16th December 2009 Good Morning, Market Synopsis: 16th December 2009. Market Direction: Nifty projections for the day are in the range of Neutral – Down. Nifty was analyzed technically and the diagnosis was that for today it would trade with a Neutral – Downward bias. While trading today keep a lookout for the level of 4991 – 5003 and 4967 – 4973, as these are the levels where the nifty would take support. It is from these levels that there could be a bounce back. An intraday buy strategy could be implemented if the market dynamics support in favor of buying at these levels. 5103 - 5108 is the maximum top the market can achieve today, provided it begins to move above the level of 5053 – 5056. The bears would be in charge today. So long as the markets trade below the Neutral – Up level mentioned in the Chart Construction it is suggested that the trader should initiate short trades. Secondly if the market opens with a positive bias one can initiate short positions at the Nifty level between 5053 – 5056 or 5073 – 5087. These positions should be taken once the market has given a turn around sign. The projections suggested today are all in favor of bearish trades. Protect your shorts between the ranges of 4960 – 4990. There is a strong support zone here. It is projected that the Nifty would not trade below the level of 4943 – 4950 today. The cycle mentioned before has taken effect and it is prudent to follow the trend in the given cycle till the cycle changes. Players Strength: Technical studies suggest that bears are in charge for the day. As the technical studies point out to this information. Action: Be Short in the market for the day. Short Term Opinion: Trading would be in a range between 5038 – 5185. There is still a move left which will take the markets up, before this up move terminates. But this will be discussed when the time is appropriate. In case 5038 is taken out expect Markets to move down to the levels of 4960 – 4990. Stocks: Ambuja Cements, Guj Ind Power, HDIL, India Cements and Maruti have been recommended for trading purpose. Check the Market Strategy section for details. Score Card: 15th December 2009, Today Nifty performed within the limits that were mentioned in the Chart Construction. The Nifty performed according to the Chart Construction. As Nifty did not cross the level of 5128 – 5131, which was the Bullish Above level and also the Breakout Level, higher targets were not achieved. The contrarian projection made was nullified as the Nifty did not trade above the breakout levels. Nifty made a high of 5129.45 against the level of 5128 - 5131, which was forecasted as a Bullish Above and the Breakout Level in the Chart Construction. This level was spot on to confirm the accuracy of the Chart Construction for the day. Nifty opened at 5105.75 and moved up to make a high of 5129.45 before closing at 5033.05. If you observed the Nifty play for the day dated 15 December 2009, you must have noticed that the Nifty respected all the levels on the Chart Construction by moving up or down from them. On the whole Nifty lost 71.95 points over yesterday's closing of 5105.70. The market breadth was in the range favoring the sellers. The advancing stocks and the declining stocks were not in equilibrium. 237 stocks advanced and 971 stocks declined while 31 stocks remained unchanged. The ratio of 1: 0.24 in favor of declining stocks suggests that the bulls did not have a good day today. Trading Scorecard: 15th December 2009: Guj Nre Coke: Target Achieved. Siemens: Target Achieved. Wipro: Target Achieved. Considering the market condition on the given day and the strategies recommended, not all the stocks performed to the given potential. The strike rate today was 100 %. From the feedback we got the clients were in money today On the trades they committed to on our recommendations. Market Summary: Nifty closed at 5033.05 for the day dated 15th December 2009 with a loss of 71.95 points on Expanding Volumes. Giving a sense, the bears were in charge in the market today. Directional movement prevailed in the markets today, as against the trend days prior to today. What is evident from the volumes is that cash markets witnessed some Selling on higher volumes. The Market is always right and we have to go by this maxim and only take positions opposite to the trend, only when the markets tell us to.. Today the stocks surrendered some of the gains towards the end of the trading session. All in all the Nifty closed in a negative position. The downward move today was supported by all the major indices in the Nifty, Pointing towards a further downside. As was the call taken to go long, this was contrarian in nature, did not materialize as the Nifty failed to go above the Bullish Above zone mentioned in the Chart Construction. On the contrary when the markets started the move below the level of 5090, money would have been made as it was suggested to go short. Market Analysis: Nifty closed at 5033.05 for the day dated 15th December 2009 with a loss of 71.95 points over the previous close of 5105.70 on Expanding Volumes. The ratio of advancing stocks to declining stock was in favor of Declines. 971 stocks declined and 237 stocks advanced while 31 stocks remained unchanged. The following is an analysis for the market on 16th December 2009 in short, without mentioning all the details. Price action: Prices are expected to move in a Neutral - Down direction with a bias towards the Down side. The analysis of Nifty has given an uncomfortable position on probability analysis. The probability analysis has come at 13 % for the markets moving up and 87 % for the markets moving down. There is no directional conflict as is evident from the analysis of daily charts. So it can be said with confidence that the markets are poised to move down. Volumes: Expanding Volumes with a loss in price, suggesting a short term down move on daily charts. Nifty is in a Trending range as of yesterday. If a trend develops from here you can expect a healthy move in the markets in the coming days but one will have to wait for the markets to give the sign of this upcoming move. Trend: Market has got into a trending range, this suggests that the market would be neutral or move lower in the near term, as we are near the strong support zones. The market has to give a close above 5037.00 to confirm an up move. A close above 5037.00 will augur well for the bullish sentiments in the near short term. A close below 4967.00 will ensure that Nifty has some more ground to lose before it can commence its up move and would be in charge of the bears. Money Flow: Money flow is decreasing in the market as is evident by the status of price fall in the markets on the daily charts. On the weekly charts also the money has flowed out of the market on a minuette degree. In a situation like this the down move should continue. Volatility: Volatility would be neutral to mild today. Sentiments: Sellers are in charge of the market. Market Patterns: Neutral to down move in Nifty is suggested by the Pattern analysis, Candlesticks analysis, Indicator and Oscillator analysis, Fibonacci analysis, Gann analysis and Elliott Wave analysis over a short term time scale. Cycles: The next cycle turning date falls between the 14 and 16 of December 2009. So expect the market to be neutral or lower as there is ample time to nurture this up move in the short term. There is a good chance that the Nifty could move lower today. A trend reversal can take place around these dates between the 14th and the 16th of December 2009. The next cycle change date will be mentioned in the days to come. S.W.O.T Analysis: Strength: Based on the evidence that is thrown up by the Market Analysis it is projected that the Market would be neutral - down today. Most of the parameters point in this direction. The evidence of the analysis tells of the Bears in the short term are in charge. Though the studies show a neutral to down move, it is prudent for the market to guide us. The prognosis is based on the probability analysis which suggests a 87 % probability of the markets being neutral or moving lower. Any percentage above 80 is good in guiding us for the trend for the day. Weakness: There is very little strength in the market as shown by the studies; except for what the Global markets would do today. This would have a strong influence on Nifty and the direction it trades today. Nifty has to trade above 5037.00 to move upwards in the immediate future and if nifty gives a close below 4967.00, the bears will retain an upper hand in the Markets. Opportunity: Opportunity the market presents is to be Short unless the Global Markets dictate otherwise. If the Nifty begins to trade above 5037.00, then it would not be prudent to be short in the market. And if the Nifty begins to trade below 4991.00 it would not be prudent to be long in the market. Use the Chart Construction to guide you in this respect. The opportunity lies in trading the markets on the short side today. Take informed decisions before trading. Threat: There are no threats to the Bears as yet. The Market has to be traded on the short side today. The Bears would feel threatened only and only if Nifty begins to trade below 5037.00 in the short term. Secondly the cues from the Global Markets would be the guiding force behind our markets. Market Insight and Prognosis: Taking into consideration the Market Summary and Market Analysis, It can be said with a certain degree of confidence that the Markets are poised to move down or at the most be neutral on 16th December 2009. A close above the level of 5056.00 will open the doors for an upside, in time and price. Nifty has to trade above 5056.00 to be in a short term bullish mode. If it fails to do so, expect a fall in the market in time to come. If the Nifty moves above 5056.00 on closing basis, a target of 5156 – 5161 can not be ruled out. But today being a possible down to a neutral day, the bullish sentiments may be overlooked. But then markets do have a tendency to surprise you when you least expect it. It is always better to follow the markets than predict the turn around. Use the Daily Chart Construction to guide you through the day. In the markets any thing can happen. If the levels on the Daily Chart Construction are superseded revert to the Weekly Chart Construction. Strictly adhere to the suggested Stop Loss as this will ensure the safety of you capital. Never trade without a Stop loss. Thirdly observe what the Markets are doing near or at the target levels of the stocks given to trade. Relate this to the Chart Construction before you take your decision to exit or enter a trade. If this becomes a discipline with you, then trading would be a cake walk for you. Strategic Action: Nifty had been trading in a narrow for the past few days. If 4967.00 is taken out on closing basis a target between 4800 - 4850 is expected. This forecasted Down move would be rapid. On the lower side the target of 4967 – 4973 is possible on intraday basis. If a close takes place below this, we will see the nifty testing 4800 - 4850 before moving up again. Most of the volatility instruments are showing that there would be an increase in volatility in the near future. Close up above the bullish above level of 5033 – 5087 will augur a short term buy positions for carry forward trades. As is evident the market is moving with a neutral – down bias and if the market moves below 4967 on closing basis at target of 4800 - 4850 is visible. There is a possibility of sluggish markets today unless 4967 is taken out on the lower side or 5037 is taken out on the upper side. If one has to trade this market, be certain that you are nimble footed and are able to take action at the drop of a hat. One can trade this market on the short side if reliable information is available. As a trader one must wait for the trend to develop before one can take action. All in all we can recommend shorting as a strategic action today. Wishing you a great trading day. With Regards, Ranjit. | 
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