27-12-2013

Technical Analysis Review

Review_27/12/13 - ( Rating - 9/15 ) Positive - High Risk - Rupee is Appriciating / Nifty on verge of Breaking out into Bull Market / AD is -ve / TRIN is -ve / Net 52 WK Hi/Low is -ve / Bonds is +Ve (--) Big Picture is Netural. | 0 is extreme -ve | 1 is -ve | 2 is Netural | 3 is +ve | 4 is extreme +ve |

Indian Rupee - ( 3/4 ) Rupee Breakout from Ascending triangle Pattern (Consolidation Range was from 58.932 to 61.230 on 15-08-2013) Upto 67.59 (27-082013) & $ is in a Bull Maket v/s Rupee Depreciation.Rupee had Retracement from Top to 61.44 on 03-10-2013. Rupee was consolidating into a Range at Demand Level from Weekly Timeframe.Rupee has given a fresh Breakout from Range on 06-11-2013.

Supply Zone at 1) 69.228 (68.860) 68.578 2) 64.074 (63.669) 63.206 Demand Zone are at 1) 61.154 (60.720) 60.373 & 2) 59.368 (59.044) 58.688

It is Notable that $ Index has Given a Breakout from Weekly Demand Zone & $ is expected to Raise against all Currencies (Trouble 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 & upset the Financial world.

Nifty - ( 3/4 ) 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)

Previous Highs of 5742.29 (14-08-2013), 6077.79 (23-07-2013) 6142.25 (19-09-2013) & 6189.35 (18-10-2013) is broken on Upside & Price is at Life time High of 6353 (01-112013) & Parabolic Upmove has been Sucessfully Sustained after creating a Higher Low at 5701.54 (01-10-2013) & After Inverse H&S Breakout above 6116 Price closed below 6076 (28-10-2013) Trend reversal can occur if Lower High is Put by Price Supply Levels is - 1) 2) 6354 (6228.45) 6187.80 Demand Levels are 1) 6133 (6100) 6102 2) 5807 (5791) 5780 3) 5755.28 to 5714.63 4) 5550.13 (5506.50) 5474.97 5) 5276.86 - 5211.20 6) 5128.09 (5079.67) 5032.70 7) 4842.27 4770.73 Dimensions Price Major Trend line break from Historic Pivot Highs of 6154 - 6134 is broken on the Up side & retesting the Trendline break from above (with Possibility of breakdown),Measured up move of Break of Ascending Triangle is Very high at 7782 (38.2%) (Very Difficult - Down Side Break is very Low 3345 (50%) & 2864 (61.8%)) Volume Volumes are in increasing Trend.In Dec series Nifty future shed 6 lakh position in Open Interest and this accounts to -3.27 % of Total Open Interest in Dec series.The Nifty Dec series is trading at 18.1 Rs premium to Underlying . In derivative cumulatively for all series contract Nifty future net added 16.02 lakh position in open interest and this accounts to 5.94 % of Total Open Interest in all series and cumulatively trading in average premium of 63.57 Rs to Underlying. Indicators OSMA +Ve Trend - Slow Stochastic +Ve Trend - ADX -VE Trend Open Intrest (OI) Record updated for-.Dec/30/2013-NIFTY FUTURE-CMP(6372.05) is currently in BULL trend.In Jan series Nifty future added 7.87 lakh position in Open Interest and this accounts to 3.99 % of Total Open Interest in Jan series.The Nifty Jan series is trading at 58.25 Rs premium to Underlying . In derivative cumulatively for all series contract Nifty future net added 8.88 lakh position in open interest and this accounts to 4.27 % of Total Open Interest in all series and cumulatively trading in average premium of 97.87 Rs to Underlying. NIFTY PCR (Position Wise) - 0.85 & (Money Wise) - 0.19

Sentiments Sentiments are now Caustious as current Breakout has Broken out into Life time High but retraced, Due to Sharp Upmove Traders are forced to cut their Short Position,A Break on Upside from Weekly Inverse H&S & Monthly Ascending Triangle Indicates Supreme Power for Bulls.Risk Reward would be favourable on Bull Side. Earnings are mostly expected to be -ve TIme After Previous F&O expiry (@ 6278.90 ) Nifty could now build Short Position due to Sharp Pullback Rally.. Nifty's 56 Day Cycle (23-12-2013 Trend continued up ) (Next Date 17-02-2013 Expect Downtrend )--> Mid month Reversal ( 12-12-2013 was a Down Day ) (Next Date 14-01-2014) Quaterlies Settlement is on 3rd Friday (20-12-2013 was Bullish) (Next Date 21-032014 Expect Bearish Retracement) P & F Chart Rare Double top & Inverse H&S Neckline Breakout @ 6200 --- New Support 6150 & Resistance 6300 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 Decreased strength in Up trend & Line is still Low on the Curve hence it is Positive for Uptrend. Midcaps are Raising with inclining 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 0.8 & 0.7 indicated reduced Strength in Uptrend & space for more stocks to Decline even tho Nifty is Rising,The series of Higher Lows in SMA10 of TRIN can be Restored.

NSE Net Monthly High & Low (0/1) 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 for a 2nd Time indicating Strength in Up Trend.The "Peaks of stocks Hitting 52 Week High" Should increase for strong Up 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 is below 20 indicating Complacancy. Fear/ Volitality is decreasing with Up Trend indicating strength...Volume is also High.... Indian Bonds (3/4) 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 Compleing Pullback in Uptrend. Correct Relation of 30Y ROI > 10Y ROI > 3Y ROI is achived (Caution Money is Moving to Short term Bond Market from Share Market indicates Weekness in Economy & Flight to safety ) .. . 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 Consolidating in Downtrend, Commodities Crude Has Broken Down ( Bulltrap was set for ascending Triangle breakout on weekly chart ), Post Pullback, Gold has Pullback as $ Moved Down ... ( Equity Markets Rally has Dangers Due to Reduced Economic Growth (& Reduced Commodity Demand) & Geo Political Tensions are reducing,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 Currency that has Reached Demand Zone & Hence Some Currencies are Reaching Supply Zone. Japan Yen Aussie $ are Depriciating & Market are trying to Rebuild (Distribution) after Fed's Stance of Re Tapering in QE & Budget Deal, Hints at Liquidity Reversal is on Hold (Market is Build Gains on Good News) ..... 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 Fresh Breakout (Markets are Distributing Stocks on Good News Markets are now Ferouscliously Selling.Europe CAG DAX are Near Resistance & FTSE have given Fresh Break out (Global Markets are Now breaking out of Resistance. Syncronisation in Breakouts is seen after Creating consolidation Patterns.But Global Liquidity is Drying,interest Rates are increasing ..All Equity Markets are on Risk ON Mode

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The Mighty 10 Index - Top Sector & Index weighted % Wise ( 0/10 ) Extremely Negative INDEX HDFC DBD from weekly supply Zone to Test 200 SMA - Golden Cross - Y FINANCE ICICIBANK DRB from Daily Demand Zone - Death cross - Y ENERGY RELIANCE RBD from Daily Supply Zone - Golden Cross - Y IT INFY RB into weekly Supply Zone - Golden Cross - Y FMCG ITC DBD into weekly Demand Zone - Golden Cross - Y AUTO TATAMOTORS DBR into Daily Supply Zone - Golden Cross - Y PHARMACEUTICALS SUNPHARMA DBD from Daily Supply - Golden Cross - Y CAPITAL GOODS L&T Innverse Cup & Handle into Daily Supply - Death Cross - Y METALS TATASTEEL RBR into weekly Supply - Golden Cross - Y CEMENT ULTRACEMCO RBD From Weekly Supply Zone - Golden 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.