March 06, 2013

May not be Deep Trouble

Last time I posted NIFTY Chart, it was October 2012, NIFTY around 5600-5700 and things looked very positive then. Our optimism was not for nothing as NIFTY made high above 6100 and looked all set for more. However, looking at the present chart, there are signs of trouble. See below;

Weekly Chart:


Daily Chart:


US S&P 500:


First about the NIFTY. It has broken the channel after a nice run up. It is stationed between 50 MA and 200 MA now and it is basically in no man's land. After looking at many things I am still not totally convinced that we are in a downtrend. Sure, the correction has been deep but it is not unusual. There have been headwinds in terms of macroeconomic indicators like GDP growth figures, Purchasing Manager Index (PMI) showing slowdown in growth and lack of good news. At the same time there is little positive as in a rational (and not populist) budget, steps to spur growth and some respite in S&P 500 chart.

All in all, 5555 which is around 200 MA is a key level for NIFTY. We may see a play around and may be even test of this level before we get a clear picture.

S&P 500, as you will recall, I think has close relevance with NIFTY is slightly more comfortable though it may be due for a small correction. It definitely seems to be in a better shape than when we last saw it in October. However major risk seems to in terms of US Dollar. It seems to be gearing up for a short to medium (or even long) term top after which a correction becomes due.

What follows with a Dollar correction is a spike in commodity prices including Oil, Precious Metals like Gold, Silver and also Industrial Metals. This strokes inflation around the World and it can spell trouble for the fragile growth that India is aiming for.

I am still trying to catch up with many things. Being away from Markets have given me a fresh perspective and also my thinking is not clouded by barrage of information which sits in subconscious. I will keep looking for some firm cues to find out any trades. At this point, I think it may be a good idea to pick and choose some blue chips for investment purpose. I am having a re-look at some of my long term investments and will try to post more on that. I hope you won't mind if I post some idea (my thoughts) for long term investment rather than positional trade. Anyway I will be looking for Derivative trade also and it may just beat the investment idea to the next post. Whatever it is, it shall come soon.

12 comments:

  1. Ohh hoooo u are back!! thanks for that analysis sweety!!!

    So chweet of you

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  2. See thats a trader!! A promise made is a promise fulfilled..... thanks for the post

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  3. thnaksfor the info buddy

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  4. Nice reading......

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  5. Oh ho good observations.. trader... So nifty was up .. the going down now,,,, where do u see nifty in next one month time... pls share ur thoughts

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  6. markets are heading whihch way.. now?/ some post pls

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  7. You made some good points for Chart.Thanks for posting this informative article.

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  8. Reliance has lined up Rs 1.5 lakh cr capex to be spent in its various business verticals in the next three years, of which 85 % would be in oil, gas and petchem businesses, RIL in the firm's 39th annual general meeting. The company has submitted a development plan for KG-D6 R-Series and is targeting development of over 4 trillion cubic feet of recoverable resources.

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  9. Gap down opening were witness in Nifty but bulls did not wait much and soon replied. Uptrend in Nifty future start around 5880 kept the trend till the Nifty future made high around 5970. Bulls definitely show strength but in last hour of session bears were found more aggressive and hammer bulls and closed below 5950.

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  10. Thanks for those informative charts. I think those troubles are just temporary.

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  11. Its very important to bring the market strategy in the commodity saving as it gives a better interest in the market to make a good nifty market analysis.
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