13-09-2013

Technical Analysis Review

Review_13/09/13 - ( Rating - 1/15 ) Extreme Negative - High Risk - Rupee is Breaking Down / Nifty on verge of Breaking into Down trend (Stage 4) / AD is -ve / TRIN is -ve / Net 52 WK Hi/Low is -ve (--) Big Picture is Extremely Negative. | 0 is extreme -ve | 1 is -ve | 2 is Netural | 3 is +ve | 4 is extreme +ve |

Indian Rupee - ( 0/4 ) Rupee's Breakout on All timeframes from Ascending triangle Pattern ( Consolidation Range was from 58.932 to 61.230 ). Measured Move Target of 61.734 has been achived & As $ is at lifetime High v/s Rupee, $ has entered a new Bull Maket in Rupee Depreciation.. Rupee has exceeded Measured move target & 100 % @ 66.386 Rupee has given a Fresh Breakdown from Top (Near Lifetime Highs) creating a Fresh Supply Level & has taken out previous important Swing Low of 65.705. Rupee is at a Demand Level. Supply Zone at 1) 69.228 (68.860) 68.578 Demand Zone are at 1) 64.074 (63.669) 63.206 2) 61.154 (60.720) 60.373 & 3) 59.368 (59.044) 58.688

It is Notable that $ Index is at Demand Zone & is breaking out of Weekly Ascending Triangle, $ is expected to Raise against all Currencies (Double Wammy for Rupee) Also With Growing Crises senerio Green Buck (has been considered to be the Hedge (Preferred Vehicle For Cash). (* Note : This time around, This Process is Going to Hurt the Instution the Most.Time will Prove this Historic Process would FAIL & set the Cat among the Pigeons & set the Financial world into a Hole.

Nifty - ( 0/4 ) Move From 4500 (19-12-2011) to 5631 (22-02-2012) is Uptrend & there was retracement upto 4761 (61.8% Retracement) upto 05-06-2012 Market Restarted Uptrend from 4761 (05-06-2012) to 6110 (29-01-2013) There was correction from 6110 (29-01-2013) Upto 5477 (10-04-2013) After Entire Move from 5477 (10-04-2013) to 6229 (20-05-2013) There was correction in Uptrend (as Higher Low is formed at 5570 on 25-06-2013 after Neckline of 5950 of Fresh H & S is Broken Measured Decline is upto 5700 (78.6 % Rectracement of 5477 to 6229) Lower High Lower Low Trend (Down Trend from 6229 (20-05-2013) to 5565 (24-062013). Retest & Double Top Was From 5565 (24-06-2013) & Ended at 6077.79 ( 23-072013 ). Another Lower High is Created at 5742.29 (14-08-2013)

Current High of 5742.29 (14-08-2013) is broken with a pullback from Previous Demand Zone of 5128.09 (5079.67) 5032.70 , Trend Line Test is expected @ 6226.35 & 6093.35 ( Previous Tops ) & Price is expected to fail & Move Down Supply Levels are - 1) 5550.13 (5506.50) 5474.97 2) 5755.28 to 5714.63 3) 5720.59 (5706) 5897 - 4) 5807 (5791) 5780 Demand Levels are 1) 5276.86 - 5211.20 2) 5128.09 (5079.67) 5032.70 3) 4842.27 4770.73 Dimensions

Price Major Trend line break from Historic Pivot lows of 2532 - 4534 - 4775 was broken on the down side ( Trendline Break is Now Tested) Now Measured move of Break of Ascending Tringle is very very Low 3345 (50%) & 2864 (61.8%)

Volume Volumes are in increasing Trend.In Sep series Nifty future shed 16.15 lakh position in Open Interest and this accounts to -9.33 % of Total Open Interest in Sep series.The Nifty Sep series is trading at 25.3 Rs premium to Underlying . In derivative cumulatively for all series contract Nifty future net shed 14.17 lakh position in open interest and this accounts to -6.64 % of Total Open Interest in all series and cumulatively trading in average premium of 63.7 Rs to Underlying. Indicators MCDA +Ve Trend RSI +Ve Trend

Open Intrest (OI) NIFTY FUTURE-CMP(5875.9) is currently in BULL trend . Yesterday the trend was CONFUSION TREND . The open interest is not increasing with trend so be careful. In options activity mainly confined to lower puts even though put/call ratio is high.The Nifty Call option is trading at premium so market is expecting bullishness NIFTY PCR (Position Wise) - 1.33 & (Money Wise) - 0.38

Sentiments Sentiments are now negative as clear Down trend has emerged, Due to Sharp Pullback Traders are forced to cut their Short Position,Once Trend Resumes, Panick will get created for getting out of Long Positions Risk Reward would be favourable on Sell Side. Earnings were mostly -ve are expected TIme After Previous F&O expiry (@ 5409 ) Nifty has now build huge Short Position is being covered due to Sharp Pullback Rally.. As per Nifty's 56 Day Cycle Trend changed to up after (02-09-2013) & Now Expected to Reverse to Down side with Momentum (+56Days) ( Next Date 28-10-2013 )..... Mid month Reversal date of 13-092013 ( Sudden Red Candle Appreaed with shift in Momumtum )..... Quaterlies Settlement is on 3rd Friday of 20-09-2013..... Bear Market downtrend has start after Nifty has closed below the Swing of 5955 (16-07-2013) P & F Chart High Pole warning Occured on 13-09-2013. There is Resistance at 6050 / 6000 & Support at 5450 / 5400.Strong Pullback in Downtrend. Breadth Charts - ( 0/3 ) (Rating 1 for Each +ve) Advance Decline Line (0/1) If the Nifty is rising but the number of stocks advancing is dropping, then the trend is in trouble and may pause soon or even reverse. AD Line is Not Rising with increase in Nifty, indicates Strength in Down trend But some Balance in AD needs to be achieved. Midcaps are Falling with Deciling Momentum ( After Recovery from Over Sold Levels ) But some Large caps & All Index Heavy Weights are Declining with Huge Momentum & Breakdowns

Trader's Index (TRIN Chart) (0/1) To Incorporate Volume of Advance Decline Analysis - TRIN is unusual in that it moves opposite to the Nifty TRIN is a ratio where 1.0 means selling and buying pressure are equal TRIN BELOW 1.0 (More Volume in stocks that are advancing) & Above 1.0 (More Volume in stocks that are Declining SMA Trin is Between 0.9 & 0.8 indicates Declining Strength in Pullback uptrend & space for more stocks to Decline even tho Nifty is Rising,The series of Lower Highs in SMA10 of TRIN is Intact & indicates -Ve strength

NSE Net Monthly High & Low (1/1) More Stocks in the index making new highs versus new lows if Number is Reducing Trend is in Trouble.The Rising New Highs indicate Markets Buying pressure is accelerating (Environment & Trend) is Positive There is a downward slope as "Valleys of 52 week Highs" has been broken on upside indicating Declining strength in Down Trend. The "Troughs of stocks Hitting 52 Week Lows" Should increase in case of strong Down Trend

India Vix Volatility Index (or Fear Index or VIX) is a weighted measure of the implied volatility.Market Makers hedge the market Play, the Down Volume is always a factor & used in Direct Corelation with the VIX & They Together have Indirect corelation with Index ie Vix & DVol is Down; Market will move Up AND Vix & DVol is Up;Market will move Down.Indirect relation between Vix & DVOL leads to Sidewise Index VIX after Breaking out from the 18 level to a 52 week High of 23.64 ( Breaking out 52 WeekRange). Fear/ Volitality is increasing with Down Trend indicating strength in stage 4.Pullback has taken it Down to 27.81...Volume is also High.... Indian Bonds (0/4) Indirect Correlation with Stock Market; Money Flows from Bonds to Stock for Short term Maturity (Mkt Goes up) & Vice Versa. Shorter Period = Lower Rate (Controlled by Centeral Bank & Indirect relation to Stock Market) + Longer Period = Higher Rate (Controlled by Market) All Bonds indicating Double Top. 3 Year Rate is Higher than 10 Year Rate (Caution Money is Moving to Short term Bond Market from Share Market indicates Weekness in Economy & Flight to safety ) .. Correct Relation is 30Y ROI > 10Y ROI > 3Y ROI. Under Asset Rotation from Risk on (Equity Market) to Risk off (Bond Market Security Backed by Govt) & with Devalution of Rupee the Dollar Outage is gaining strength ( Increase of Returns in 100% Govt secured Bonds).Also Yield Returns in India are more than corrosponding Bonds in Developed Markets. 10 Y 30 Y 3Y

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Commodities (Negative Correlation) $CRB has made a Double top & Distribution Pattern, Commodities Crude is in uptrend but Bulltrap was set for ascending Triangle breakout on weekly chart,Post Pullback, Gold has broken Down again ... ( Equity Markets Rally has Dangers Due to Reduced Economic Growth (& Reduced Commodity Demand) & Geo Political Tensions are also increasing,Now Commodities are to Resume Down Trend as Major banks are set to Move out of Physical Commodity Markets. (Excess Supply Over Demand) Group 1 - Oil + Gas -> 33% Weight Group 2 - Natural Gas + Metal + Corn + Soya -> 42% Weight Group 3 - Others -> 25% Weight

Currency Markets (Positive Coorrelation) Dollar is the Only Appriciating Currency & has Reached Demand Zone (Breakout of Ascending Triangle on weekly Timeframe) & Hence Some Currencies are Reaching Supply Zone. Japan Yen Aussie $ are Depriciating & Market are trying to Rebuild (Distribution) after collapse has caused Panik across Globe after Fed's Hints at Liquidity Reversal (Market failed to Build Gains on Bad Reports & has Declined on Good Reports as it fuels Concern on Reduction in Liquidity (QE Reversal)..... Hence Global markets are in Risk Off Mode .. Currency War has Reached Phase II where Every Currency (Developed & Other Emerging Mkt Currencies ) are depreciating against $ to take advantage of investment in safe Govt Secured Bond

World Markets (Positive Coorrelation) Chinese Recover is Slow with raised concerns on liquidity & Devalued Yunan & US Markets has weekly Breakdown (Markets are Distributing Stocks on Good News are now Ferouscliously Selling.Europe CAG DAX & FTSE have given Fresh Breaking Downs (Global Markets are Now at Resistance. Syncronisation in BreakDowns is seen after Creating Double Tops.Also Global Liquidity is Drying,interest Rates are increasing ..All Equity Markets are on Risk OFF Mode

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The Mighty 10 Index - Top Sector & Index weighted % Wise ( 0/10 ) Extremely Negative INDEX HDFC DBR from Demand Zone to Test 200 SMA - Death Cross - Y FINANCE ICICIBANK Pullback from weekly Support - Death cross - Y ENERGY RELIANCE Up from Bottom of Range - Golden Cross - Y IT INFY Creating a Double Top - Golden Cross - Y FMCG ITC In Downtrend Pullback (Up From Weekly Support) - Golden Cross - Y AUTO TATAMOTORS Top of Range into Weekly Supply Zone - Golden Cross - Y PHARMACEUTICALS SUNPHARMA Right Shoulder @ Weekly & Retest of Top Done (With Lower High) Golden Cross - Y CAPITAL GOODS L&T Pullback in Downtrend (Up From Weekly Support) - Death Cross - Y METALS TATASTEEL Pullback from Lows in Downtrend - Death Cross - Y CEMENT ULTRACEMCO Pullback in Downtrend (Up From Weekly Support) - Death Cross - Y
NB: These notes are just personal musings on the markets, trends etc, as a sort of reminder to me on what I thought of them at a particular point in time. They are not predictions and none should rely on them for any investment decisions. Readers Discretion Expected. Advocate to Consult Your Financial Advisor before any Investment as Investment in any market may be Lost in its Entirety. Strictly for Entertainment Purpose Only.