Detailed Nifty Analysis 13 Nov 12

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2009 – 2012. You cannot analyse sound spectrum because it is Random & Non-repetitive.

You cannot analyze something like this. Pattern failures become frequent, trade bandwidth squeezes, confidence reduces. This was happening in Nifty since years now. Traders said goodbye to markets, number of participants got reduced. Noise in market increased, profitability got reduced. People started believing in Khabris lot more. Technicals weren’t performing.

Observations.

Extremely sharp double tops @ 6354

Higher lows

Indian Market has been range bound since years. The range is 4500-6300

Summarizing:

Market has been rangebound - Both on medium term (4500-6300) and on longer term (6300-2200).

There have been sharp double tops at 6300 zone, which are nowhere seen in history. Despite a sell off post the wave (1200-6300 : year 2003-2008), to 2200 and a rebound, there

are higher lows consecutively without fail. Note that 6300->2200->6300->4500 is no wave and just a pattern.

6300

2200

4500

Case 1:

Triangle formation. If markets have to move up, then this is the most probable formation. Per this, Nifty should not break lifetime high decisively and should continue to move below that. There will be higher lows, which would further narrow the trading zone.

Once 6300 is taken, expect massive upside, maybe of 1500-2000 points on Nifty.

Trigger Point: 6300 zone.

Case 2:

C&H formation. The move of 6300 to 2200 and 2200 to 6300 was a V shape one. The bottoms give only slight points which match with C&H, but they do. So there can be possibility of this too. Per this theory, lifetime should soon break BEFORE making another lower high, and thereby causing a big rally.

Trigger Point: 6300 zone.

Case 3:

W formation. The 6300-4500, 4500-5600, 5600-4700 moves resemble to a W in formation.

Per this, there would be an upmove which could be as bigger as the fall 1800 points (tgt 6500) or this could be limited to 6300 only (because of stiff double tops). If 6500 comes, this would activate C&H pattern, which could spark a major rally.

Trigger point: None. Its active.

The Projections.

DOW JONES

DOW JONES is moving in a decent, constant and symmetrical upper channel since 2009 (<7000 levels) to cmp 13579, unlike India.

There was a resistance created between the channel support and mid-channel, leading to a rising wedge. This has broken now, opening gates for

upside, which should take it to 15200 (hoping lifetime high won’t cause much of a problem).

Supports: 13050, 12100. SL 12000.

Summarizing

There was a long period of nothingness in the market which seems to be over now. Even though Nifty was almost there where it was, ALMOST ALL the drivers of previous rally (2003-2008) have retired and have been on a constant and stiff downtrend. These stocks might move up, but the dominant trend will remain down.

Indeed, engines of Nifty have completely changed. There are stocks like Asian Paints, and major stocks like RCOM are now out of Nifty. Come what may, when you look at stocks, you don’t understand – How is Nifty not at 3000??

The old dying horses have been replaced by new young ones who haven’t had their day yet. The show must go on.

Summarizing

History tells us that whenever a major movement happens, there is an eventual sharp correction (which marks the end of that up leg), followed by a rangebound movement for YEARS.

In 1991-1995, Harshad Mehta worked upon Nifty, and made it rally 400% in short time. Then it crashed. But what happened? It fell just 50% of 400% rally, and then stayed in that zone for years. Economy continued to perform and stock prices didn’t, which led to a correction in valuations. This is called Time-Wise correction.

The same has been happening this time around. 1200-6300 (in 5 years) was Nifty’s entry into an entirely new zone. To bring down valuations, it can’t fall totally. Hence time-wise correction happens. Hence this nowhereness.

Summarizing

Economic situation is mysterious, nothing can be believed. Data is changed overnight. Scandals worth staggering 40% of total India’s fiscal budget have happened. Nothing can be said, hence nothing can be analyzed, hence no comments on that.

Technically, to summarize: 6300 zone is important. Its likely that 6300 might come eventually (SL 5555), but even if it comes, its nothing extraordinary, because its just the 3 year range top. Yes, if it breaks past 6300, then the real game will start… If it breaks it this time directly, the rally would quick but would not last that long. If it bounces back from 6300 and consolidates further, then I expect rally to be much stiffer and stronger. It depends on timing entirely.

Dow Jones is bullish.

All these slides are copy paste from old PPT file. Because long term still holds. Today the idea is not

to just analyze Nifty in short run, but more.

Real game begins now.

1995 – 2008

It “was” a growing market. People used to buy, and hold it. If their stock

moved up, they booked profit. If dipped, bought more. “SL” What

stoploss?

2008 - NowPeople were heavy long when the

biggest ever fall happened. They were leveraged. Not only this resulted into a huge loss, but it also gave a lesson to

all – ALWAYS KEEP SL. Now you suggest a stock, and the first thing the other

person asks – What is the SL?

95% loose.This is market. 5% of the people make

95% of the money. If 100% people start doing the right things, will all

100% make money? No. Why? Who will pay for these 100% people?! The same happened with “SL”. It’s a right

thing, but not now.

SL, TGT HIT!

Does this happen with you more frequently now? Stocks first break SL and then move up. Shorts first move up, give a dreadful spike then move

down? Right??

Analysts.Till 2006, only few knew about

Analysis. Most of the people had their own logics derived by their own

observations. Till 2006, person who knew technicals was great. But not

anymore… Now knowing analysis isn’t enough. Success now depends a lot on “Noise” (spikes). The more noise you have, more SL, hence more failures.

0000000000.

There are many more zeroes than heroes in this market now. Most of the

scrips are dead. Heroes of yesterday are zeroes of today. Zeroes of

yesterday are heroes of today. Because every stock moves up but only once in

a lifetime. Because you can’t fool public twice. Today number of scrips to buy are very less. And these less ones

sound scary! You can’t give a Pizza company too much of valutation, isn’t it? Economy isn’t junk to move on junk

food stocks.

Nifty Vs StocksLook at Nifty. It gives you a feeling – “AAL IJ

WELL” But when you look at stocks, you don’t. Only a few stocks have charts headed

North East. TCS for example is one such great mover. Cement stocks are another

example. But what about Reliance LT BHEL Infosys Bharti SBI Relcap Tatasteel and

many others? Nifty is standing dangerously on only a few scrips. Weightages are

changed overnight. Infosys falls 10% and Nifty closes in green!

Nifty Vs Stocks

Stocks in midcap and small cap have literally become penny stocks. You have IFCI back to 20-30, RCOM at 50 (only ), LITL at 9-10, GMRINFRA at 20-25, Unitech at 25 so

on and so forth. Adlabs which traded at 2000, is now 70 Rs only. No there is no

bonus/split . And no theatres and multiplexes (bigcinema) are not shut! Pop

corn still sells at same high premium.

Then what?

Few PlayersNot only the number of scrips moving up

have reduced, the number of players have also gone down. Death of Mutual Fund

industry has made it completely dry. Mood swings of these key few people can give

wild swings in market. High handedness of these few people has considerably

increased. High cost of essential items too have contributed severely to this dryness.

This has caused a possibility of much bigger role of OPERATORS.

So in short:Summarizing, the problem today is that few

people have all of the money (and hence power too). Market breadth is super

narrow and number of bullish scrips are only few. These few scrips give a lot of false

breakouts and breakdowns. The scrips which are in a great bull run look dubious at

the best. Dissimilarity of movements between Nifty and Large Caps does give a

strong sense of disbelief in the system.

STAR NEWS ab ban gaya hai ABP News.

Trader ab ban gaya hai Producer, for English Vinglish.But WHY?

We have pointed out the issues that have cropped up in this market since many months. But what is the solution? Should we also start producing movies?

No. After lot of detailed research, we have found 5 ways of making money in this kind of market.

We will discuss them in next few slides. Today the discussion is not where Nifty will go? But how to trade Nifty/Scrips.

Hope you like them!

y=mx + c

Price

Gradation

Lag adjuster

Strategy 1: Create a virtual scrip

Asymmetrical, Full of noise, Risky, has wild swings.

Comfortable trading it? Probably No.

Symmetrical, Beautiful, Low in noise, Safe, Bullish.

Comfortable trading it? Hell Yes.

Out of the 4 issues: Nothingness (no trend), Noise (spikes), Foul play by operator, Bogus scrip, we have

countered all 4.

We have created a new scrip based on an underlying A grade F&O scrip, which no operator can ever

dream about! Hence there is no foul play, much less spikes, self hedged scrip. The same trendless chart

looks much better after treatment. Like it?

Strategy 2: Trade all moves

It is possible to defeat the nothingness and pattern failure by trading all the moves. Fake breakouts will still make you loose but overall it will be profitable.

It will give multiple trades per day.

Strategy 3: Invest into great upcoming businesses

You can invest into all the multibaggers. Investing in multibaggers has its own risk and rewards. Risk is

that you never know will this company ever perform or not. If it works out, your money will multiply by 10-15 times, if not it will be zero. The other way to

investing is by investing into great companies available at relatively cheaper prices. Remember –

Investing and trading are different things.

Strategy 4: Do what operator says.You can do that. But then you are ruled by somebody

else. Would you like doing that? And what is the guarantee that the operator will remain genuine

with you forever?

Strategy 5: Old classic – Average!

Our elders do it. They have made money by using this strategy. Yes stocks have went to places in their

time, hence this strategy worked, but does it work even today?

Yes it does. Identify a bullish scrip and buy any upmove. If it falls, average. Hold till the last hope

(support). %Risk increases, but success probability increases a lot too.

Its not just to aim, you must also hit your target! We have been putting up slides on analysis which always emphasized on making money by trying to find out “what will happen”. That we will continue to do probably forever.

But now we would also focus on “what to do”. Last few years have been very taxing for Indian investors and traders and hence its time to stand up and fool the operators.

Join https://www.facebook.com/YesIcannnn We will put up innovative ideas based on all the 5 ways on this page.