Review on Monthly, Weekly and Daily NIFTY charts

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Dear Investor,

Very difficult time to predict any kind of move from stocks. One thing that prevents me from saying that market will go down is the fact that this market has so much buying power. Unimginable buying pressure has been exhibited months after months after month. Begin at monthly highest range, we should expect some profit booking. Earnings season is underway and people are selling stock good news or bad news. They are booking their profits.

I added bollinger bands indicator this time. It measures the amount of volatility in market. Orange color river like bands are indicators of how move larger move is happening on the stock or index. When the bands come very very close, that means there is very less volatility in the market. It depends on the scale you look at. For monthly scale it measures how much month to month volatility. So monthly bands are less volatile than daily or weekly bands. What is important to notice is "when the bands are coming closer that is a indicator of base building and anticipation of a big major move is about to begin." Only thing that it does not tell you is which direction - UP or DOWN?

Above monthly chart is showing NIFTY support is at 5015. Volume is all green indicating constant accumulation. Bollinger bands coming together is sign of new big move might be on the charts.

Above NIFTY weekly chart shows that weekly activity is high. Volality is high. Bands are expanding. Another problem I see is we ae neer that top of the river band this is where stocks reverse and again meet back at the center line. Based on this Weekly support for NIFTY is 5650. Healthy volumes on up side have to be noticed.

Here is the conclusive daily chart. Do you see how much the bands have come together. This is a signal of new major move in happening. UP or DOWN is not predictable. Daily Support for NIFTY is at 5506.

Observe the rea and green volume lines. There is very little volume on down days and observe green volume lines. There is so much buying power. This makes it difficult to predit next move. The best we can say is market will consolidate in 6000-5500 range. You buy at 5500.

I am putting Siemens on watchlist so that you all can learn and study the effect of bolliner bands. See how the bands are pinched together. Lets see after few weeks if a large move actually happens.

This week G20 Currency meeting will shape some trading of next week.

Thanks
Anil
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Vote for Naryanan Krishanan for CNN Hero

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Dear Investor,

Naryanan Krishnan has brought more than 1.2 million hot meals to India's homeless and destitute through his nonprofit

http://www.cnn.com/SPECIALS/cnn.heroes/archive10/naryanan.krishnan.html

We work day in day out for ourselves. Its time to respect what Naryanan has done for community. Click above link and vote for him.

Thanks
Anil
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Please forward this email to your friends and family members to help them build wealth under technical stock market guidance.Disclaimer: Please trade with your own judgment or with the help of investment advisor. We are not responsible for any financial losses.Stop Loss: Sell Stock if it closes below this price. It tells you that market has proved you wrong. Accept it.
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Downtrend Confirmed..Kind of

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Dear Investor,

Downtrend in NIFTY has been confirmed by last four trading sessions. We will have few bounce back days but we need to be careful now since the short term downtrend is taking hold. The downtrend will end with a panic sell off day where everybody turns a huge seller. This is just of temporary top formation process. Downtrend prediction will be void if we manage to close about the downtrend line

Money flow has turned negative after a very long time. FII are still the net buyers. Mutual Funds continue to sell. If this correction takes hold I expect a deep correction. Reason for such a expectation is that lot of excited buying has already taken place. Those with quick gain expectations have been if trapped will not be able to hold when the correction deepens. There will be a day where they will loose their patience and panic sell off will happen and the same day bottom will be in place.

There is no gurantee that correction will even happen that deep. This will still be a bull market correction to be used to buy when the bottom is in place. Lets give it some time to put in a proper bottom before jumping end.

Good Luck to All

Thanks

Anil

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email:indiastocktrend@gmail.com

Please forward this email to your friends and family members to help them build wealth under technical stock market guidance.Disclaimer: Please trade with your own judgment or with the help of investment advisor. We are not responsible for any financial losses.Stop Loss: Sell Stock if it closes below this price. It tells you that market has proved you wrong. Accept it.

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Serious Selling Last Week

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Dear Investor,

Well, I do not really have to tell this. You all know it since you watch the market very well. After last weeks trend line break we saw three distribution days where people did some selling. I do not think those were really panic selling days. Volume of selling was really weak. We have now entered a range on 6000 - 6200. If market manages to break this small downtrend then we will see break above 6200. Its consolidating in this range. Volume is not supporting the downside yet. But I see serious deterioration on individual charts. Basically profit booking is happening in full swing.

Bull market corrections do happen. Just it happens after retail investors jump in. That is why, I always suggest the idea of investing in small chunks and adding more when the market proves you right. If you have to invest Rs 10000 then only buy Rs 1000 worth stock and see if it actually holds the value for few days at least. Usually when the retail investor jumps in that is a very end of the rally. somehow, that has been track record. Then they sell in panic towards the end of sell off and then watch the market go up again. Usually they are out of money to buy near the bottom of rally.

I am not suggesting go all out and buy put options or short the market. Its hard to decide that just now. This market has lot of buying power. We have seen that in past 4 dips. There is lot of support. What you will find it that the stocks you bought are not holding. Its not just you. Its all of us.

When playing with fire like the full on bull run, expect the burning to be part of it. Any close below 5950 is a strong indicator that correction has arrived and will continue for few weeks at least. There is too much demand for stocks so I am not sure of breaking that level.

As I told you last two weeks were interesting to watch because earning season just kicked off. Now we will know in coming week if it was a bull trap or a real bull.

Thanks
Anil
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email:indiastocktrend@gmail.com
Please forward this email to your friends and family members to help them build wealth under technical stock market guidance.Disclaimer: Please trade with your own judgment or with the help of investment advisor. We are not responsible for any financial losses.Stop Loss: Sell Stock if it closes below this price. It tells you that market has proved you wrong. Accept it.

Possible Breakout Stocks

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Dear Investor,

Please add following stocks to your watchlist

There is a great possibility of these stocks returning quick return in next couple of months. Its not a buy recommendation rather a lesson on what one should look for before buying stocks for long term investment. This week is very interesting from all perspective especially from bullish sentiment. I will be watching these guys and you can watch them too.

In bull markets best buying points are upon pull backs. We do not get longer lasting pullbacks in today's environment. Somehow the cash capability of individuals and mutual funds is very strong. That is why money rushes back into securities. Stocks may not be as overvalues as we think. Stock in thousands might be new reality we need to accept.


Thanks
Anil
Got a Question/Send your contributions for other members:
email:indiastocktrend@gmail.com
Please forward this email to your friends and family members to help them build wealth under technical stock market guidance.Disclaimer: Please trade with your own judgment or with the help of investment advisor. We are not responsible for any financial losses.Stop Loss: Sell Stock if it closes below this price. It tells you that market has proved you wrong. Accept it.

First Close Below Upward Trend Line of Sep 2010

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Dear Investor,

First sign of tiredness was seen last Friday Oct 08 2010. Well Quantitative Easing fever is not done yet. Gold is almost at new record high and similarly most of the stocks are at their record high. I was hoping to see the break of up trend line last week, now lets see how it plays out in coming week. clearly some fear is returning but not so much yet. We need constant closing in red one after other to induce the fear factor into this market which appears to be ready to pick everything on sell. We can't blame anybody, this has been a fears bull which knows only one way and that is up.

Few bars below trend line will define next immediate direction. For all practical purposes Uptrend is not officially over. The bull is full on.

 I link unusual activity in Mercator Lines. It has build very long base and has big resistance at around 80. It should be on your watchlist. It could break out and run very quickly.

Thanks
Anil
Got a Question/Send your contributions for other members:
email:indiastocktrend@gmail.com
Please forward this email to your friends and family members to help them build wealth under technical stock market guidance.Disclaimer: Please trade with your own judgment or with the help of investment advisor. We are not responsible for any financial losses.Stop Loss: Sell Stock if it closes below this price. It tells you that market has proved you wrong. Accept it.

Add Videocon to portfolio

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Dear Investor,

The buying spree continues. As expected more people are forced to buy in. Dollar is getting trashed and Gold is a treasure for people. Until this equation changes FII will pour money. They are expecting more cheap dollar to flood the market and hence buying what their dollars can buy today. The end is not going to be happy though.

Please add following stocks to your watchlist

Adding 50 VideoCon to my portfolio just based on the chart. Don't blame me if corrects because there is a possibility of it.

Added more funds to JHS holding since it is holding well.

Thanks
Anil
Got a Question/Send your contributions for other members:
email:indiastocktrend@gmail.com
Please forward this email to your friends and family members to help them build wealth under technical stock market guidance.Disclaimer: Please trade with your own judgment or with the help of investment advisor. We are not responsible for any financial losses.Stop Loss: Sell Stock if it closes below this price. It tells you that market has proved you wrong. Accept it.

History 10 years ago, 1 year ago and todays market

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Dear Investor,

This week we should just let the market do its thing. Sit outside and watch the show. Its going to be very hard week on both sides. There is continued pressure on investors to put their money into market. It is very hard to have cash and not see it growing. especially in current market situation where there is no end in site. Day after day market only goes up. So the risk is virtually not there. I am not moving away from my theme of EXPECT CORRECTION. It will happen but does it mean you do not invest at all. Well that is not right. Not investing is never a good choice.  Well, investing today will definitely going to test your patience. If you are selective in buying things might workout better for you otherwise there will be blood on the streets. There is a saying "When there is a blood on street, you buy property". In our case it will be we buy shares.

There is no sign that current rally has ended. In fact it is inviting more and more investors, getting them excited about the never ending rally and believe me they are coming in with all the cash they have. The MANIA is still not full on. If the rally continues like this we will see the MANIA unfold by end of this month.

I found very interesting correlation between today's market and market 10 years ago.

Following is a NIFTY chart from 1996 till Sep 06 where the new rally began which is running till date

Is it mere a chance that the month was SEP 2006. I don't know. If we observe correctly markets tumbled in SEP-OCT of 1999 and it rallied harder until SEP-OCT of 2000. After that it took 4 years before market rallied back to its old high. You know the month, SEP-OCT 2004. It paused at that level for three four months and then corrected 30%. It is that correction after which those investors have only seen gains in their portfolio.

Lets look at NIFTY today

After 2004 correction NIFTY only corrected in 2008 SEP-OCT along with global meltdown. That correction was exactly the same as previous 2000-2004 correction. Only thing different is 2008 correction was faster and old one was slower.

We have completely retraced the correction. We are at a juncture where a correction needs to be expected. at least to 4770. That will be the true golden point of entry if History has to repeat.

Question I do not have answer for is what to do when the correction happens, If it ever comes. Should hold on to loosing positions in order to buy more laters? I am not sure, but that is what I intend to do with my positions.

Now about history just a year ago - 2009 SEP-OCT

You can see in above chart that exactly in SEP-OCT 2009 market correctly. Question remains is will the history repeat this time?

Following NIFTY SEP-OCT 2010 that is todays market

There is no end of this rally. It continues its march up with no resistance in line now. There is no need to feel sad if you missed the rally. There are more individual stocks which are getting ready to move higher. In fact, this market action has given me more faith on bullish side than any other rally till date. If we can hit this target then I guess every correction is a buy. I am not announcing that correction will arrive. but I am planning for what to do when it arrives. You can't fix your past actions but must plan for future. You need a strategy for that otherwise you will end up taking emotional decisions and then suffer.

Now lets look at stocks which are just getting ready to breakout. There is good buying pressure on these. I am not planning to do any buying in next two weeks unless there is MANIA developed where people will pay any price for any stock. That is like shooting in the dark, you will hit some and miss some.

BL Kashyap

Delta Corporation

Dhampur Sugar

My action plan is to watch the show next two weeks. Thank you for your readership and survey answers. It keeps me going.

Wish you good luck and peace.

Thanks

Anil

Got a Question/Send your contributions for other members:

email:indiastocktrend@gmail.com

Please forward this email to your friends and family members to help them build wealth under technical stock market guidance.Disclaimer: Please trade with your own judgment or with the help of investment advisor. We are not responsible for any financial losses.Stop Loss: Sell Stock if it closes below this price. It tells you that market has proved you wrong. Accept it.