Nifty Index updated on 11 August 06

These are my personal musings. These are not in any way meant to be trading advise. To view the full chart, right click and open in a new window.

As suggested yesterday, there was a minor correction in the Nifty. The immediate earlier top, which had been exerting resistance, was retested today, and the Nifty managed to stay above it. On today’s chart, I have also marked out a previous supply zone, where the Nifty has earlier paused. It was on 26 May, that the Nifty has made an hourly top of 3277.60. That is one of the reasons that it is faltering again and again at these levels.

While scrolling through the individual charts of the Index’s components, we see the banks, auto, petroleum and some pharma stocks showing weakness, while some other heavyweight stocks seem to be taking over the mantle of strength.

With that in mind, we could be prepared for a choppy week ahead, especially with an intervening holiday on Tuesday.

Nifty Index updated on 10 August 06

These are my personal musings. These are not in any way meant to be trading advise. To view the full chart, right click and open in a new window.
As was suggested yesterday, the upward momentum has slowed down for the Index. The short term trend is still up. We did see a crack in the short term trend, but the Index was quick to recover.
The momentum having slowed, the possibility still remains that we could see a downward correction. The correction may not be too deep, as we see strong volumes coming into the Nifty Future, on every dip.
In terms of analysis, today was a “nothing” day, where the price has done nothing much. And it is “nothing” days like today, which place doubts in traders’ minds. In candlestick terms, it is like a spinning top on the end of day chart. This leads to corrections. In conclusion, wait for corrections, and take full advantage of dips.

Nifty Index updated on 09 August 06

These are my personal musings. These are not in any way meant to be trading advise. To view the full chart, right click and open in a new window.
The Nifty chart clearly shows the upside breakout of the short term downtrend. As has been suggested all along, we could have been buying on dips. Today, the Nifty has achieved its short term objective of 3250+. Also the Sensex has almost achieved the Fibonacci retracement level of 11195. No doubt both the indices have reached their price objectives. It also leads me to believe that there could be a temporary halt here.
Further, normally, whenever there is an upside breakout, the prices tend to slip down on profit booking. This profit booking allows the price to test the breakout levels. If the breakout levels hold, then we could expect the longer term trend to continue up. Therefore, we may see some sort of downside correction from here.
But again, we have to step back a little and observe the woods, and not the trees.
The intermediate trend is still positive, and a downside correction, if any, would only be in the nature of the bears testing the waters.
As has always been maintained since the last six weeks, the patient traders can make money provided they time the market in their buying.
In conclusion, wait for buying opportunities, rather than rush in.

Nifty Index updated on 09 August 06

These are my personal musings. These are not in any way meant to be trading advise. To view the full chart, right click and open in a new window.
The Nifty chart clearly shows the upside breakout of the short term downtrend. As has been suggested all along, we could have been buying on dips. Today, the Nifty has achieved its short term objective of 3250+. Also the Sensex has almost achieved the Fibonacci retracement level of 11195. No doubt both the indices have reached their price objectives. It also leads me to believe that there could be a temporary halt here.
Further, normally, whenever there is an upside breakout, the prices tend to slip down on profit booking. This profit booking allows the price to test the breakout levels. If the breakout levels hold, then we could expect the longer term trend to continue up. Therefore, we may see some sort of downside correction from here.
But again, we have to step back a little and observe the woods, and not the trees.
The intermediate trend is still positive, and a downside correction, if any, would only be in the nature of the bears testing the waters.
As has always been maintained since the last six weeks, the patient traders can make money provided they time the market in their buying.
In conclusion, wait for buying opportunities, rather than rush in.

Nifty Index updated on 08 August 06

These are my personal musings. These are not in any way meant to be trading advise. To view the full chart, right click and open in a new window.
The market recovered quite sharply from the lows of yesterday. Even though we had a good up move, the extreme short term trend is still down. Since the intermediate trend is up, it was suggested in my earlier posts, to use the short term dips to buy. Please check my post of Friday …. Click here.
The Nifty is back in the zone of uncertainty, but this time around, it does seem to have gathered enough momentum to break out upwards. The markets are just waiting for a cue from the FOMC meet, and then take any decisive move.
Let us wait and watch.

Nifty Index updated on 07 August 06

These are my personal musings. These are not in any way meant to be trading advise. To view the full chart, right click and open in a new window.
As suggested on Friday, there was follow up weakness today, and the Nifty has indeed gone into a short term downtrend. Actually, no one is willing to take a directional call on the market, with the FOMC meeting coming up ahead. For those who are not aware, the FOMC meet is where the Govt. of USA decides whether or not to raise interest rates.
The boogie of interest rates has always loomed large on the markets, with most major Governments raising interest rates, thereby making borrowing of capital more expensive.
The charts too are reflecting the uncertainty in players’ minds. I have highlighted the sideways movement of the Nifty, where it played out for most of the day. Therefore, the price action on Thursday and Friday will have a most crucial bearing on the future of the Indian markets.
With the price action of the past, we could expect support marked out at the 3050 to 3060 level.
Now is the time, when patience will pay rich dividends.