACH OF WHICH CAN SURELY WEAKEN NIFTY FOR ANOTHER INTRADAY PLUNGE. INTRADAY INDICATOR SLOW STOCHASTIC ALTHOUGH DROOPING DOWNWARDS BELOW THE 80% ZONE DUE TO THE LAST HOUR FALL IN NIFTY, HOWEVER WITH ANOTHER SHARP UP MOVE AT THE START IT MAY TAKE UPWARD TURN TO GIVE BULLISH INDICATION.
THE CHART PATTERN FORMED DURING LAST 5 TRADING DAYS HAS CERTAIN DISTINCT FEATURES. FIRSTLY IT HAS BEEN ABLE TO SUCCESSFULLY PROTECT THE CRITICAL SUPPORT AROUND 4350 LEVELS THUS MAKING IT A STRONG BOTTOM FOR REMAINING DAYS OF AUGUST. SECONDLY BETWEEN 18TH AND 20 AUGUST IT HAS MADE A SOME SORT OF W FORMATION WITH BREAK OUT LINE AROUND 4494 TO 4500 LEVELS. SO, A DECISIVE BREAK OUT WITH VOLUME ABOVE THE RESISTANCE LINE AT 4500 CAN EASILY TAKE NIFTY TOWARDS 4600+ LEVELS EVEN SURPASSING THE RESISTANCE LINE AT 4530. MOST LIKELY RELIANCE INDUSTRIES WHICH HAS BEEN TAKEN DOWN IN A WELL PLANNED & COORDINATED MANNER TO THREATEN ITS CRITICAL SUPPORT AT 1870, MAY BOUNCE UP WITH VIGOR & RENEWED VITALITY TO PROVIDE THAT REQUIRED IMPETUS TO NIFTY TO BREAK OUT OF 4500 LEVELS IF NOT THIS WEEK, CERTAINLY IT MAY COME TOWARDS LATER DAYS OF AUGUST MONTH MAY BE AFTER THE EXPIRY, THE DAYS TILL EXPIRY BEING RANGE BOUND TO HARASS THE OPTION BUYERS AND REWARD THE OPTION WRITERS.
FOR FRIDAYS TRADING, A DECISIVE DOWN SIDE BREACH OF 4440 MAY PLEASE THE BEARS TO SEE THE OPENING GAP OF THURSDAY GETTING FILLED TILL 4400 LEVELS AND A DECISIVE UPSIDE BREACH OF 4500 MAY PLEASE THE BULLS WHO CAN HOPE TO SEE 4535 TO 4550 LEVELS. A RANGE BOUND MOVE BETWEEN 444O TO 4500 MAY PLEASE THE OPTION WRITERS WHO DESPERATELY NEED MORE RANGE BOUND & FLAT MARKET TILL EXPIRY TO POCKET THE WRITTEN OPTION PREMIUM.
Thursday, August 20, 2009
Morning update at 8 am 20 aug 09
Dow which was indicating more than 80 points negative in futures during europeon trading hours was highly +ve last night to finally close at 61 points +ve. European markets were absolutely flat. Brazil was .7% up. Asian markets as expected have opened in the green & may remain +ve for the day having been deceived by dows highly negative futures yesterday. China, hong kong & singapore indices which had fallen a lot yesterday are likely to show good bounce.
For indian markets, expect a good opening & but the markets are again likely to be choppy and every stop loss if fed will be triggered. Nifty may find initial resistance around 4428 levels if successfully breached, then it can move up till 4455 or even 4477 levels. Yesterdays low around 4350 is a good support although nifty if it comes to this level, may slip a bit towards 4340 before bouncing back again. Traders may buy futures & calls around 4350 levels as well as boldly short 4200 puts if at all nifty reaches this level again. If nifty moves up & reaches wednesdays starting high of 4477 then quit longs and bought calls and buy puts here. Around this level also one can boldly write 4600 calls.
For indian markets, expect a good opening & but the markets are again likely to be choppy and every stop loss if fed will be triggered. Nifty may find initial resistance around 4428 levels if successfully breached, then it can move up till 4455 or even 4477 levels. Yesterdays low around 4350 is a good support although nifty if it comes to this level, may slip a bit towards 4340 before bouncing back again. Traders may buy futures & calls around 4350 levels as well as boldly short 4200 puts if at all nifty reaches this level again. If nifty moves up & reaches wednesdays starting high of 4477 then quit longs and bought calls and buy puts here. Around this level also one can boldly write 4600 calls.
Markets for 20 aug 09
Again the critical level at 4350 to 4360 was protected by nifty in spite of dow future remaining 85 points negative during trading hours of indian markets. Markets continued to slide from the start but were highly volatile during the second half of the day. Most likely the the support around 4350 will be held as asian markets are ready for a good bounce on thursday.
For trading on thursday, critical level at 4430 will play a major role and if nifty is able to cross that level and sustain above it, then a sharp up move towards 4480 to 4490 can be seen. However failure to cross and sustain above 4430 can again pull down nifty towards retest of critical make or break level at 4350. Most likely 4350 will be protected this week after a minor breach to liquidate weaker hands.
Although daily indicators continue to become weak day by day, if one has a look at the hourly chart above, slow stochastic has bounced up from the lower zone indicating some up move on thursday. A +ve divergence in it also adds strength to nifty. As per short term andrew pitch fork indicator marked in blue, nifty has taken support at the lower fork and is ready for a bounce towards the median line. So, with ok asian cues in the morning, one can see a good bounce in nifty at least at the start to try to cross 4430 levels after which only further movement can be decided. Chinese index having slipped badly is ripe for a bounce so also hong kong index. However a big fall & a decisive breach of the make or break support at 4350 can signal a much bigger fall for nifty towards 4320 and then sub 4300 levels towards 4229 which may perhaps come next week
FOR INTRADAY TRADING ON THURSDAY, NSE INDEX HAS A VERY STRONG SUPPORT AROUND 4375 A BREACH OF WHICH MAY BRING IT DOWN TO 4355 TO 4350 WHICH SHOULD AGAIN SEE A GOOD BOUNCE. ON THE HIGHER SIDE 4412 IS THE FIRST HURDLE NIFTY HAS TO CROSS IN ORDER TO MOVE UP TOWARDS THE CRITICAL LEVEL AROUND 4430 THAT MAY SEE SOLID SHORT COVERING TO TAKE NIFTY UP TOWARDS PIVOT AT 4442 SUSTAINING ABOVE WHICH ONLY CAN TAKE NIFTY FURTHER UP TOWARDS 4464 OR EVEN TOWARDS WEDNESDAYS HIGH OF 4477 THAT MAY SEE SOLID PROFIT BOOKING. HAVING BEEN DECEIVED BY DECEPTIVE DOW FUTURES ON WEDNESDAY, ASIAN MARKETS MAY BOUNCE BACK WITH VENGEANCE ON THURSDAY.
For trading on thursday, critical level at 4430 will play a major role and if nifty is able to cross that level and sustain above it, then a sharp up move towards 4480 to 4490 can be seen. However failure to cross and sustain above 4430 can again pull down nifty towards retest of critical make or break level at 4350. Most likely 4350 will be protected this week after a minor breach to liquidate weaker hands.
Although daily indicators continue to become weak day by day, if one has a look at the hourly chart above, slow stochastic has bounced up from the lower zone indicating some up move on thursday. A +ve divergence in it also adds strength to nifty. As per short term andrew pitch fork indicator marked in blue, nifty has taken support at the lower fork and is ready for a bounce towards the median line. So, with ok asian cues in the morning, one can see a good bounce in nifty at least at the start to try to cross 4430 levels after which only further movement can be decided. Chinese index having slipped badly is ripe for a bounce so also hong kong index. However a big fall & a decisive breach of the make or break support at 4350 can signal a much bigger fall for nifty towards 4320 and then sub 4300 levels towards 4229 which may perhaps come next week
FOR INTRADAY TRADING ON THURSDAY, NSE INDEX HAS A VERY STRONG SUPPORT AROUND 4375 A BREACH OF WHICH MAY BRING IT DOWN TO 4355 TO 4350 WHICH SHOULD AGAIN SEE A GOOD BOUNCE. ON THE HIGHER SIDE 4412 IS THE FIRST HURDLE NIFTY HAS TO CROSS IN ORDER TO MOVE UP TOWARDS THE CRITICAL LEVEL AROUND 4430 THAT MAY SEE SOLID SHORT COVERING TO TAKE NIFTY UP TOWARDS PIVOT AT 4442 SUSTAINING ABOVE WHICH ONLY CAN TAKE NIFTY FURTHER UP TOWARDS 4464 OR EVEN TOWARDS WEDNESDAYS HIGH OF 4477 THAT MAY SEE SOLID PROFIT BOOKING. HAVING BEEN DECEIVED BY DECEPTIVE DOW FUTURES ON WEDNESDAY, ASIAN MARKETS MAY BOUNCE BACK WITH VENGEANCE ON THURSDAY.
Wednesday, August 19, 2009
Reviewing the art of Short Selling
Reviewing the art of Short Selling
I know from experience and from reviewing many of the questions I get from TradingMarkets.com subscribers that many of you following my commentary and techniques have not been using our short-sale criteria diligently or properly. Investors should realize that so far this year our short-hedges have contributed half of our total profit -- and if we get new lows in the Nasdaq, Dow and S&P, I would expect shorts to make up the vast majority of our profits this year. For this reason, I want to review the criteria listed in my book, and in my 10-week trading course, with regards to short sales. I also want to cover how we adjust this strategy if a real bear market appears so that TradingMarkets.com subscribers are ready and able to pounce on the fast profits that shorts in a bear market can create.
Each week I comment on all stocks that meet our upfuel criteria and have broken out of valid 4+ week flags or cup-and-handles, as well as all stock that meet our downfuel criteria and have broken down out of valid 4+ week down-flags and down cup-and-handles. Let's review those criteria, which we use in all market environments. If you also need to review how we use breakouts to determine exact entry and exit, please review my 10-week trading course, free and available to all TradingMarkets.com subscribers. You may also want to review my book or Science of Trading courses, available via M. Gordon Publishing through TradingMarkets.com, to become more expert at implementing this strategy.
Criteria for finding short-sales with minimum downfuel:
1. Earnings: Either
(a) a decline in annual earnings and an estimate of either an annual loss or another decline in annual earnings, plus two down quarterly earnings or two negative quarterly earnings; or
(b) two quarterly earnings down 40% or more, or two negative quarterly earnings with acceleration in the decline; finally if either criteria "a" or "b" are met, the stock remains a short-sale candidate from an earnings criteria standpoint as long as quarterly earnings continue to be lower than year earlier quarters or continue negative. (For maximum fuel, either the above are met or a stock has two quarters in a row of declining earnings and declining sales, and a price/sales ratio (P/S) >10 and PE>S&P's PE.)
2. Runaway technical market characteristics down are displayed on the daily or weekly chart.
3. EPS and RS rank both <50.
4. Yield 5% or <. (For maximum fuel must = 0.)
5. Debt -- must have some, the more the better, over 100% ideal. (Max. Fuel >99.)
6. Funds -- must have some institutional ownership, >30% is optimum. (Max. Fuel >20.)
7. The worst or second-to-worst rating by Value Line, Zachs, or Lowry's rating services.
8. (Max. fuel only -- must be a clear bear market in stocks if stock is related to market -- according to Chartist, BCA, bond/bill/index rules, or PSL systems.)
9. (Max. fuel only -- forming or formed weekly or monthly pattern of Double Top, failed rally, or Head-and-Shoulders Top and P/S >10.)
This allows us considerably more flexibility to adjust our portfolio to the U.S. market. We can create a fully hedged fund -- or adjust our short positions to offset as much of our long U.S. exposure as the market environment dictates. As Julian Robertson said, "Our goal is to own the best companies and be short the worst companies." Over the last decade, our short criteria have helped us to: 1) determine when the U.S. market is starting to weaken as these stocks usually begin to accelerate down just before a broad market; 2) effectively hedge a broad decline as these stocks tend to under-perform our longs and the market during corrections in particular; 3) profit from a bear market, rather than be chewed up by it; 4) clean-up from a two-way market environment where some stocks are still moving up or down and others are moving consistently in the opposite direction, as usually develops during transition periods when the major trend is changing; and 5) get advance notice of when serious changes in the market are occurring (as we were able to take 1/3 profits on everything in early March of this year) because we're watching the action of both the weakest and strongest stocks in terms of their respective trends. Thus, while we do not recommend a fully hedged portfolio at all times, we do recommend covering part or all of your long exposure via shorts during times when the interest-rate environment is neutral - negative, when the U.S. technicals are poor, or when overvaluation is extreme enough that systemic market risk is unusually high, but an all-out bearish signal has not yet been given. Only when the U.S. and most global markets have generated universal bearish signals, would we become net short as part of our allocation strategy.
Like our longs, investors should use flag-down breakdowns of 4 weeks or more and valid cup-and-handle down breakdowns of 4 weeks or more as signals of when and where to short stocks meeting the above criteria. As you get more proficient at locating stocks that meet this criteria and then looking only for trades in stocks meeting these criteria and also breakdown out of valid patterns, you can refer to my weekly commentary to confirm that we're finding exactly the same stocks and that you're following the technique properly. In fact, that's what my weekly commentary is for -- it's designed to help those trying to utilize this specific technique to trade the markets. Many investors at first had questions as to why a stock they thought met the criteria wasn't included -- but as I've answered these questions over time most investors following this technique for many months studiously now understand that I am commenting on absolutely every stock that meets these rigid criteria and that an investor working hard on following this technique can have very nearly identical results as the ones reported in my weekly column. Over the first year-and-a-quarter or so, most criticism and commentary have come from traders who have not thoroughly studied my courses and this technique. So far, at least, I have not yet heard from or met a trader who has tried diligently to follow this methodology religiously who has not been very happy with his/her trading results.
We basically exit short stocks on: 1) Positive turnaround in earnings; 2) whenever their PE gets below their expected growth rate; 3) whenever they violate their 200 MA by 10% or more; 4) take half profits on 40% decline from entry and then begin using any high with six lower highs surrounding it as trailing stop; 5) on every new low use ops above correction high as trailing stop; 6) exit if Relative Strength rank or EPS rank ever move above 50 from below it; 7) on any weekly chart double bottom or head-and-shoulders bottom; 8) whenever the stock reacts positively to what should clearly be negative news, or on positive reaction to restructuring or new management.
Although the odds are now tilting toward the current (5/00) environment being a bear market, I am not solidly convinced that we are there yet. It would take new closing lows in the Nasdaq, S&P and Dow below their respective February-March lows before I will be fully convinced that we are in another leg down of an ongoing bear market. I would also like to see at least a week of consistent 20+ number of stocks on our Bottom RS/EPS New Lows list, and a much higher concentration of valid breakdowns in stocks on these new lows list. Similarly, I would like to see a large concentration of specific industries dominate the new lows lists. If we get all these factors coming together, than for the first time since 1994, investors will need to look for and allocate more capital to short selling.
The above "downfuel" criteria for finding short-hedges is valid in a bear market, as in a bull or sideways one. However, to maximize profit in a bear market (assuming all of the bear market factors mentioned above come to pass), traders should also look for major topping patterns in former leaders running out of gas, for about half of their short-sale exposure. As we get more of these patterns and more of our typical short-hedge exposure, investors should add about 7% of capital per new short trade and stop at about 24 positions. You basically let the market determine the number of shorts and longs by how many valid breakouts or breakdowns you get. Hold back on adding more than two new positions short or two new positions long in any one week. Theoretically, you could get to be 200% long or 200% short in an extremely strong or weak market. To find former leaders running out of bas, get our your Daily Graphs booklets or look at a huge number of stocks on a weekly-chart basis. Screen for stocks that are forming six month+ topping patterns such as Double Tops, Triple Tops, and Head-and-Shoulders Tops over a very long period of time. From this list of potential topping pattern stocks, look for over-valued equities with a P/S > 3 (ideally >10) and with a P/E much greater than the last year's earnings growth and much greater than the next year's projected earnings growth. Next, from this smaller list of potential shorts, look for stocks where earnings growth rates are slowing down. The big money is made shorting major chart breakdowns in stocks where expectations have been out of line with reality, that are starting to disappoint investors that held those out-of-line expectations. Only look for these stocks when you are very sure that we're in a bear market. We'll try to point out some such issues as examples, should we become convinced that a real bear market is in progress, in our weekly commentary in the weeks and months ahead.
Most traders have only looked at our long-side upfuel criteria and buy rules. Now is the time to review our short-hedge strategies and our aggressive short rules for bear markets. By using these strategies along with our long-side rules, investors can achieve smoother long-term returns, higher long-term gains, and more consistent profits in their stock trading accounts.
Morning update at 8 am 19 aug 09
As expected dow showed the upward corrective bounce of 82 points on tuesday before another big fall in coming days. But before the next big fall, there may be a day or two of confusing flat in dow. Following the dead cat bounce in us markets, european markets were up by nearly 1% with uk ftse up by .9%. Brazil up by 1%. Asian markets after a mild rise yesterday have opened mixed to +ve & may remain +ve initially to follow dow futures later in the day.
For indian markets, expect a flat to milder opening in line with asian markets. The trading range may be confined within 4480 to 4490 on the higher side and 4400 to 4375 on the lower side. A decisive breach above 4480 initially and then 4494, can take nifty to higher levels and on the down side most likely 4400 level will be protected if nse index maintains above 4424.in that case there is a possibility of a range bound flat to mildly bullish day..
With only 6 trading days before the expiry, option buyers should be extremely careful in order to avoid seeing their option value reaching 0 value by expiry. Avoid carry over of bought options, if things go wrong the option will lose value in a big way. Write (short) higher calls of 4600 on market rise and write 4200 puts on market declines and hold these shorted calls and shorted puts in case one has bought lower calls of 4500 and bought higher puts of 4400 or 4300.
For indian markets, expect a flat to milder opening in line with asian markets. The trading range may be confined within 4480 to 4490 on the higher side and 4400 to 4375 on the lower side. A decisive breach above 4480 initially and then 4494, can take nifty to higher levels and on the down side most likely 4400 level will be protected if nse index maintains above 4424.in that case there is a possibility of a range bound flat to mildly bullish day..
With only 6 trading days before the expiry, option buyers should be extremely careful in order to avoid seeing their option value reaching 0 value by expiry. Avoid carry over of bought options, if things go wrong the option will lose value in a big way. Write (short) higher calls of 4600 on market rise and write 4200 puts on market declines and hold these shorted calls and shorted puts in case one has bought lower calls of 4500 and bought higher puts of 4400 or 4300.
Markets for 19 aug 09
As expected, in spite of 186 point fall in dow overnight, asian markets as well as indian markets were less affected and showed resilience to move up remarkably with sensex gaining by 250 points and nifty up by 71 points. It looked as if the indices were moving with a vengeance and both sensex and nifty kept on moving up from the start itself as if a fresh up move has started. Well, how far this bounce can go is to be seen but certainly a decisive cross over of 4480 or more importantly 4492 can easily take nifty to much higher levels to cover the entire gap till 4560 levels.
From friday 14th aug high of 4613 till tuesdays low of 4375, nifty had fallen by 238 points . So a 38.2% upward retracement till 4466 has been covered on tuesday. A 50% upwards retracement can take it till 4494 level which nifty almost reached on tuesday by making a high of 4491.a 61.8% retracement may take nifty till 4522, if down side resumption of the fall does not start from wednesday. On tuesday nifty moved up above 50 dma at 4402 to close high above it at 4459. So on a down side move, the same 50 dma at 4402 should arrest further fall towards critical level of 4360 to 4350.besides bouncing back from 4357 on 12th august, nifty has managed to protect the level around 4360 twice this week also.
So the level of 4350 to 4360 may be a strong support before the expiry and option traders may write 4300 & 4200 puts on decline of nifty as well as boldly write 4600 and 4700 calls on every rise & hold these shorted calls and puts till expiry as long as 4350 is not breached on the down side and 20 dma around 4550 is not breached on the up side. Option buyers should be extremely cautious in holding out of the money bought option as these would get reduced to zero value faster with only 6 trading days left before the expiry. Quit early or short lower puts or short higher calls with the bought options. A decisive breach of these critical levels of 4350 & 4550 can see good move in the direction of breach. Resumption of the down side move in u.s & asian markets may threaten the critical nifty level at 4350. However, with such a big fall in dow on on monday night, one can easily expect a pause or up move in dow on tuesday that may see another bounce in asian markets on wednesday.
In spite of the 71 point up move in nifty on tuesday, the daily indicators still look weak and look dangerous for further falls. In the hourly chart above, slow stochastic is precariously placed at the verge of sliding down. However another good up move by nifty may see about turn in the indicator to move back into the upper zone to signify further up move.
FOR INTRADAY TRADING ON WEDNESDAY, EXPECT A MILDLY BULLISH OPENING. A CROSS OVER OF 4481 CAN TAKE NIFTY ABOVE 4500 LEVELS. THE INDEX HAS STRONG SUPPORT AROUND 4444 LEVELS A BREACH OF WHICH CAN TAKE IT DOWN TO 4424 LEVELS.
From friday 14th aug high of 4613 till tuesdays low of 4375, nifty had fallen by 238 points . So a 38.2% upward retracement till 4466 has been covered on tuesday. A 50% upwards retracement can take it till 4494 level which nifty almost reached on tuesday by making a high of 4491.a 61.8% retracement may take nifty till 4522, if down side resumption of the fall does not start from wednesday. On tuesday nifty moved up above 50 dma at 4402 to close high above it at 4459. So on a down side move, the same 50 dma at 4402 should arrest further fall towards critical level of 4360 to 4350.besides bouncing back from 4357 on 12th august, nifty has managed to protect the level around 4360 twice this week also.
So the level of 4350 to 4360 may be a strong support before the expiry and option traders may write 4300 & 4200 puts on decline of nifty as well as boldly write 4600 and 4700 calls on every rise & hold these shorted calls and puts till expiry as long as 4350 is not breached on the down side and 20 dma around 4550 is not breached on the up side. Option buyers should be extremely cautious in holding out of the money bought option as these would get reduced to zero value faster with only 6 trading days left before the expiry. Quit early or short lower puts or short higher calls with the bought options. A decisive breach of these critical levels of 4350 & 4550 can see good move in the direction of breach. Resumption of the down side move in u.s & asian markets may threaten the critical nifty level at 4350. However, with such a big fall in dow on on monday night, one can easily expect a pause or up move in dow on tuesday that may see another bounce in asian markets on wednesday.
In spite of the 71 point up move in nifty on tuesday, the daily indicators still look weak and look dangerous for further falls. In the hourly chart above, slow stochastic is precariously placed at the verge of sliding down. However another good up move by nifty may see about turn in the indicator to move back into the upper zone to signify further up move.
FOR INTRADAY TRADING ON WEDNESDAY, EXPECT A MILDLY BULLISH OPENING. A CROSS OVER OF 4481 CAN TAKE NIFTY ABOVE 4500 LEVELS. THE INDEX HAS STRONG SUPPORT AROUND 4444 LEVELS A BREACH OF WHICH CAN TAKE IT DOWN TO 4424 LEVELS.
Tuesday, August 18, 2009
Markets for 18 aug 09
Markets for 18 aug 09
the impact of heavy fall in asian markets that too with chinese markets falling by more than 6% saw indian markets crash to sub 4400 levels again threatening to re breach last wednesdays lows of 4360 . It looks as if chinese astrologers have got a hint of what is in store for the world markets in next couple of days. In fact they always act in advance. Now it looks as if the adverse planetary aspects have entangled u.s & other world markets completely that may continue to adversely impact world markets for next couple of days.
As per the daily eod chart above, nifty has again breached both 20 & 50 dmas which is not an encouraging sign for the near term. Another gap down fall below the critical level of 4350 levels can see nifty straight fall to 4229 or even lower levels. In case the support at 4350 breaks, it may give the confirmation signal that nifty is headed for the larger flat formation towards july 13 low of 3919.
On a decisive breach below 4350, nifty may fall to 50% fibonacci support at 4320 levels a decisive breach of which may take nifty towards 62% fibonacci levels of 4229 that will be the deciding point whether nifty can fall towards 3919 levels to complete the larger flat or bounce after the zigzag abc correction till 4310 or 4229 to see nifty resume its up move. In any case, most likely nifty should give a good rebound before another fall occurs. Important daily indicator slow stochastic is in a precarious position and another sharp fall in nifty will confirm the reversal of stochastic from present levels for a sharp fall. Other daily indicators like rsi, w%r & even adx trend indicator, have started to look extremely weak after mondays fall.
Generally it is seen that when asian & european markets fall badly due to highly negative dow futures which was 190 points down this after noon, after actual opening of u.s markets, dow generally changes gear to perform better the same night. So lets hope that dow lives up to its tradition that may bring cheers to asian as well as indian markets on tuesday morning. Actually indian markets & asian markets have discounted dows impending fall for monday night and have already corrected on monday in advance, hence one should not expect a bigger fall in indian markets on tuesday
the impact of heavy fall in asian markets that too with chinese markets falling by more than 6% saw indian markets crash to sub 4400 levels again threatening to re breach last wednesdays lows of 4360 . It looks as if chinese astrologers have got a hint of what is in store for the world markets in next couple of days. In fact they always act in advance. Now it looks as if the adverse planetary aspects have entangled u.s & other world markets completely that may continue to adversely impact world markets for next couple of days.
As per the daily eod chart above, nifty has again breached both 20 & 50 dmas which is not an encouraging sign for the near term. Another gap down fall below the critical level of 4350 levels can see nifty straight fall to 4229 or even lower levels. In case the support at 4350 breaks, it may give the confirmation signal that nifty is headed for the larger flat formation towards july 13 low of 3919.
On a decisive breach below 4350, nifty may fall to 50% fibonacci support at 4320 levels a decisive breach of which may take nifty towards 62% fibonacci levels of 4229 that will be the deciding point whether nifty can fall towards 3919 levels to complete the larger flat or bounce after the zigzag abc correction till 4310 or 4229 to see nifty resume its up move. In any case, most likely nifty should give a good rebound before another fall occurs. Important daily indicator slow stochastic is in a precarious position and another sharp fall in nifty will confirm the reversal of stochastic from present levels for a sharp fall. Other daily indicators like rsi, w%r & even adx trend indicator, have started to look extremely weak after mondays fall.
Generally it is seen that when asian & european markets fall badly due to highly negative dow futures which was 190 points down this after noon, after actual opening of u.s markets, dow generally changes gear to perform better the same night. So lets hope that dow lives up to its tradition that may bring cheers to asian as well as indian markets on tuesday morning. Actually indian markets & asian markets have discounted dows impending fall for monday night and have already corrected on monday in advance, hence one should not expect a bigger fall in indian markets on tuesday
Weekly trading range for week ending 21 august 09
Weekly trading range for week ending 21 august 09
the broad weekly range for nifty may be 4455 on the lower side and 4620 on the higher side. A decisive breach of 4455 and inability to sustain above it may pull down nifty to retest 4360 levels. Us markets now having been entangled by adverse planetary effects may fall that may induce nifty to fall towards sub 4400 levels again. On the higher side a decisive cross over of 4620 & a close above it only may catapult nifty towards 4731 levels.
the broad weekly range for nifty may be 4455 on the lower side and 4620 on the higher side. A decisive breach of 4455 and inability to sustain above it may pull down nifty to retest 4360 levels. Us markets now having been entangled by adverse planetary effects may fall that may induce nifty to fall towards sub 4400 levels again. On the higher side a decisive cross over of 4620 & a close above it only may catapult nifty towards 4731 levels.
Fibonacci levels for the week ending 21 august 09
Fibonacci levels for the week ending 21 august 09
the up wave from 13 july low of 3919 till 4th aug high of 4731 covered a total distance of 812 points. So various fibonacci levels nifty can retrace down are 38.2% till 4420, 50% till 4319 and 61.8% to as low as 4229 levels.
Confining to the present rise of nifty from 12th aug low of 4360 till the friday high of 4619, nifty has covered a distance of 259 pints. So in case of a fall, nifty may retrace to 38.2% level of 4520, 50% level of 4488 & 62% level of 4459.
the up wave from 13 july low of 3919 till 4th aug high of 4731 covered a total distance of 812 points. So various fibonacci levels nifty can retrace down are 38.2% till 4420, 50% till 4319 and 61.8% to as low as 4229 levels.
Confining to the present rise of nifty from 12th aug low of 4360 till the friday high of 4619, nifty has covered a distance of 259 pints. So in case of a fall, nifty may retrace to 38.2% level of 4520, 50% level of 4488 & 62% level of 4459.
Elliott wave count for week ending 21 august 09
Elliott wave count for week ending 21 august 09
we have assumed that fresh bull move had started from 6th march low of 2539. The 1st up wave was completed on 12 june high of 4693.the 2nd wave a,b,c correction came down till 13 july low of 3919. The 3rd up wave started from the low of 3919 and on 4th august the 1st sub wave of this 3rd wave was completed with the highs around 4731 and the 2nd sub wave abc downward correction started. Most likely this 2nd down sub wave abc correction has been completed on wednesday 12 aug lows of 4360 and the 3rd sub wave of the mega 3rd up wave has started with a green hammer from the lows of 4360 levels. However there are possibilities that the 2nd sub wave is not yet complete and can again come down towards 50% retracement till 4325 or 62% retracement till 4229. A down side breach and close below 4520 followed by a fall to close below 4400 & then a decisive close below 4337 can confirm that nifty can retrace down till 4229. On the higher side a close above 4606 followed by a decisive close above 4711 can confirm that nifty is in the 3rd sub wave of the mega 3rd up wave to move towards 5000+ levels in short term.
There could be another case, where the new bull market after the completion of the 1st up wave at the 12th june high of 4693, the 2nd corrective wave is still on as a 3, 3, 5 bigger flat with 1st set of 3 down waves completed at the 13th july low of 3919, the 2nd set of 3 up waves completed on 4th aug high of 4731 & presently we are in the final 5 down leg of this flat that can go down all the way till 13th july lows of 3919 before start of the mega 3rd up wave. However the thing to be kept in mind is that as per elliott wave theory, 2nd corrective wave is generally in the form of abc zigzag as per paragraph above & the 4th corrective wave is generally a flat.
we have assumed that fresh bull move had started from 6th march low of 2539. The 1st up wave was completed on 12 june high of 4693.the 2nd wave a,b,c correction came down till 13 july low of 3919. The 3rd up wave started from the low of 3919 and on 4th august the 1st sub wave of this 3rd wave was completed with the highs around 4731 and the 2nd sub wave abc downward correction started. Most likely this 2nd down sub wave abc correction has been completed on wednesday 12 aug lows of 4360 and the 3rd sub wave of the mega 3rd up wave has started with a green hammer from the lows of 4360 levels. However there are possibilities that the 2nd sub wave is not yet complete and can again come down towards 50% retracement till 4325 or 62% retracement till 4229. A down side breach and close below 4520 followed by a fall to close below 4400 & then a decisive close below 4337 can confirm that nifty can retrace down till 4229. On the higher side a close above 4606 followed by a decisive close above 4711 can confirm that nifty is in the 3rd sub wave of the mega 3rd up wave to move towards 5000+ levels in short term.
There could be another case, where the new bull market after the completion of the 1st up wave at the 12th june high of 4693, the 2nd corrective wave is still on as a 3, 3, 5 bigger flat with 1st set of 3 down waves completed at the 13th july low of 3919, the 2nd set of 3 up waves completed on 4th aug high of 4731 & presently we are in the final 5 down leg of this flat that can go down all the way till 13th july lows of 3919 before start of the mega 3rd up wave. However the thing to be kept in mind is that as per elliott wave theory, 2nd corrective wave is generally in the form of abc zigzag as per paragraph above & the 4th corrective wave is generally a flat.
Weekly technicals for week ending 21 august 09
Weekly technicals for week ending 21 august 09
the indicators in the monthly charts continue to generate bullish signals. Monthly rsi having moved up to 57 levels is signaling further up move. The strongest monthly signal being 8 month moving average coming from below 13 month moving average to cross it to move above it, is the strongest long term bullish signal which is occurring first time after sept 04.all in all markets are looking extremely bullish for the long term.
In the weekly charts, the weekly indicators are not giving decisive bullish signals. Weekly slow stochastic although in the upper 80% zone looks shaky. Weekly rsi at 64 has to move up again above 70 levels to signal mega bullish signal towards 4800 + levels. Weekly macd although in the bullish zone, does not look progressive. Weekly roc at 0 value has all the potential to shoot up if indices move up from here. However amidst these dull weekly signals from the weekly indicators, the weekly moving averages depict highly bullish signals.20 week moving average at 4090 having breached 34 wma at 3575, has breached 50 wma at 3478 & 200 wma at 3929. Further strength comes from the cross over of long term exponential moving averages where 50 week exponential average now at 3872 has decisively crossed 200 wema at 3681 & moving to breach 100 wema now at 3912. These cross overs are taking place for the first time after june 2003 around which time the previous bull market had started. So long term investors should boldly accumulate on every decline for excellent gains over the long term.
In the daily charts, the green hammer on wednesday, followed by the gap up on thursday forming a big green marubozu generally indicates a break away formation which can occur after the current flat that started on friday gets over around coming tuesday. Daily slow stochastic indicates further up move. Daily rsi at 56 & daily roc at -1 look deceptive. Daily macd also looks neutral. Confluence of 8,13 & 20 dma between 4540 to 4570 indicates that nifty has to decisively cross on a closing basis either 4575 to move up or 4540 to slip down. However 50 dma at 4410 far above 100 dma at 4040 & both of these above the 200 dma at 3434 makes medium term out look pretty bullish also & all these 3 moving averages turning upwards confirms the bullish outlook in the medium term. Short term andrews pitchfork indicates nifty to have strong support around the median line around 4540 to 4550 levels & only a decisive breach of this median line can bring nifty towards the lower fork around 4477 levels. A bounce back after retesting the median line around 4550 can again take nifty towards upper fork around 4600 levels to pierce it to move towards 4660 to 4700 levels.
So overall expect a flat to mildly weaker first half of the week to be followed by bullish days. Nifty needs to decisively cross 4620 to close above it to move towards new highs of 4731 levels and a decisive breach of 4540 can take it down towards 4477 support levels. World markets will play a major role in influencing the movements of indian markets during the week.
the indicators in the monthly charts continue to generate bullish signals. Monthly rsi having moved up to 57 levels is signaling further up move. The strongest monthly signal being 8 month moving average coming from below 13 month moving average to cross it to move above it, is the strongest long term bullish signal which is occurring first time after sept 04.all in all markets are looking extremely bullish for the long term.
In the weekly charts, the weekly indicators are not giving decisive bullish signals. Weekly slow stochastic although in the upper 80% zone looks shaky. Weekly rsi at 64 has to move up again above 70 levels to signal mega bullish signal towards 4800 + levels. Weekly macd although in the bullish zone, does not look progressive. Weekly roc at 0 value has all the potential to shoot up if indices move up from here. However amidst these dull weekly signals from the weekly indicators, the weekly moving averages depict highly bullish signals.20 week moving average at 4090 having breached 34 wma at 3575, has breached 50 wma at 3478 & 200 wma at 3929. Further strength comes from the cross over of long term exponential moving averages where 50 week exponential average now at 3872 has decisively crossed 200 wema at 3681 & moving to breach 100 wema now at 3912. These cross overs are taking place for the first time after june 2003 around which time the previous bull market had started. So long term investors should boldly accumulate on every decline for excellent gains over the long term.
In the daily charts, the green hammer on wednesday, followed by the gap up on thursday forming a big green marubozu generally indicates a break away formation which can occur after the current flat that started on friday gets over around coming tuesday. Daily slow stochastic indicates further up move. Daily rsi at 56 & daily roc at -1 look deceptive. Daily macd also looks neutral. Confluence of 8,13 & 20 dma between 4540 to 4570 indicates that nifty has to decisively cross on a closing basis either 4575 to move up or 4540 to slip down. However 50 dma at 4410 far above 100 dma at 4040 & both of these above the 200 dma at 3434 makes medium term out look pretty bullish also & all these 3 moving averages turning upwards confirms the bullish outlook in the medium term. Short term andrews pitchfork indicates nifty to have strong support around the median line around 4540 to 4550 levels & only a decisive breach of this median line can bring nifty towards the lower fork around 4477 levels. A bounce back after retesting the median line around 4550 can again take nifty towards upper fork around 4600 levels to pierce it to move towards 4660 to 4700 levels.
So overall expect a flat to mildly weaker first half of the week to be followed by bullish days. Nifty needs to decisively cross 4620 to close above it to move towards new highs of 4731 levels and a decisive breach of 4540 can take it down towards 4477 support levels. World markets will play a major role in influencing the movements of indian markets during the week.
Weekly markets analysis for week ending 21 august 09
Weekly markets analysis for week ending 21 august 09
finally the 2nd week of august ended following 2 massive falls on the previous thursday & friday. At one time it generated the fear that nifty may straight head towards 13th july low of 3919 as part of the larger flat formation when operators on wednesday pulled nifty down to fall below critical support at 4380 to even touch 4360.well that was it, the bulls who were silent observers till 4360 came back with a bang and hammered the bears out of shape by forming the great copy book hammer that catapulted nifty to 4610 levels very next day on thursday. Friday followed up with a routine range bound flat that may continue till monday.
Although the week ended on a +ve note compared to its previous week, yet niftys weekly high of 4619 could not cross the previous weeks high of 4731 and at the same time breached previous weeks lows of 4464 to fall till 4360, finally rising to close at 4580 higher than previous weeks closing of 4481. So unless nifty moves up further from present levels to cross august 1st weeks high of 4731, nifty may rot within the 100 point range of 4620 to 4522 till such time a break out or break down takes place for a bigger move in the direction of breach. An upside decisive break out of 4620 with good volume can pierce through the previous weeks 6th aug intraday 3 black crows, to new highs above 4731 & a decisive breach of 4520 on the down side can see a stone like fall to cover the entire gap following the hammer of 12th aug till 4444 magic levels.
Another interesting feature to be noted is that, indian markets are lagging much behind other world markets when compared with weekly closings. This weeks closing of sensex & nifty were much lower than highs of june and july 09. All most all the indices of the world had this weeks closings higher than highs of both june and july 09.us, brazil, entire europe & australian indices had this weeks closings higher than june & july highs. Even japan, korea and hong kong too had a closing higher than both june & july highs. Even china after such massive falls closed above june highs so was with singapore. Sensex and nifty which closed the week at 15411 & 4580 are still much lower than june highs of 15600 & 4693 & july highs of 15732 & 4670.so seeing these facts & figures & comparing with those of other world markets, unless the things really turn pretty bad , there is every possibility of indian markets shooting up towards 2nd half of the coming week to breach june & july highs to move towards much higher levels. The effects of scanty rain fall and bird flu have been fully digested by the markets & there are signs of much improvements in this regard. However, the adverse astrological impact which the us markets will be grappling with during the coming week may be the only dampener during the week ahead to stall any speedy progress in indian markets.
finally the 2nd week of august ended following 2 massive falls on the previous thursday & friday. At one time it generated the fear that nifty may straight head towards 13th july low of 3919 as part of the larger flat formation when operators on wednesday pulled nifty down to fall below critical support at 4380 to even touch 4360.well that was it, the bulls who were silent observers till 4360 came back with a bang and hammered the bears out of shape by forming the great copy book hammer that catapulted nifty to 4610 levels very next day on thursday. Friday followed up with a routine range bound flat that may continue till monday.
Although the week ended on a +ve note compared to its previous week, yet niftys weekly high of 4619 could not cross the previous weeks high of 4731 and at the same time breached previous weeks lows of 4464 to fall till 4360, finally rising to close at 4580 higher than previous weeks closing of 4481. So unless nifty moves up further from present levels to cross august 1st weeks high of 4731, nifty may rot within the 100 point range of 4620 to 4522 till such time a break out or break down takes place for a bigger move in the direction of breach. An upside decisive break out of 4620 with good volume can pierce through the previous weeks 6th aug intraday 3 black crows, to new highs above 4731 & a decisive breach of 4520 on the down side can see a stone like fall to cover the entire gap following the hammer of 12th aug till 4444 magic levels.
Another interesting feature to be noted is that, indian markets are lagging much behind other world markets when compared with weekly closings. This weeks closing of sensex & nifty were much lower than highs of june and july 09. All most all the indices of the world had this weeks closings higher than highs of both june and july 09.us, brazil, entire europe & australian indices had this weeks closings higher than june & july highs. Even japan, korea and hong kong too had a closing higher than both june & july highs. Even china after such massive falls closed above june highs so was with singapore. Sensex and nifty which closed the week at 15411 & 4580 are still much lower than june highs of 15600 & 4693 & july highs of 15732 & 4670.so seeing these facts & figures & comparing with those of other world markets, unless the things really turn pretty bad , there is every possibility of indian markets shooting up towards 2nd half of the coming week to breach june & july highs to move towards much higher levels. The effects of scanty rain fall and bird flu have been fully digested by the markets & there are signs of much improvements in this regard. However, the adverse astrological impact which the us markets will be grappling with during the coming week may be the only dampener during the week ahead to stall any speedy progress in indian markets.
Tuesday, August 11, 2009
Morning update on 11 aug 09
Last night dow closed 32 points in the red however s&p500 still maintained it self above the critical 1000 mark. European markets closed flat to mildly weak with uk ftse closing mildly down by .2%. Brazil was up by .9%.asian markets have opened flat to mildly weak and may remain weak to mixed for the day.
For indian markets, one should generally expect a bounce as the indices had closed near the lowest point of the day near the 50 dma yesterday. Nifty may be confined to the trading range of 4510 pivot levels on the up side and 4480 to 4390 support levels on the down side.50 day moving average around 4400 levels which nifty touched yesterday should also provide support & in case nifty goes below it, nifty may be pulled up towards this 50 dma by end of the day. Similarly if nifty goes far above it towards 20 dma at 4500 levels, to sustain above it and the pivot at 4512, then it can move up till 4550 levels. A decisive close above 4515 may bring some hopes of further up move on wednesday if rain gods are kind enough.
Traders may like to trade on the +ve side of the market today. In case nifty approaches towards 4400 or even 4380, traders may buy 4500 calls and futures for intraday gains. As the markets are already looking oversold, traders may look for the intraday fall to buy & should book early profits at own level of comfort & re enter at lower levels instead of waiting for resistance levels to book profits. Long term investors must make full use of this type of falls to quietly accumulate without bothering for the shorting interest of intraday traders.
Hyderabad is having good rains this morning & we hope rain gods are kind enough to follow it up for other parts of the country from today onwards.
For indian markets, one should generally expect a bounce as the indices had closed near the lowest point of the day near the 50 dma yesterday. Nifty may be confined to the trading range of 4510 pivot levels on the up side and 4480 to 4390 support levels on the down side.50 day moving average around 4400 levels which nifty touched yesterday should also provide support & in case nifty goes below it, nifty may be pulled up towards this 50 dma by end of the day. Similarly if nifty goes far above it towards 20 dma at 4500 levels, to sustain above it and the pivot at 4512, then it can move up till 4550 levels. A decisive close above 4515 may bring some hopes of further up move on wednesday if rain gods are kind enough.
Traders may like to trade on the +ve side of the market today. In case nifty approaches towards 4400 or even 4380, traders may buy 4500 calls and futures for intraday gains. As the markets are already looking oversold, traders may look for the intraday fall to buy & should book early profits at own level of comfort & re enter at lower levels instead of waiting for resistance levels to book profits. Long term investors must make full use of this type of falls to quietly accumulate without bothering for the shorting interest of intraday traders.
Hyderabad is having good rains this morning & we hope rain gods are kind enough to follow it up for other parts of the country from today onwards.
Markets for 11 aug 09
Slowly & steadily nifty is making its way towards the critical level of 4380 which for sure will be breached to induce a bearish sentiment all around which will quickly liquidate weaker hands and after that only nifty will move up. On monday nifty breached the critical level at 29th july low of 4420 and went down till 4400 to close on an averaging basis at 4438. But interestingly, cleaner index the sensex did not breach july 29th lows of 14888 and could fall only till 14902. Perhaps tuesday may see sensex weaker than nifty . But one thing is certain that if sensex and sensex only breaches 22 july lows of 14787 and closes below it, then one can safely assume that the markets are forming a bigger corrective flat and there is every probability of sensex and nifty testing july lows of 13210 & 3919 before the end of august.
Harassing news on likely hood of draught in certain parts of the country coupled with swine flu cases occupying maximum time of financial news channels can easily take the markets in the desired direction of these financial news channels in coming days. This together with the planets in the heavens adding their quota of misery forces one to ruthlessly short on every rise of the market. The shorting mood was so ferocious that even a gap up open on monday morning could not survive for more than a few seconds and the end of the day looked as if the bulls were mercilessly hammered out of shape by the bears.
For trading on tuesday, the markets may show a well deserved bounce or at least a pause after the 3 black crows formation in daily eod candle charts. Nifty although may not decisively breach 4380, liquidation of weaker hands may commence from 4400 downwards. With kindness of rain gods, nifty may move up to find initial resistance around 4452 to 4464 levels. Only a decisive breach and sustaining above 4464 can bring back the whipped away bulls to laboriously pull nifty towards 4500 or 4512 pivot levels to hand it over to the bears again. Not withstanding this aspect of bearishness , the markets are highly oversold and may show a sharp bounce any time.
Harassing news on likely hood of draught in certain parts of the country coupled with swine flu cases occupying maximum time of financial news channels can easily take the markets in the desired direction of these financial news channels in coming days. This together with the planets in the heavens adding their quota of misery forces one to ruthlessly short on every rise of the market. The shorting mood was so ferocious that even a gap up open on monday morning could not survive for more than a few seconds and the end of the day looked as if the bulls were mercilessly hammered out of shape by the bears.
For trading on tuesday, the markets may show a well deserved bounce or at least a pause after the 3 black crows formation in daily eod candle charts. Nifty although may not decisively breach 4380, liquidation of weaker hands may commence from 4400 downwards. With kindness of rain gods, nifty may move up to find initial resistance around 4452 to 4464 levels. Only a decisive breach and sustaining above 4464 can bring back the whipped away bulls to laboriously pull nifty towards 4500 or 4512 pivot levels to hand it over to the bears again. Not withstanding this aspect of bearishness , the markets are highly oversold and may show a sharp bounce any time.
Monday, August 10, 2009
Morning update on 10 aug 09
US markets were highly bullish on friday. Dow was 113 points up after correcting from a 175 up during the day. S&p500 regained its supremacy above the 1000 mark & nasdaq also closed above 2000 mark. Brazil was up by more than 1%.european markets were up by 1% to 1.5% with uk ftse being subdued with only a .8% rise. Asian markets have opened strongly & may continue to maintain strength. However some indices of korea, china & taiwan may find pressure in moving up faster.
For indian markets, having fallen so much during the last 2 days when most of the other world markets were rising, one can expect a strong gap up opening around the or higher than initial critical level of 4515. Short covering from here on can take nifty towards the next resistance of 4558 or even 4580 levels where selling pressure is likely to mount. However moving up & sustaining above 4606 can see the emergence of bulls & further short covering by bears .
For intraday trading, traders may continue to hold both calls & puts and around the level of 4600 may reduce the calls or write higher calls by holding on to lower calls. As markets correct downwards, traders may hold higher puts but short lower puts to carry along with bought higher puts. Carry over of un hedged long future position should be avoided. Long term investors should make use of every fall to quietly accumulate stocks in the sectors of pharma , fmcg & other sectors like tech, oil & gas, cement for good gains in the medium to long term.
For indian markets, having fallen so much during the last 2 days when most of the other world markets were rising, one can expect a strong gap up opening around the or higher than initial critical level of 4515. Short covering from here on can take nifty towards the next resistance of 4558 or even 4580 levels where selling pressure is likely to mount. However moving up & sustaining above 4606 can see the emergence of bulls & further short covering by bears .
For intraday trading, traders may continue to hold both calls & puts and around the level of 4600 may reduce the calls or write higher calls by holding on to lower calls. As markets correct downwards, traders may hold higher puts but short lower puts to carry along with bought higher puts. Carry over of un hedged long future position should be avoided. Long term investors should make use of every fall to quietly accumulate stocks in the sectors of pharma , fmcg & other sectors like tech, oil & gas, cement for good gains in the medium to long term.
Markets for 10 aug 09
The new week opens at the back drop of massive falls on thursday & friday that had generated the fears in the minds of traders that if the last swing low of 4420 is breached then nifty can fall like a stone to its previous swing low of 4380 which is the make or break pont for the bulls. Over emphasis on poor rain falls last week and 4 suspected death cases from swine flu out of a population of 120 crores, makes traders to seriously think whether to laugh or go along with the news channels to continue shorting the markets on every rise.
Well, the 2 days of well coordinated falls in the markets have definitely dented the very short term out look that can only be repaired if nifty rises to close above 4600 levels. Although a good rise in us markets on friday night to be followed up by asian markets may mitigate the bearish out look on indian markets for some time, yet unless nifty rises to close above 4600 levels, chances of a sustained recovery looks bleak & every rise may meet with ruthless shorting till such time nifty is made to fall below the critical level of 4380 to induce a bearish feeling to liquidate balance of the weaker hands.
For intraday trading on monday, even a rise in nifty to sustain above 4525 can bring some hopes for the trapped bulls because sustaining above 4525 can take nifty towards 4557. A follow up buying above 4557 can take nifty towards 4580 levels to again encounter shorting pressure, as a 100 point rise under such bearish condition looks to be a bit too much under the present circumstances although short covering by the bears can take nifty towards the 4600 levels but sustaining above it seems to be highly ambitious for the bulls who would prefer to liquidate their longs to wait for the alarming news on rains as well as swine flu to die down as had happened in june.
ON THE DOWN SIDE PATH OF LEAST RESISTANCE, NIFTY MAY FIND INITIAL SUPPORT AROUND FRIDAYS LOWS OF 4464 TO GENERATE A FALSE HOPE AS IF A TEMPORARY BOTTOM IS ESTABLISHED ONLY TO SLIDE LATER TOWARDS 4444 TO 4433 A BREACH OF WHICH CAN QUICKLY TAKE NIFTY TOWARDS THE INTRADAY DECIDING POINT OF 4420 WHERE THE BEARS WOULD LIKE TO POCKET WHATEVER PROFIT THEY MAY GET AS THIS IS A POINT WHERE BULLS MAY AGAIN SPRING INTO ACTION AS HAD HAPPENED ON 29TH JULY WHEN ALL BEARS WERE CAUGHT NAPPING.
AS PER HOURLY CHART ABOVE, MARKETS LOOK OVERSOLD AND IMPORTANT HOURLY INDICATOR IS GENERATING A FEEBLE +VE DIVERGENCE WHEN THE PRICE WAS MAKING NEW LOWS BUT THE STOCHASTIC INDICATOR WAS NOT MAKING A NEW LOW AND IS ABOUT TO COME OUT OF THE LOWER ZONE THAT SHOULD GENERATE SOME INITIAL UPWARD MOVEMENT. HOWEVER FAILURE TO MOVE HIGHER THAN 4525 AND SUSTAIN ABOVE IT CAN AGAIN WEAKEN NIFTY AS WELL AS THE STOCHASTIC INDICATOR.
Well, the 2 days of well coordinated falls in the markets have definitely dented the very short term out look that can only be repaired if nifty rises to close above 4600 levels. Although a good rise in us markets on friday night to be followed up by asian markets may mitigate the bearish out look on indian markets for some time, yet unless nifty rises to close above 4600 levels, chances of a sustained recovery looks bleak & every rise may meet with ruthless shorting till such time nifty is made to fall below the critical level of 4380 to induce a bearish feeling to liquidate balance of the weaker hands.
For intraday trading on monday, even a rise in nifty to sustain above 4525 can bring some hopes for the trapped bulls because sustaining above 4525 can take nifty towards 4557. A follow up buying above 4557 can take nifty towards 4580 levels to again encounter shorting pressure, as a 100 point rise under such bearish condition looks to be a bit too much under the present circumstances although short covering by the bears can take nifty towards the 4600 levels but sustaining above it seems to be highly ambitious for the bulls who would prefer to liquidate their longs to wait for the alarming news on rains as well as swine flu to die down as had happened in june.
ON THE DOWN SIDE PATH OF LEAST RESISTANCE, NIFTY MAY FIND INITIAL SUPPORT AROUND FRIDAYS LOWS OF 4464 TO GENERATE A FALSE HOPE AS IF A TEMPORARY BOTTOM IS ESTABLISHED ONLY TO SLIDE LATER TOWARDS 4444 TO 4433 A BREACH OF WHICH CAN QUICKLY TAKE NIFTY TOWARDS THE INTRADAY DECIDING POINT OF 4420 WHERE THE BEARS WOULD LIKE TO POCKET WHATEVER PROFIT THEY MAY GET AS THIS IS A POINT WHERE BULLS MAY AGAIN SPRING INTO ACTION AS HAD HAPPENED ON 29TH JULY WHEN ALL BEARS WERE CAUGHT NAPPING.
AS PER HOURLY CHART ABOVE, MARKETS LOOK OVERSOLD AND IMPORTANT HOURLY INDICATOR IS GENERATING A FEEBLE +VE DIVERGENCE WHEN THE PRICE WAS MAKING NEW LOWS BUT THE STOCHASTIC INDICATOR WAS NOT MAKING A NEW LOW AND IS ABOUT TO COME OUT OF THE LOWER ZONE THAT SHOULD GENERATE SOME INITIAL UPWARD MOVEMENT. HOWEVER FAILURE TO MOVE HIGHER THAN 4525 AND SUSTAIN ABOVE IT CAN AGAIN WEAKEN NIFTY AS WELL AS THE STOCHASTIC INDICATOR.
Weekly trading range for week ending 14 august 09
The broad weekly trading range for nse index during the week could be 4646 on the higher side and 4303 on the lower side. Even if nifty manages to cross 4606 during the the week, it would be considered a glorious effort by the injured bulls, similarly on the down side, if nifty breaches the critical level of 4380 & closes below it, then bulls may like to convert themselves into bears to join hands to take nifty all the way towards the magic level of 4222.
So critical levels nifty must cross and close above for early resumption of the bull run is 4606 and the critical levels bears must try their best to breach & close below to throw a grand bear party is the level of 4380, a close below which will certainly make the bulls to run for early cover.
So critical levels nifty must cross and close above for early resumption of the bull run is 4606 and the critical levels bears must try their best to breach & close below to throw a grand bear party is the level of 4380, a close below which will certainly make the bulls to run for early cover.
Fibonacci levels for the week ending 14 august 09
The up wave from 13 july low of 3919 till 4th aug high of 4731 covered a total distance of 812 points. So various fibonacci levels nifty can retrace down are 38.2% till 4420, 50% till 4319 and 61.8% to as low as 4229 levels. Suppose the rain gods become sympathetic towards the bulls & further fall from fridays lows of 4464 does not take place from this 33% downward retracement, then taking 4731 highs & 4464 lows a fall of 267 points, nifty can retrace upwards firstly by 38.2% to 4566,then 50% till 4598 and finally 61.8% till 4629 levels. In any case even a decisive close above 4600 levels may signal that bull move has resumed.
Elliott wave count for week ending 14 august 09
We have assumed that fresh bull move had started from 6th march low of 2539. The 1st up wave was completed on 12 june high of 4693.the 2nd wave a,b,c correction came down till 13 july low of 3919. The 3rd up wave started from the low of 3919 and on 4th august the 1st sub wave of this 3rd wave was completed with the highs around 4731 and the 2nd sub wave abc downward correction started. Most likely this 2nd down sub wave abc correction at the worst case can come down till as low as 4229 levels to start the largest up wave of this current bull market the 3rd sub wave of the 3rd wave. However there are possibilities that this 2nd wave zigzag may be terminated around 4325 or at the best around around 4420.
There could be another case, where the new bull market after the completion of the 1st up wave at the 12th june high of 4693, the 2nd corrective wave is still on as a 3, 3, 5 bigger flat with 1st set of 3 down waves completed at the 13th july low of 3919, the 2nd set of 3 up waves completed on 4th aug high of 4731 & presently we are in the final 5 down leg of this flat that can go down all the way till 13th july lows of 3919 before start of the mega 3rd up wave. However the thing to be kept in mind is that as per elliott wave theory, 2nd corrective wave is generally in the form of abc zigzag as per paragraph above & the 4th corrective wave is generally a flat.
There could be another case, where the new bull market after the completion of the 1st up wave at the 12th june high of 4693, the 2nd corrective wave is still on as a 3, 3, 5 bigger flat with 1st set of 3 down waves completed at the 13th july low of 3919, the 2nd set of 3 up waves completed on 4th aug high of 4731 & presently we are in the final 5 down leg of this flat that can go down all the way till 13th july lows of 3919 before start of the mega 3rd up wave. However the thing to be kept in mind is that as per elliott wave theory, 2nd corrective wave is generally in the form of abc zigzag as per paragraph above & the 4th corrective wave is generally a flat.
Weekly markets analysis for week ending 14 august 09
Although last week saw nifty cross the psychological level of 4700, it could not sustain above it & the last 2 days saw massive correction to fall from the weekly high of 4731 to week end low of 4464 to finally close at 4481 just above the critical 4477 support level. The fall was induced by met wizards who said that although july had a 95% of rain fall, august 1st week had 65% less rain fall. (oh, what a comparison? & next time dont be surprised to find a day wise comparison of rain fall with a day of this year to the same day of last year) this coupled with time & again repetition of the same, by some interested news channels who presumably had shorting interest, saw markets crashing by 254 points in nifty in just 2 days from thursday highs of 4718 to fridays lows of 4464.
Although the correction was due, but the lightening speed surprised many, as there were not much of fii selling nor internal fund selling & it was much of retail liquidation out of fear. This more than 5% fall in just 2 trading days brought down nifty on a week on week closing basis to close down by 3.3% compared to its previous week ending 31 july. So one can safely say that nifty took a well deserved pause after 3 consecutive weeks of mega rise from 13 july low of 3919 to 4th aug high of 4731.with this weeks closing, indian markets have under performed compared to rest of the world markets.
Comparing with previous weeks close, as per closings of all the indices on this fridays close, in us markets, dow had a 2% rise & had a consecutive 4th week of rise, s&p500 performed much better having closed above 1000 mark. European markets had a consecutive 4th week of rise, australia, brazil too had a consecutive 4th week of rise, among asian indices, japan had a consecutive 4th week of rise. Singapore after 4 weeks of rise corrected this week. Korea surprisingly had a 7th consecutive weekly rise. China after 7 consecutive weeks of rise, fell during this week, so also taiwan after 6 consecutive weeks of rise had a fall this week. It was only hong kong which like indian indices had a weekly fall after 3 mega weeks of rise but in case of hong kong the weekly fall was less than even 1%.so, indian markets having under performed rest of the world markets, may show a sharp rise much faster than rest of the world markets perhaps from this week starting 10 august only.
As was written many a times earlier, the cross over of 20 & 50 day moving average has a great tendency of pulling the indices towards it & as on friday 7th august, 20 dma at 4470 was above the 50 dma at 4413 & one could notice how nifty came down to touch 20 dma & one should not be surprised to see nifty touching or even breaching 50 dma to induce an overall bearish sentiment before the next sharp up move to shoot high above the last weeks high of 4731 to move towards much higher levels. Long term investors must make full use of such falls in markets to quietly add on to their long holdings gradually.
Stock market cycles are unique and the impact of met, corporate results etc have a temporary effect on it. Be absolutely sure that new bull cycle has started from 6th march 09 and has a long way to go & one should not miss such "once in a life time" opportunity. One may be surprised to hear next week that met conditions are far better than last week or govt has taken adequate measures to overcome the poor rain fall condition. In fresh long term bull markets, there will always be corrections & these corrections in most cases go beyond ones expectations to induce fear & bearish feeling as had happened between 6th july to 13th july or on 21 & 22 july or on 28 & 29th july but the markets kept on moving up & up & one should not be surprised to see markets moving up & up again. Because the markets had gone up much higher from july lows of 3919 and also had crossed july high of 4670, it is now correcting to retrace a portion of the up move from july lows & once this cyclic retracement is over one will surely see a much sharper up move to record highs of the year beyond ones imagination.
Although the savage fall during the last 2 days of the week has shattered the hopes of many bullish swing traders who fear that the previous swing lows of 4420 or 4380 may be breached, they must realize that except for the announcement on uncertain met, there are no other negative news & the met conditions are such that it can change overnight. This type of met announcements are nothing new & similar predictions were also heard during june also but markets moved up only. So the met impact will be short lived & the markets are likely to resume the bull run.
Although the correction was due, but the lightening speed surprised many, as there were not much of fii selling nor internal fund selling & it was much of retail liquidation out of fear. This more than 5% fall in just 2 trading days brought down nifty on a week on week closing basis to close down by 3.3% compared to its previous week ending 31 july. So one can safely say that nifty took a well deserved pause after 3 consecutive weeks of mega rise from 13 july low of 3919 to 4th aug high of 4731.with this weeks closing, indian markets have under performed compared to rest of the world markets.
Comparing with previous weeks close, as per closings of all the indices on this fridays close, in us markets, dow had a 2% rise & had a consecutive 4th week of rise, s&p500 performed much better having closed above 1000 mark. European markets had a consecutive 4th week of rise, australia, brazil too had a consecutive 4th week of rise, among asian indices, japan had a consecutive 4th week of rise. Singapore after 4 weeks of rise corrected this week. Korea surprisingly had a 7th consecutive weekly rise. China after 7 consecutive weeks of rise, fell during this week, so also taiwan after 6 consecutive weeks of rise had a fall this week. It was only hong kong which like indian indices had a weekly fall after 3 mega weeks of rise but in case of hong kong the weekly fall was less than even 1%.so, indian markets having under performed rest of the world markets, may show a sharp rise much faster than rest of the world markets perhaps from this week starting 10 august only.
As was written many a times earlier, the cross over of 20 & 50 day moving average has a great tendency of pulling the indices towards it & as on friday 7th august, 20 dma at 4470 was above the 50 dma at 4413 & one could notice how nifty came down to touch 20 dma & one should not be surprised to see nifty touching or even breaching 50 dma to induce an overall bearish sentiment before the next sharp up move to shoot high above the last weeks high of 4731 to move towards much higher levels. Long term investors must make full use of such falls in markets to quietly add on to their long holdings gradually.
Stock market cycles are unique and the impact of met, corporate results etc have a temporary effect on it. Be absolutely sure that new bull cycle has started from 6th march 09 and has a long way to go & one should not miss such "once in a life time" opportunity. One may be surprised to hear next week that met conditions are far better than last week or govt has taken adequate measures to overcome the poor rain fall condition. In fresh long term bull markets, there will always be corrections & these corrections in most cases go beyond ones expectations to induce fear & bearish feeling as had happened between 6th july to 13th july or on 21 & 22 july or on 28 & 29th july but the markets kept on moving up & up & one should not be surprised to see markets moving up & up again. Because the markets had gone up much higher from july lows of 3919 and also had crossed july high of 4670, it is now correcting to retrace a portion of the up move from july lows & once this cyclic retracement is over one will surely see a much sharper up move to record highs of the year beyond ones imagination.
Although the savage fall during the last 2 days of the week has shattered the hopes of many bullish swing traders who fear that the previous swing lows of 4420 or 4380 may be breached, they must realize that except for the announcement on uncertain met, there are no other negative news & the met conditions are such that it can change overnight. This type of met announcements are nothing new & similar predictions were also heard during june also but markets moved up only. So the met impact will be short lived & the markets are likely to resume the bull run.
Friday, August 7, 2009
Markets for 07 aug 09
Again the critical index level of 4717 became a formidable resistance and nifty having remained above 4700 for the most part of the day could just touch the level of 4717 once & traders realizing that nse index can not cross the magic level of 4717, suddenly went rampage on a ruthless shorting spree & bulls too liquidated their positions and joined the party with bears & started shorting when the critical intraday support at 4560 was decisively breached. The merciless shorting was so powerful that nifty kept on falling & falling till it reached the lower band of the rectangle around 4560 levels. Although the savage fall during last hour of thursday has sprained the back bone of nifty, only a decisive breach of 4555 will certainly break the backbone of nifty to reach 4475 levels in quick time. However a bounce back from thursday lows can be considered as a normal fall induced by the met department as similar was the case on 29th july induced by reliance results or like the fall on 22 july induced by commodity price melt down.
If one has a look at the hourly chart above, one will notice that nifty after breaching the neck line of the mini h&s formation,took support exactly at the base of the rectangle. The ferocity of downward move clearly suggests that the base of the rectangle around 4555 will be breached & nifty may come down further to find temporary support around 100 ema around 4515 levels, & a breach of 4515 can easily bring down nifty to support around make or break 4477 levels. All these gloomy situation will only occur in case of a weak us & asian markets. However with strong asian markets in the morning ( which seems to be most unlikely), nifty can show a sharp bounce back towards 4628 to 4646 levels to encounter another bout of shorting, but whether the shorting this time will be successful or not is to be seen.
The fall on thursday has weakened most of the daily indicators all of which were earlier enjoying the luxury of upper 80% comfort zone & now have slipped below it. Another day of fall can confirm the weakness that the daily indicators have started to generate on thursday. Last weeks close for nifty was at 4636 and last weeks high was at 4670 after 3 consecutive weekly rise. So, niftys closing below the highs of last week may be nothing uncommon although bears will make their utmost efforts to pull down nifty on every intraday rise on friday to close below last weeks closing levels of 4636 to thwart 4th consecutive weekly gainA
If one has a look at the hourly chart above, one will notice that nifty after breaching the neck line of the mini h&s formation,took support exactly at the base of the rectangle. The ferocity of downward move clearly suggests that the base of the rectangle around 4555 will be breached & nifty may come down further to find temporary support around 100 ema around 4515 levels, & a breach of 4515 can easily bring down nifty to support around make or break 4477 levels. All these gloomy situation will only occur in case of a weak us & asian markets. However with strong asian markets in the morning ( which seems to be most unlikely), nifty can show a sharp bounce back towards 4628 to 4646 levels to encounter another bout of shorting, but whether the shorting this time will be successful or not is to be seen.
The fall on thursday has weakened most of the daily indicators all of which were earlier enjoying the luxury of upper 80% comfort zone & now have slipped below it. Another day of fall can confirm the weakness that the daily indicators have started to generate on thursday. Last weeks close for nifty was at 4636 and last weeks high was at 4670 after 3 consecutive weekly rise. So, niftys closing below the highs of last week may be nothing uncommon although bears will make their utmost efforts to pull down nifty on every intraday rise on friday to close below last weeks closing levels of 4636 to thwart 4th consecutive weekly gainA
Morning update on 07 aug 09
Last night dow recovered from a bigger fall to close nearly flat with only 24 points down, however important index s&p500 breached the 1000 mark to close at 997. Brazil was down by more than 1%.european markets closed in the +ve with uk ftse closing up by .9%.most of the asian markets which did not correct yesterday are likely to correct today at the back of fall in indian and chinese markets yesterday. Hong kong, singapore, taiwan & japan indices are to be the hardest hit.
For indian markets, since the more than 2% fall on thursday was worse than most of the other equity markets of the world, there is likely hood of some sort of corrective upward bounce after retest of thursdays lows. There might be a tug of war between the bulls & bears to close nifty above or below last weeks closing levels of 4636 but most likely the markets will close below the last weeks close to pause a bit in the weekly charts after 3 consecutive weeks of rise. Traders are advised to trade in limited quantity confining to intraday trades only without carry over of large un hedged future positions for next week . Option traders may continue with the plan of holding both calls and put options along with shorted higher calls as well as shorted lower puts.
For intraday trading on friday, only a decisive cross over of pivot around 4620 followed by 4656 can infuse some hope for the bulls or else markets are likely to be range bound with a negative bias. Approaching & crossing of last weeks highs of 4670 is likely to invite ruthless shorting again.
For indian markets, since the more than 2% fall on thursday was worse than most of the other equity markets of the world, there is likely hood of some sort of corrective upward bounce after retest of thursdays lows. There might be a tug of war between the bulls & bears to close nifty above or below last weeks closing levels of 4636 but most likely the markets will close below the last weeks close to pause a bit in the weekly charts after 3 consecutive weeks of rise. Traders are advised to trade in limited quantity confining to intraday trades only without carry over of large un hedged future positions for next week . Option traders may continue with the plan of holding both calls and put options along with shorted higher calls as well as shorted lower puts.
For intraday trading on friday, only a decisive cross over of pivot around 4620 followed by 4656 can infuse some hope for the bulls or else markets are likely to be range bound with a negative bias. Approaching & crossing of last weeks highs of 4670 is likely to invite ruthless shorting again.
Thursday, August 6, 2009
MONEY MAKEOVER
MONEY MAKEOVER
Financial planner
Gaurav Mashruwala warns that, these days, job loss is a routine part of life
Trevor Almeida's entire life has been a financial roller coaster ride. During his childhood, his mother was the main bread earner and, while she was an excellent money manager, things were tight. As Trevor grew older and started earning, the situation eased a little. However, his mother went through a prolonged illness which drained them financially. When things became good again, the economic slowdown hit him. Currently he is in between jobs. His wife Joyce is employed. They have a lovely son, Craig, who is five years old. WHAT ARE THEY SAVING FOR? (1) Their topmost priority is to pay back the home loan of Rs 24 lakh. (2) They need about Rs 5 lakh for their son's education and another Rs 7 lakh for his marriage. (3) Further, they need a corpus which can generate Rs 5 lakh a year during their retirement after 18 years. All this is at today's rate of inflation.
WHERE ARE THEY TODAY?
Cash flow: Until March this year, the Almeidas' joint annual inflow was Rs 26.21 lakh. This has been reduced to about Rs 14 lakh after the break in Trevor's career. They spend about Rs 16.21 lakh annually. This includes large amounts paid towards life insurance, taxes, home loan and routine household expenses. Yearly EMI on home loan is Rs 3.84 lakh.
Statement of net worth: Value of assets is Rs 1.35 crore. This includes assets worth Rs 88 lakh for self consumption. Their outstanding home loan liability is Rs 24 lakh — 17.75% of assets.
Contingency fund: While mandatory monthly expenses total Rs 1 lakh, the balance in savings bank, bank FD and cash at home is Rs 21 lakh — about 20 months' reserve.
Health & life insurance: They have a family floater policy of Rs 6 lakh. Total life cover for Trevor is Rs 22 lakh. Most life insurance policies are ULIPs.
Savings & investments: Value of savings and bank FD is Rs 20.90 lakh. Other investments include, direct equity Rs 23 lakh, equity mutual fund Rs 1.30 lakh, bonds Rs 50,000 and balance in post office schemes Rs 1.31 lakh.
FISCAL ANALYSIS: On termination of one income flow, expenses seem higher than income. Huge outflow towards insurance premium. Borrowing is within permissible limits. Health cover is in the form of a floater and hence not optimal. Life cover is through a ULIP. It takes away lots of family income and yet does not give sufficient cover. Overall, the portfolio is skewed towards equity. Large funds are lying idle.
WAY AHEAD:
Contingency fund: Until Trevor is between jobs, keep aside funds equivalent to six months' mandatory expenses. Once the new assignment begins, reduce the corpus to three months' reserve. Use balance funds to pay off the home loan.
Health insurance: As far as possible, opt for independent health cover. In turbulent times if there are multiple family illnesses, then coverage may not be sufficient. Get Rs 5 lakh cover for each family member. Life insurance: Trevor should have at least Rs 50 lakh worth term plans besides the ULIP policies. The ULIP plans are eating into their annual income without either generating optimum returns or giving sufficient cover, so should in part be terminated.
PLANNING FOR FINANCIAL GOALS: Repay home loan:As discussed, use funds parked in the bank FD to partly pay off the home loan. Once Trevor starts his career again, use the investment in direct equity to pay off the maximum loan amount. Son's education and marriage: These goals are more than a decade away. Firstly focus on repayment of home loan. After that, start systematic investment in (1) index fund (2) gold fund (3) international equity fund.
Retirement: Use those funds (same as in Craig's education and marriage) to create a corpus for retirement.
PLANNER'S EYE
Job loss is a part of life these days. It can be a both financially and emotionally turbulent time for the family. The wise family is one which prepares for bad times during good times. Unfortunately, when the going is good, most of us get complacent and postpone preparations for bad times.
Standard prudence suggests that (1) Have sufficient health insurance. Especially in case of job loss, get cover directly from insurance companies in addition to cover provided by employer (2) If you have outstanding loans, pay them off aggressively. In most cases, families may pay their EMI in time, but invest their excess funds instead of using them to pay off more of the loan. The combustible combination of an outstanding loan, job loss and fall in equity markets, can lead to more emotional and financial anxieties. (3) Lastly, always ensure that a portion of your portfolio is liquid. While real estate can generate good returns, they can create an illiquid portfolio.
Levels to watch on 6th aug
Sensex (15902) Res 16002-16115-16618 & Sup 15858-15695-15520.
Nifty (4694) Res 4731-4829-4862 & Sup 4680-4629-4603.
NiftyFut (4705) Res 4730-4850-4887 & Sup 4677-4622-4607.
Good Morning India - What's Happening, and Where, on Aug 6
001: NW18: Good Morning India - What's Happening, and Where, on Aug 6
002: (NewsWire18) - Main events scheduled today.
003: .
004: QUOTE OF THE DAY
005: "We heard that some of the Western leaders had decided to recognize but not
006: congratulate the new government... Well, no one in Iran is waiting for your
007: messages."
008: - Mahmoud Ahmadinejad, after being sworn in Wednesday for a second term as
009: President of Iran, despite weeks of political unrest (Time.com)
010: .
011: THURSDAY'S LEADERS: * Cabinet meeting. * Ahluwalia at book release.
012: * RBI OMO auction.
013: * Data alert==> US natural gas stocks, chain store sales;
014: India inflation.
015: .
016: CABINET MEET
017: * Prime Minister Singh to chair weekly meeting of Cabinet and Cabinet Committee
018: on Economic Affairs. 1700 IST, New Delhi.
019: .
020: CORPORATE EVENTS
021: * EGM of
022: + LESHA ENERGY RESOURCES.
023: * AGM of
024: + ACTION CONSTRUCTION EQUIPMENT.
025: + BIRLA ERICSSON OPTICAL.
026: + PAE.
027: + PLASTIBLENDS INDIA.
028: + RAJAPALAYAM MILLS.
029: + TATA POWER CO.
030: + VINDHYA TELELINKS.
031: + UNIVERSAL CABLES.
032: * BOARD MEETING of
033: + SARLA GEMS to consider raising of funds.
034: * PRESS MEET of
035: + INDIAN SYNTANS GROUP. To launch Nanofin Enterprises. 1145 IST, New Delhi.
036: + HAIER APPLIANCES. To announce future plans. 1130 IST, New Delhi.
037: + JAOLI BANK. Inauguration of 10th branch. 1700 IST, Mumbai.
038: + TATA TELESERVICES (MAHARASHTRA). To launch GSM services in Mumbai. Union
039: minister for communications and IT Kamat to be present. 1130 IST, Mumbai.
040: .
041: DATA ALERT
042: * from OVERSEAS
043: > ECB GOVERNING COUNCIL meeting. 1230 IST
044: > ITALY INDUSTRIAL OUTPUT in June. Seen 0.4% vs 0% prev. 1330 IST
045: > GERMANY TOTAL MANUFACTURING ORDERS in June. Seen 0.9% vs 4.4% prev. 1530 IST
046: > BANK OF ENGLAND bank rate decision. Seen unchanged. 1630 IST
047: > ECB interest rate decision. 1715 IST
048: > US JOBLESS CLAIMS in week to Aug 1. Seen 585,000 vs 584,000 prev. 1800 IST
049: > US EIA NATURAL GAS INVENTORIES in week to Jul 24. 2000 IST
050: > US CHAIN-STORE SALES in July.
051: * from INDIA
052: > WPI INFLATION RATE for week to Jul 25 to be detailed by commerce and
053: industry ministry. According to a NewsWire18 poll, the inflation rate is
054: seen rising to (-)1.50% from (-)1.54 a week ago.
055: > RAINFALL data for week to Aug 5 to be detailed by India Meteorological
056: Department.
057: .
058: GOVT BEAT
059: * Textiles Minister Maran to address media and announce key decisions. 1230 IST,
060: New Delhi.
061: .
062: CONFERENCES
063: * MANAGEMENT LECTURE: Tata Consultancy Services Ltd Chief Executive Officer
064: and Managing Director Ramadorai to address members of Calcutta Management
065: Association. 1000 IST, Kolkata.
066: .
067: RBI COUNTER
068: * DAILY LAF TENDERS: One set of 1-day reverse repo (at 3.25%) and 1-day repo
069: (at 4.75%). Bids may be submitted between 0930 IST and 1030 IST.
070: * PD UNDERWRITING fee cut-off seen:
071: > 2.00-3.00 paise for 40-bln-rupee auction of 6.49%, 2015 bond.
072: > 1.00-2.00 paise for 60-bln-rupee auction of 6.90%, 2019 bond.
073: > 5.00-6.00 paise for 20-bln-rupee auction of 7.40%, 2035 bond.
074: * OMO AUCTION yield cut-off seen:
075: > 6.90-6.95% on 7.38%, 2015 bond.
076: > 7.10-7.15% on 6.05%, 2019 bond.
077: > 7.90-8.00% on 7.95%, 2032 bond.
078: RBI has offered to buy a total of 60 bln rupees of the above three bonds.
079: .
080: MISC.
081: + FELICITATION: PHD Chamber to felicitate new MPs. Agriculture Minister Pawar,
082: Food Processing Industries Minister Sahai and Health Minister Azad to be
083: present. 1900 IST, New Delhi.
084: + BOOK RELEASE: Planning Commission deputy head Ahluwalia to release book Macro
085: Modeling for the Eleventh Five Year Plan of India. 1745 IST, New Delhi.
086: .
087: MARKETS
088: Call : Volumes seen dn as state-owned bks on 2-day strike. Rate seen in narrow
089: band. CBLOs: 2.25-2.75%. 1-day call: 3.20-3.30% vs 3.25-3.30% 5-day Tue.
090: .
091: Bonds : Seen down in thin trade due to 2-day bank staff strike. Outcome of RBI's
092: OMO may also be eyed. 10-yr yld: 7.00-7.10% vs 7.09% Wed.
093: .
094: Rupee : May open steady amid mixed cues from overseas markets. May fall intraday
095: on cos' dlr buys. Range: 47.40-47.65/$1 vs 47.51 Wed
096: .
097: Stocks: Seen down around 1% on US, Asian market cues. Metal cos may gain.
098: Sensex range Thu: 15700-16100; Tue end 15904, up 73 points or 0.5%.
099: .
100: MEDIA PICKS
101: ==HOME FRONT==
102: * Kakodkar says India can build nuclear aircraft carrier, warships (PTI)
103: * Nine militants killed in six encounters in Jammu & Kashmir (PTI)
104: ==FOREIGN AFFAIRS==
105: * Pakistan bans 25 entities including Jaish-e-Mohammed, Lashker-e-Taiba (var)
106: * Mahmoud Ahmadinejad begins a second term as Iran's president (CNN)
107: * Global swine flu deaths top 1,100. (var)
108: * Nepal former PM says India, US planned to attack China using Nepal. (IE)
109: ==BUSINESS AND ECONOMY==
110: > INDIA-RELATED
111: * CEO says Infosys eyeing $450 mln-$500 mln overseas buy (NW18)
112: * TRAI favours freeze on new telecom licences till norms finalised (NW18)
113: * Govt source says in advanced talks with World Bank on bank recap loan (NW18)
114: * Govt in talks with bks to finalise new fertiliser subsidy plan this mo (NW18)
115: * Reliance Power refutes DGH validation of Reliance Ind's capex (NW18)
116: * RBI likely to appoint successor to Rakesh Mohan by early Sep (NW18)
117: * Anil Ambani Group wants audit on RIL D6 capex to be made public (NW18)
118: * SEBI asks cos to pay ASBA fees to banks (NW18)
119: * West Bengal govt ready to give promised 90 acres land to Infosys, Wipro (ET)
120: * Essar tower co settles for stake sale (ET)
121: * DLF to exit insurance business (ET)
122: * Tatas may buy out AIG in life insurance joint venture (ET)
123: * PMS providers face cap on svc fees, SEBI mulls curbs after complaints (ET)
124: * Aircel raises 143-bln-rupee debt from SBI, Standard Chartered (ET)
125: * Core projects in for checks every quarter (ET)
126: * Low cost pension for poor soon (ET)
127: * Wipro may soon bag clutch of deals valued at $100 mln each (ET)
128: * Preference share conversion to up Tata Sons' holding in Tata Steel (ET)
129: * Lupin to launch more branded generics in US (ET)
130: * US exclusivity law may hit Indian biotech companies (ET)
131: * Tata Communications to focus on small cities (ET)
132: * L&T seek SEBI nod to sell its 6.9% in Satyam Computer (var)
133: * Reliance Power invites bids from contractors for Dadri project (ET)
134: * Exporters may land sops to explore new territories (ET)
135: * TRAI wants new licences put on hold (ET)
136: * Maytas Infra may have diverted 12 bln rupees to Satyam Comp (ET)
137: * Ford plans small car debut in 2010 (ET)
138: * State retailers to boycott UB brands (ET)
139: * Jet looks to cut 2,000 jobs in phases, shows door to 50 (ET)
140: * Govt stiffens terms for large road projects (BS)
141: * Three ex-SC judges to decide Balco stake sale arbitration (BS)
142: * Five more power plants seek gas from KG-D6 fields (PTI)
143: * Tata Power to put more funds in Indonesian coalfields (FC)
144: * ONGC Videsh set to invest $359 mln in Nigeria (FC)
145: > FROM OVERSEAS
146: * ArcelorMittal to continue mining coal in Siberia. (PTI)
147: * Google buys video technology company (BBC)
148: * Cathay Pacific returns to profit in Jan-Jun, fuel-hedge gain helps. (BBC)
149: * Societe Generale reports 52% fall in Apr-Jun profits at $445 mln (BBC)
150: * Sportswear giant Adidas sees Apr-Jun profits plunge 93% on-year (var)
151: ==SPORTS==
152: * Neck injury doubts hit Schumacher's return (CNN)
153: * Somdev Devvarman beats Cilic to reach ATP Washington Classic 3rd round (var)
154: * India trounce Belarus in junior women's hockey world cup (var)
155: * Prakash Amritraj advances to round 2 of ATP Vancouver Open (var)
156: ==OF INTEREST==
157: * German football song irks Muslims (BBC)
158: * Lok Sabha deletes seat number 420 (AA)
159: * US scientists decode entire HIV genome (AA)
.
176: WEEK AHEAD
177: Aug 7: Planning Commission Member Kasturirangan to speak at CII Rural Markets
178: Summit. Fortis Healthcare Chairman Harpal Singh and Triveni Engineering
179: Executive Director Sawhney to participate. 1000 IST, New Delhi.
180: Aug 7: Budget session of Parliament to conclude.
181: Aug 7: RBI to auction for 40 bln rupees worth of 6.49%, 2015 gilt, 60
182: bln rupees of 6.90%, 2019 paper and 20 bln rupees of 7.40%, 2035
183: gilt. All gilts will be sold under uniform pricing method.
184: Aug 7: Press meet of DSP Merrill Lynch to detail mid-year outlook. Director,
185: investment strategist Corry to speak. 1215 IST, MUMBAI
186: Aug wk 1: Electricity generation in July to be detailed by Central Electricity
187: Authority.
188: Aug wk 1: Trade data for June to be detailed by commerce and industry ministry.
189: .
190: ON THE HORIZON
191: Aug wk 2: Automobile sales data for July to be detailed by SIAM.
192: Aug wk 2: Foreign tourist arrival data for July by tourism ministry.
193: Aug wk 2: Rail freight traffic in July, railway ministry.
194: Aug wk 2: GSM subscriber addition in July to be detailed by COAI.
195: Aug wk 2: Air passenger traffic in July by civil aviation ministry.
196: Aug 12: Industrial production data for June to be detailed by CSO.
197: Aug 31: India's GDP growth in Apr-Jun to be detailed by CSO. End
198: Aug wk 3: Core sector output for July to be detailed by commerce and industry
199: ministry.
200: Sep 1: Supreme Court to hear Reliance Industries-Reliance Natural Resources
201: gas case.
202: Sep 1: Manufacturing PMI for August to be detailed by Markit Economics.
203: Sep wk 1: Electricity generation for August to be detailed by Central
204: Electricity Authority.
205: Sep 7: Economics Nobel laureate Michael Spence to deliver lecture on Climate
206: Change, Mitigation and Developing Country Growth. 1800 IST, New Delhi.
207: Oct 27: Reserve Bank of India Governor Subbarao to release the second-quarter
208: review of 2009-10 monetary policy.
002: (NewsWire18) - Main events scheduled today.
003: .
004: QUOTE OF THE DAY
005: "We heard that some of the Western leaders had decided to recognize but not
006: congratulate the new government... Well, no one in Iran is waiting for your
007: messages."
008: - Mahmoud Ahmadinejad, after being sworn in Wednesday for a second term as
009: President of Iran, despite weeks of political unrest (Time.com)
010: .
011: THURSDAY'S LEADERS: * Cabinet meeting. * Ahluwalia at book release.
012: * RBI OMO auction.
013: * Data alert==> US natural gas stocks, chain store sales;
014: India inflation.
015: .
016: CABINET MEET
017: * Prime Minister Singh to chair weekly meeting of Cabinet and Cabinet Committee
018: on Economic Affairs. 1700 IST, New Delhi.
019: .
020: CORPORATE EVENTS
021: * EGM of
022: + LESHA ENERGY RESOURCES.
023: * AGM of
024: + ACTION CONSTRUCTION EQUIPMENT.
025: + BIRLA ERICSSON OPTICAL.
026: + PAE.
027: + PLASTIBLENDS INDIA.
028: + RAJAPALAYAM MILLS.
029: + TATA POWER CO.
030: + VINDHYA TELELINKS.
031: + UNIVERSAL CABLES.
032: * BOARD MEETING of
033: + SARLA GEMS to consider raising of funds.
034: * PRESS MEET of
035: + INDIAN SYNTANS GROUP. To launch Nanofin Enterprises. 1145 IST, New Delhi.
036: + HAIER APPLIANCES. To announce future plans. 1130 IST, New Delhi.
037: + JAOLI BANK. Inauguration of 10th branch. 1700 IST, Mumbai.
038: + TATA TELESERVICES (MAHARASHTRA). To launch GSM services in Mumbai. Union
039: minister for communications and IT Kamat to be present. 1130 IST, Mumbai.
040: .
041: DATA ALERT
042: * from OVERSEAS
043: > ECB GOVERNING COUNCIL meeting. 1230 IST
044: > ITALY INDUSTRIAL OUTPUT in June. Seen 0.4% vs 0% prev. 1330 IST
045: > GERMANY TOTAL MANUFACTURING ORDERS in June. Seen 0.9% vs 4.4% prev. 1530 IST
046: > BANK OF ENGLAND bank rate decision. Seen unchanged. 1630 IST
047: > ECB interest rate decision. 1715 IST
048: > US JOBLESS CLAIMS in week to Aug 1. Seen 585,000 vs 584,000 prev. 1800 IST
049: > US EIA NATURAL GAS INVENTORIES in week to Jul 24. 2000 IST
050: > US CHAIN-STORE SALES in July.
051: * from INDIA
052: > WPI INFLATION RATE for week to Jul 25 to be detailed by commerce and
053: industry ministry. According to a NewsWire18 poll, the inflation rate is
054: seen rising to (-)1.50% from (-)1.54 a week ago.
055: > RAINFALL data for week to Aug 5 to be detailed by India Meteorological
056: Department.
057: .
058: GOVT BEAT
059: * Textiles Minister Maran to address media and announce key decisions. 1230 IST,
060: New Delhi.
061: .
062: CONFERENCES
063: * MANAGEMENT LECTURE: Tata Consultancy Services Ltd Chief Executive Officer
064: and Managing Director Ramadorai to address members of Calcutta Management
065: Association. 1000 IST, Kolkata.
066: .
067: RBI COUNTER
068: * DAILY LAF TENDERS: One set of 1-day reverse repo (at 3.25%) and 1-day repo
069: (at 4.75%). Bids may be submitted between 0930 IST and 1030 IST.
070: * PD UNDERWRITING fee cut-off seen:
071: > 2.00-3.00 paise for 40-bln-rupee auction of 6.49%, 2015 bond.
072: > 1.00-2.00 paise for 60-bln-rupee auction of 6.90%, 2019 bond.
073: > 5.00-6.00 paise for 20-bln-rupee auction of 7.40%, 2035 bond.
074: * OMO AUCTION yield cut-off seen:
075: > 6.90-6.95% on 7.38%, 2015 bond.
076: > 7.10-7.15% on 6.05%, 2019 bond.
077: > 7.90-8.00% on 7.95%, 2032 bond.
078: RBI has offered to buy a total of 60 bln rupees of the above three bonds.
079: .
080: MISC.
081: + FELICITATION: PHD Chamber to felicitate new MPs. Agriculture Minister Pawar,
082: Food Processing Industries Minister Sahai and Health Minister Azad to be
083: present. 1900 IST, New Delhi.
084: + BOOK RELEASE: Planning Commission deputy head Ahluwalia to release book Macro
085: Modeling for the Eleventh Five Year Plan of India. 1745 IST, New Delhi.
086: .
087: MARKETS
088: Call : Volumes seen dn as state-owned bks on 2-day strike. Rate seen in narrow
089: band. CBLOs: 2.25-2.75%. 1-day call: 3.20-3.30% vs 3.25-3.30% 5-day Tue.
090: .
091: Bonds : Seen down in thin trade due to 2-day bank staff strike. Outcome of RBI's
092: OMO may also be eyed. 10-yr yld: 7.00-7.10% vs 7.09% Wed.
093: .
094: Rupee : May open steady amid mixed cues from overseas markets. May fall intraday
095: on cos' dlr buys. Range: 47.40-47.65/$1 vs 47.51 Wed
096: .
097: Stocks: Seen down around 1% on US, Asian market cues. Metal cos may gain.
098: Sensex range Thu: 15700-16100; Tue end 15904, up 73 points or 0.5%.
099: .
100: MEDIA PICKS
101: ==HOME FRONT==
102: * Kakodkar says India can build nuclear aircraft carrier, warships (PTI)
103: * Nine militants killed in six encounters in Jammu & Kashmir (PTI)
104: ==FOREIGN AFFAIRS==
105: * Pakistan bans 25 entities including Jaish-e-Mohammed, Lashker-e-Taiba (var)
106: * Mahmoud Ahmadinejad begins a second term as Iran's president (CNN)
107: * Global swine flu deaths top 1,100. (var)
108: * Nepal former PM says India, US planned to attack China using Nepal. (IE)
109: ==BUSINESS AND ECONOMY==
110: > INDIA-RELATED
111: * CEO says Infosys eyeing $450 mln-$500 mln overseas buy (NW18)
112: * TRAI favours freeze on new telecom licences till norms finalised (NW18)
113: * Govt source says in advanced talks with World Bank on bank recap loan (NW18)
114: * Govt in talks with bks to finalise new fertiliser subsidy plan this mo (NW18)
115: * Reliance Power refutes DGH validation of Reliance Ind's capex (NW18)
116: * RBI likely to appoint successor to Rakesh Mohan by early Sep (NW18)
117: * Anil Ambani Group wants audit on RIL D6 capex to be made public (NW18)
118: * SEBI asks cos to pay ASBA fees to banks (NW18)
119: * West Bengal govt ready to give promised 90 acres land to Infosys, Wipro (ET)
120: * Essar tower co settles for stake sale (ET)
121: * DLF to exit insurance business (ET)
122: * Tatas may buy out AIG in life insurance joint venture (ET)
123: * PMS providers face cap on svc fees, SEBI mulls curbs after complaints (ET)
124: * Aircel raises 143-bln-rupee debt from SBI, Standard Chartered (ET)
125: * Core projects in for checks every quarter (ET)
126: * Low cost pension for poor soon (ET)
127: * Wipro may soon bag clutch of deals valued at $100 mln each (ET)
128: * Preference share conversion to up Tata Sons' holding in Tata Steel (ET)
129: * Lupin to launch more branded generics in US (ET)
130: * US exclusivity law may hit Indian biotech companies (ET)
131: * Tata Communications to focus on small cities (ET)
132: * L&T seek SEBI nod to sell its 6.9% in Satyam Computer (var)
133: * Reliance Power invites bids from contractors for Dadri project (ET)
134: * Exporters may land sops to explore new territories (ET)
135: * TRAI wants new licences put on hold (ET)
136: * Maytas Infra may have diverted 12 bln rupees to Satyam Comp (ET)
137: * Ford plans small car debut in 2010 (ET)
138: * State retailers to boycott UB brands (ET)
139: * Jet looks to cut 2,000 jobs in phases, shows door to 50 (ET)
140: * Govt stiffens terms for large road projects (BS)
141: * Three ex-SC judges to decide Balco stake sale arbitration (BS)
142: * Five more power plants seek gas from KG-D6 fields (PTI)
143: * Tata Power to put more funds in Indonesian coalfields (FC)
144: * ONGC Videsh set to invest $359 mln in Nigeria (FC)
145: > FROM OVERSEAS
146: * ArcelorMittal to continue mining coal in Siberia. (PTI)
147: * Google buys video technology company (BBC)
148: * Cathay Pacific returns to profit in Jan-Jun, fuel-hedge gain helps. (BBC)
149: * Societe Generale reports 52% fall in Apr-Jun profits at $445 mln (BBC)
150: * Sportswear giant Adidas sees Apr-Jun profits plunge 93% on-year (var)
151: ==SPORTS==
152: * Neck injury doubts hit Schumacher's return (CNN)
153: * Somdev Devvarman beats Cilic to reach ATP Washington Classic 3rd round (var)
154: * India trounce Belarus in junior women's hockey world cup (var)
155: * Prakash Amritraj advances to round 2 of ATP Vancouver Open (var)
156: ==OF INTEREST==
157: * German football song irks Muslims (BBC)
158: * Lok Sabha deletes seat number 420 (AA)
159: * US scientists decode entire HIV genome (AA)
.
176: WEEK AHEAD
177: Aug 7: Planning Commission Member Kasturirangan to speak at CII Rural Markets
178: Summit. Fortis Healthcare Chairman Harpal Singh and Triveni Engineering
179: Executive Director Sawhney to participate. 1000 IST, New Delhi.
180: Aug 7: Budget session of Parliament to conclude.
181: Aug 7: RBI to auction for 40 bln rupees worth of 6.49%, 2015 gilt, 60
182: bln rupees of 6.90%, 2019 paper and 20 bln rupees of 7.40%, 2035
183: gilt. All gilts will be sold under uniform pricing method.
184: Aug 7: Press meet of DSP Merrill Lynch to detail mid-year outlook. Director,
185: investment strategist Corry to speak. 1215 IST, MUMBAI
186: Aug wk 1: Electricity generation in July to be detailed by Central Electricity
187: Authority.
188: Aug wk 1: Trade data for June to be detailed by commerce and industry ministry.
189: .
190: ON THE HORIZON
191: Aug wk 2: Automobile sales data for July to be detailed by SIAM.
192: Aug wk 2: Foreign tourist arrival data for July by tourism ministry.
193: Aug wk 2: Rail freight traffic in July, railway ministry.
194: Aug wk 2: GSM subscriber addition in July to be detailed by COAI.
195: Aug wk 2: Air passenger traffic in July by civil aviation ministry.
196: Aug 12: Industrial production data for June to be detailed by CSO.
197: Aug 31: India's GDP growth in Apr-Jun to be detailed by CSO. End
198: Aug wk 3: Core sector output for July to be detailed by commerce and industry
199: ministry.
200: Sep 1: Supreme Court to hear Reliance Industries-Reliance Natural Resources
201: gas case.
202: Sep 1: Manufacturing PMI for August to be detailed by Markit Economics.
203: Sep wk 1: Electricity generation for August to be detailed by Central
204: Electricity Authority.
205: Sep 7: Economics Nobel laureate Michael Spence to deliver lecture on Climate
206: Change, Mitigation and Developing Country Growth. 1800 IST, New Delhi.
207: Oct 27: Reserve Bank of India Governor Subbarao to release the second-quarter
208: review of 2009-10 monetary policy.
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