Regards, Minesh M. Temkar. www.mintmaxvfm. blogspot.com
"As is our confidence, so is our capacity." ? William Hazlitt
On Mon, 21 Dec 2009 03:50:47 +0530 wrote
21st December 2009:
Good Morning,
Market Synopsis: 21st December 2009:
Market Direction: Nifty projections for the day are in the range of Neutral – Up. Nifty was analyzed technically and the diagnosis was that for today it would trade with a Neutral – Up bias. While trading today keep a lookout for the level of 5029 – 5033, as these are the levels from where the
nifty could make an effort to breakout from a resistance zone. It is from the breakout of these levels that there could be a charge made towards the level of 5124. An intraday buy strategy could be implemented if the market dynamics support in favor of buying when Nifty crosses the level of 5001. 5074 - 5079 is the Maximum Top the Nifty can achieve today, provided it begins to move above the level of 5062 – 5066.
The Bulls would be in charge today. So long as the markets trade above the Neutral – Up level of 4994 - 5001 mentioned in the Daily Chart
Construction. It is suggested that the trader should initiate Long Trades.
The projections suggested today are all in favor of Bullish Trades. Protect your Long positions if Nifty begins to trade below 4974. 4974 Is an important support as this is the 55 day EMA.There is a strong support zone here and the main reason for taking a contrarian long positions. It is projected that the Nifty would not trade below the
level of 4962 – 4974 today. Historically Nifty has taken support many a times on the 55 Day EMA. And also the Cycle change forecasted as the 21-24 December made the analysis look in the direction of an up move today. All in all please keep a sharp lookout at the level of 4974.
The overall out look to the market is bullish unless the Nifty begins to trade below 4974. In the slightly longer term involving a week, this looks like a pull back. The markets could begin their downward journey after a brief pull back. This will be confirmed to you once a directional change has been established.
Players Strength: Technical studies suggest that bears/bulls are in equilibrium for the day. As the technical studies point out to this information. There is a possibility that the Bulls might gain an upper hand today.
Action: Be Long in the market for the day if Nifty begins to trade above 4994 - 5001. Protect your long intraday positions if Nifty begins to trade
below 4974.
Short Term Opinion: Trading would be in a range between 4969- 4987 on the lower side and 5154 – 5157 on the higher side. In case 4974 is taken out
in intraday expect Markets to move down to the levels of 4801– 4803 or 4774 - 4786.
Stocks: Dalmia Cements, Simbhaoli Sugars and Shr Laksmi Cotsyn have been recommended as trading stocks for the day. Please check the Market Strategy
attachment dated 21 December 2009 for the details.
Score Card:
18th 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 5052 – 5055, which was the Bullish above and the Breakout level it
remained weak through the day before closing at 4987.70. This was 54.05 points lower as compared with the previous close of 5041.75. Nifty made a high of 5043.00 against the level of 5052 - 5055, which was forecasted as a Bullish Above Level in the Chart Construction. This level was close to confirm the accuracy of the Chart Construction for the day and also the bearish prognosis made for the day. Nifty opened at 5042.00 which was incidentally the high before closing at 5042.05. If you observed the Nifty play for the day dated 18 December 2009, you must have noticed that the Nifty respected the levels on the Chart Construction by moving up or down from them in tune with the Fibonacci integers. On the whole Nifty lost 54.05 points over the previous days closing of 5041.75.
Trading Scorecard: 18th December 2009:
Considering the market condition on the given day no trading strategies were recommended. Although the prognosis, that the day would be bearish did come good.
21st December 2009:
Market Analysis:
Nifty closed at 5041.75 for the day dated 18th December 2009 with a loss of 54.05 points over the previous close of 5041.75 on Contracting Volumes. The ratio of advancing stocks to declining stock was in favor of Declines. 384 stocks advanced and 815 stocks declined while 42 stocks remained unchanged. The following is an analysis for the market on 21st December 2009 in short, without mentioning all the details.
Price action: Prices are expected to move in a Neutral - Up direction with a bias towards the Up side. The analysis of Nifty has given an uncomfortable position on probability analysis. The probability analysis has come at 53 % for the markets moving up and 47 % for the markets moving down. There is a directional conflict as is evident from the analysis of daily charts. The analytical outcome shows that Nifty is
near the support zone of 5074 which is the 55 Day EMA. The 55 Day EMA in the past has given Support to the Nifty therefore ignoring the neutral status of the probability analysis it would be better if we trade long in the markets for the day. Secondly the Time Cycle – 21-24 December forecasted before also coincides with the 55 Day EMA.The markets are poised to trade with a bias towards the upside.
Volumes: Contracting Volumes with a marginal loss in price, suggesting a short term down move on daily charts. This down move could get terminated at the level of 4974. Nifty is in a Trending range as of today. If a trend develops from here you can expect a fast move in the markets. There is a possibility that this up move could be short lived as majority of the instruments on the weekly charts are showing a negative bias.
Trend: Market has got into a trending range, this suggests that the market would be neutral or move higher in the near term, as we are near the strong support zones between 4962 - 4978. The market has to give a close above 5033.00 to confirm an up move. A close above 5033.00 will augur well for the bullish sentiments in the near short term. A close below 4974.00 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 Neutral in the market as is evident by the status of price fall in the markets on the daily charts. Also the smart money in the short
term is neutral suggesting that new money is not taking positions in Nifty. 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 after a decent pull back.
Volatility: Volatility would be neutral to High today.
Sentiments: Buyers are in charge of the market for today.
Market Patterns: Neutral to up 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 21 and 24 of December 2009. So expect the market to be neutral or Move higher as there is time to nurture this up move in the short term. There is a good chance that the Nifty could move higher today. A trend reversal can take place around these dates between the
21st and the 24th of December 2009.Therefore the contrarian position.
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 - UP today. The evidence of the analysis tells of the Bulls in the short term are in charge. Though the studies show a neutral move, it is prudent for the market to guide us. The prognosis is based on the probability analysis which suggests a 53 % probability of the markets moving higher. Any percentage above 80 is good in guiding us for the trend for the day. But on turn around days this probability analysis has a ratio of 50 %. If it were not for the 55 Day EMA and the Cycle Turning Date the suggestion would have been to go short. Therefore look for the direction before you make your trades. The direction is provided in the Chart Construction.
Weakness: There is very little weakness 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 5033.00 to move
upwards in the immediate future and if nifty gives a close below 4974.00, the bears will retain an upper hand in the Markets in the near term.
Opportunity: Opportunity the market presents is to be long unless the Global Markets dictate otherwise. If the Nifty begins to trade above 5033.00, then it would not be prudent to
be short in the market. And if the Nifty begins to trade below 4974.00 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 Long side today.
Threat: There are no threats to the Bears as yet. The Market has to be traded on the Bullish side today. The Bears would feel threatened only and only if Nifty begins to trade above 5124.00 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 up or at the most be neutral on 21st December 2009. A close above the level of 5033.00 will open the doors for an upside, in time and price. Nifty has to trade above 5033.00 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 5033.00 on closing basis, a target of 5124 – 5127 can not be ruled out. But today being a possible up to a neutral day, the bearish sentiments may be overlooked unless Nifty trades below 4974. 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 5033.00 is taken out on closing basis a target between 5121 - 5124 is expected. This forecasted Up move would be rapid. On the lower side if the target of 4960 – 4971 is taken out expect
the markets to move towards the level of 4800 – 4850 in the near term. Most of the volatility instruments are showing that there would be an increase in volatility in the near future.
The Nifty seems to be in equilibrium as suggested by the price movement. A close above 5033 will be bullish for the Markets. A close below 4974 will not be welcome news for the bulls. It is projected that the market should trade on the maximum low
level of 4969 – 4974 for the day. When markets are in equilibrium it is prudent to trade breakouts and breakdowns. This is said because a trader should not get caught ion the wrong side of the market at any given time. There is a chance that the levels on the nifty may supersede the levels on the Daily Chart Construction on the either side. In this situation revert to the Weekly Chart construction for the next possible target level.
Price of Nifty is near the strong support Zone of 4969 – 4974. A bounce back can be expected from here. This bounce back is anticipated. But let the market decide this for us. The strategy of being long in the market could be short lived. We will
have to see what the Nifty does as and when it achieves the level of 5121 – 5124. But until this level is achieved and if Nifty maintains above the level of 4974 it is prudent to take long positions. Remember if 4974 is taken out quit all long positions.
One can trade this market on the Long 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 going long as a strategic action today.
Wishing you a great trading day.
With Regards,
Ranjit.
PS: I am sending you an Elliott Wave chart that shows a slightly longer term viewpoint.
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