NIFTY : where to from 7714?

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For traders and investors in the Indian Equity markets , questions remain:

  1. Sell Stocks at 7714 , wait for a break of 7950 and reenter
  2. Stay invested and wait to sell near 7875- 7950 range and then wait for a break
  3. Short on upticks with stops near 8050 for a retest of the trend line supports.

Broadly : Are we on a one way street to make new highs with intraday corrections or is it a market that will crash with fervor as we have seen in the recent past?

As an investor and trader of futures contracts on own account , I face the dilemma that keeping large stops in material positions defeats the purpose of a stop. The stop needs to be very tight. Especially after the NSE increased the lot sizes.

Analysts and advisors don’t have that problem.Even if all the stops on recos have triggered , they magically still have the cash to continue in the market.No offense meant, but when u deal with real cash , things are a bit different.

I was going thru the charts of the NIFTY and wanted to share some thoughts.

 

NIFTY weeklies ( dailies are not very different)

  1. The long term trend line since 2008 has so far held
  2. The sloping mid 2014 to 2016 trend line break at the 7780 handle can cause to test the Jan highs of 7950, and then possibly go further up towards the 8000 number .

Conclusion:

1)If u are not yet long , and made no money on the long side till now . WAIT FOR 7950 to short with stops near 8050.

2) if u’ve made some money , then get to the futures in stocks that have participated to a lesser extent and keep a 3% to 5% stop. UR stop will be lesser and chances are there will be sudden up moves in those.

screenshot-economictimes indiatimes com 2016-03-22 16-55-38

Below is a further break down of the heavy weights in the NIFTY 50.

INFY : Looks to provide support

  1. Looks to provide support to the Index , On the verge of a break on dailies and it could lead the IT pack .

infosys

ITC : GRAVE RISK

  1. Led the Rally from the bottom , but the structure does not give any confidence that it will support the Index . At max a range before a possibility of a massive break down .Can lead the fall.

ITC

HDFC BANK : looks to provide support

  1. Only a break above highs will provide the comfort of a new consolidation break out .
  2. Has the potential to provide limited support

HDFC BANK

HDFC Main : Supportive

  1. Long term trend line is in place
  2. Short term false break , portends a break on the upside.
  3. Supportive of NIFTY

HDFC Main

RIL : THE DARK HORSE: Supportive

  1. Can potentially lead the NIFTY to a new high if the 2009 to 2016 consolidation range breaks .

RIL

SBI : Supportive

  1. Has a penchant for V shaped rallies

SBI

Happy trading and dont worry about the long weekend.


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