Nifty Roadmap for the Weeks Ahead - AP

Nifty 4225 and Beyond - AP

After being overtly bullish for the last few days, I am cautiously bullish now. The market is fast approaching overbought conditions on hourly charts, and hence the cautiousness. The first hurdle for Nifty is 4110-4120, and the support level is 3990-4020 (it should not go below this level this week, if this bullishness is to continue).
It is recommended to remain long, and also hedge the positions by buying Nifty puts once Nifty approaches 4190-4220.

The puts can be squared off in loss once Nifty crosses and closes above 4225, beyond which 4365-4370 looks possible. Till then enjoy the see-saw ride.

'See-saw' reminds me of the relation between Nifty and the MCX Crude in INR. Nifty on January 8, 2008 was 6357, which was the high for the Nifty for months to come (even years!) and the high of crude oil on MCX on July 15, 2008, was 6358, again a high for monthsand years to come.

Are the bulls and bears in the stock market and commodities markets playing a game of see-saw like the kids do in a park?

Happy Days are Indeed Here Again - AP

On Monday, much before the market opened, I had hinted at a reversal this week [Happy Days are Here Again]. It was mentioned that 'it is highly likely that the level of 3800-3840 on the Nifty will be protected'.

The results are in front of you.

Not only this, but another big confirmation is an Island reversal. Before you say, 'Oh no, not again,' let me tell you that yes, we do in fact have an Island reversal, but this time it is to the upside.

Readers of this blog are too familiar now with what happens after an island reversal, and how far can one go. For targets, refer the post of July 7, which gave possible upside targets.

For your continuous support, here is a free call: ICICIBANK - Above 649 target 690+.

200 HMA-gic: Magician at Work

Is there some magician who has cast his spell on the stock markets? Looking at the amazing lows of the Nifty today, it appears very likely. Today's low on Nifty spot is again bang on the 200 Hourly MA that was mentioned a couple of days ago.

A support level becomes a serious support level after getting retested. This is exactly what happened today. If bulls are standing at this level, what will bears do?

They have two alternatives:

• Retreat back a bit, take a start a la Shoaib Akhtar and make one more attempt on this level;
• Just run away (as in start covering shorts).

It would be curious to see which one will take the markets up now, if this level holds. Will it be bears who will take the market up, or fresh buying by bulls? Unfortunately, this answer will be available only after 9.55 am tomorrow. If long overnight, use 4940 Nifty Spot as a stoploss level and stay long. It does not matter who you are riding with: retreating bears or new bulls.

Interestingly, the Dow is behaving exactly the way Nifty is, up 100 points after just 25 minutes of trade today. If Dow closes strong, expect a strong opening tomorrow, and enjoy the 200 HMA-gic.

Potential Nifty targets are marked in the next chart, which at this point in time would be very difficult for most people to believe.

Keep the faith and enjoy the Nifty tomorrow. The 200-HMA magician could conjure up some really good tricks for you.

Cheers.

The Beauty of the Hourly 200 MA - Abhijit Phatak

Every low and high for the Nifty or for that matter any stock has some significance. Traders must be wondering what was the signifiance of today's low on Nifty - i.e. 4914.8. The low today was bang on the hourly 200 MA - yes!

The 200 DMA is quite well known even to those who do not follow charts, thanks to our TV channels. However, it is quite interesting to note that the hourly 200 MA (200 HMA) too plays a role in giving support and acting as resistance. For a trader, the thumb rule to be followed is simple - look for shorts just below the 200 HMA and look for longs just above the 200 HMA. Stop loss levels are very tight in such situations. Some hints for trading tomorrow - IDBI, RCOM, Reliance Industries and many more on the long side.

Happy trading.