Mid-session outlook(24-02-2011)

Only weak market was told many times in Pre-open outlook today and same is being seen during trading hours immediately after opening today. Rally started on 11-02-2011 is finished after Libyan internal problems and testing possibility of 5177 is high now. Intraday voltality may be seen but Indian markets will remain weak today and in the coming sessions.

Libyan Turmoil fused Indian Market Rally

Pre-Open Market Outlook(24-02-2011)

The turmoil in Libya heaped further pressure on stocks around the world yesterday as investors worry that the global economic recovery may be derailed by the sharp rise in oil prices and swelling inflation. Fear of spreading Libyan revolt in other neighbouring countries is so high that all the global markets has started to melt and Indian markets are also not saved and seems that 11th Feb 2011 begun rally has been fused and lower levels expected in Indian markets also after Libyan unrest broken out. As down move fear was expected therefore following lines were told immediately after opening in Post-open outlook yesterday despite positive trading Indian markets:-

"immediate up move confirmation range is 5490-5515 and if Nifty sustains above 5515 then it will be confirmation of Indian markets up moves"

Intraday charts of last 2 sessions are showing selling within 5460-5515 and until Nifty will not sustain above 5515 till then any rally can not be imagined despite whatsoever Budget-2011-2012

Intraday chart showing last 2 Days Selling within 5460-5515:-

(Just click on chart for its enlarged view)

Clear selling in last 2 sessions and sentiment is also completely depressed and slipping possibility is also high therefore supports will be watched:-

1- 5410-5415(minor support,its breaking down and moves below 5400 expected)
2- 5310-5340(Gap on 14-02-2011)

Above mentioned supports are not strong and will be blown over after any negative mood after Budget and slipping below 5310 will mean testing possibility of 5177.

Opening to closing within 5385-5460 expected after flat to Weak opening today.

Nifty(Feb Fut)-Trading Strategy for 24-02-2011

H6 5510     Trgt 2 
H5 5493     Trgt 1
H4 5476     Long breakout 
H3 5455     Go Short 
H2 5448
H1 5441
L1 5428
L2 5421
L3 5414     Long 
L4 5393     Short Breakout 
L5 5376     Trgt 1 
L6 5359     Trgt 2

Trading Levels for 24-02-2011

Nifty Spot- Levels for 24-02-2011 

R3 5547
R2 5521
R1 5479
Avg 5453
S1 5411
S2 5385
S3 5343

Nifty(Feb Futures)- Levels for 24-02-2011

R3 5557
R2 5529
R1 5482
Avg  5454
S1 5407
S2 5379
S3 5332

Nifty(Mar Futures)- Levels for 24-02-2011

R3 5567
R2 5538
R1 5490
Avg  5461
S1 5413
S2 5384
S3 5336

Bank Nifty(Feb Futures)- Levels for 24-02-2011

R3 11051
R2 10964
R1 10814
Avg  10727
S1 10577
S2 10490
S3 10340

Nifty(Mar Fut)-Trading Strategy for 24-02-2011

H6 5519     Trgt 2 
H5 5501     Trgt 1
H4 5484     Long breakout 
H3 5463     Go Short 
H2 5456
H1 5449
L1 5434
L2 5427
L3 5420     Long 
L4 5399     Short Breakout 
L5 5382     Trgt 1 
L6 5364     Trgt 2

Bank Nifty(Feb Fut)-Trading Strategy for 24-02-2011

H6 10902     Trgt 2 
H5 10848     Trgt 1
H4 10795     Long breakout 
H3 10730     Go Short 
H2 10708
H1 10686
L1 10643
L2 10621
L3 10599     Long 
L4 10534     Short Breakout 
L5 10481     Trgt 1 
L6 10427     Trgt 2

Post-open outlook(23-02-2011)

Opening is not weak today morning and immediate up move confirmation range is 5490-5515 and if Nifty sustains above 5515 then it will be confirmation of Indian markets up moves. Mentioned range will be watched first for any type of Indian markets rally confirmations.

Libya Internal Problems and its impact on Indian stock markets

Pre-Open Market Outlook(23-02-2011)

Last 6 days trading range is 5410-5600 and Indian markets are discounting Union Budget,Global markets crash and Libya internal problem within this range. Rally started from 5178 on 11-02-2011 but after eruption of Libya internal problems uncertainities increased in Middle East countries because there has already been anti govt. agitations in Yemen and Algeria and such revolts possibilities can not be ruled out in other neighbouring countries also after successful change of power in Tunisia and Egypt. As Petroleum supply may be interrupted due to all these developments therefore its rates hike and adverse impact on global economy is worrying factor and global markets reacting it with sharp declines.

Indian markets out performed global markets yesterday and were less than 1% down while other Asian markets closed with 1% to 2.6% loss and Dow's Futures was trading 133 points down. Market does not like uncertainities and rally begins after its end. This fact should always be kept in mind that rally started in Indian markets after the end of Iraq war on 28-04-2003.  Crude is at 30 months high,it will certainly hamper global sentiment and markets therefore delay of rally is possible but denying signals are not seen yet.

Last 6 sessions trading range is 5410-5600 and this range forceful break out as well as sustaining beyond will tell Indian markets final reaction on Middle-East problems and Union Budget. Indian markets are preparing within mentioned range and last 3 sessions technical positions are as follows:-

1- Rally started on 11-02-2011 corrected sharply from 5600 on 18-02-2011 and candle was Engulfing Bearish candle.
2- Correction completion strong indication after base fornation within 5415-5445 on 21-02-2011.
3- Trading within 5440-5515 with Bearish Harami candle on 22-02-2011.

Last 3 Days intraday chart:-

(Just click on chart for its enlarged view)

It is clear from above intraday charts that there is clear supports at lower levels and resistances at higher levels and Indian markets will prepare for break out of last 3 days range. Expected first trading range of today is 5430-5480 and its forceful break out and sustaining beyond will give next move first strong indication. As sentiment is turning most depressing therefore moves below 5430 and 5400 may be seen and if Nifty sustains below 5400 then sharp declines will be seen. Until Nifty is sustaining above 5400 till then bullish hopes will remain alive and bullish market confirmation point is sustaining above 5558.

Market will react to global sentiments,markets and US futures also in the same manner as happened yesterday therefore today closing can not be guaranteed but expected that Nifty will trade most of the time between 5430-5480 and either close within this range or above it.

Nifty(Feb Fut)-Trading Strategy for 23-02-2011

H6 5562     Trgt 2 
H5 5541    Trgt 1
H4 5520     Long breakout 
H3 5495     Go Short 
H2 5486
H1 5478
L1 5461
L2 5453
L3 5444     Long 
L4 5419     Short Breakout 
L5 5398     Trgt 1 
L6 5377     Trgt 2

Trading Levels for 23-02-2011

Nifty Spot- Levels for 23-02-2011

R3 5595
R2 5557
R1 5513
AVG 5475
S1 5431
S2 5393
S3 5349

Nifty(Feb Futures)- Levels for 23-02-2011

R3 5609
R2 5564
R1 5517
AVG 5472
S1 5425
S2 5380
S3 5333

Bank Nifty(Feb Futures)- Levels for 23-02-2011

R3 11877
R2 11438
R1 11639
AVG 11200
S1 11401
S2 10962
S3 11163

Bank Nifty(Feb Fut)-Trading Strategy for 23-02-2011

H6 12101     Trgt 2 
H5 12036     Trgt 1
H4 11970     Long breakout 
H3 11905     Go Short 
H2 11883
H1 11861
L1 11818
L2 11796
L3 11774     Long 
L4 11709     Short Breakout 
L5 11643     Trgt 1 
L6 11578     Trgt 2

Pre-closing outlook(22-02-2011)

Nifty moved below 5450 but did not sustained below it and recovered fast therefore bullish hopes are still alive despite crashing global markets.

Mid-session outlook-2(22-02-2011)

Dow's Futures trading 133 points down and Asian markets closed with 1% to 2.6% loss. European markets also trading from .63% to 1.5% down after yesterday sharp fall. Although Indian markets outperforming at this moment with less than 1.5% down trading but sentiment is completely depressed due to global markets crashing like situation.

Today candle will be bearish Harami after Engulfing Bearish candle last Friday. Today trading range 5450-5515 and sustaining below it will mean neutralising the impact of yesterday base formation and moves below 5400 will be seen.

Mid-session outlook(22-02-2011)

Market spiked before the announcement of JPC formation and slipped after its announcement. Market is reacting many sentiments:-

1- Libya internal problems
2- Global markets crash
3- Union Budget
4- Devivative Expiry

Technical positions are as follows:-

1- Rally started on 11-02-2011 corrected on 18-02-2011.
2- Correction completion strong indication on 21-02-2011 after base fornation within 5415-5445.
3- Higher bottom formation today but slipped from higher levels also.

Although slipped from higher levels but technically bullish formations also today therefore rally hopes are still alive despite last Friday sharp correction and Libya internal problems.

Trend confirmation range of today is 5470-5515 and its break out should be watched.

Global crash but Indian markets will react Budget Expectations

Pre-Open Market Outlook(22-02-2011)

Following lines were told in Mid-session outlook yesterday. As relevant therefore being repeated today:-

1- "Market is quiet within 5433-5468 since opening today and forceful break out of this range will give first indication of those moves which will laid the foundation of post Budget moves"

2-"Just wait for sustaining beyond of mentioned range(5433-5468) for next and possibly post budget moves confirmations"

Nifty moved below 5433 without force and could not sustained below therefore 5468 broken out with force and sharp surge seen yesterday. It is confirmation of bottom formation between 5415-5445 after last Friday correction. Next up move(rally) confirmation point is forceful break out or sustaining above 5558 because after this:-

1- Intermediate term trend will be up.
2- Inverse Head and Shoulders Neck Line will be broken out.

Last 2 sessions intraday chart showing market preparation:-

(Just click on chart for its enlarged view)

Asian markets are crashing after sharp declines in European markets and US futures(Dow 85 points down) therefore Indian markets will open weak and will trade within 5460-5510. As base formation yesterday within(5415-5445) therefore complete selling requires to break it down and not expected that Nifty will dip below it easily. Indian markets are eyeing on Budget-2011 and will prepare according to post Budget expectations only. Intraday trading will be effected from global sentiments today but real moves will be seen after budget according to preparation today and within this week.

JPC formation announcement expected during trading hours today and immediate market reaction will be watched. Confirm consolidation yesterday and its continuation amid depressed global sentiment will mean confirm crossing of 5558 in the coming sessions and it is expected also.

Weak opening,firstly trading and post budget preparation within 5460-5510 and finally flat closing expected today.

Nifty(Feb Fut)-Trading Strategy for 22-02-2011

H6 5658     Trgt 2
H5 5628     Trgt 1
H4 5598     Long breakout
H3 5563     Go Short
H2 5551
H1 5539
L1 5516
L2 5504
L3 5492     Long
L4 5457     Short Breakout
L5 5427     Trgt 1
L6 5397     Trgt 2

Bank Nifty(Feb Fut)-Trading Strategy for 22-02-2011

H6 11393     Trgt 2
H5 11318     Trgt 1
H4 11243     Long breakout
H3 11156     Go Short
H2 11127
H1 11098
L1 11041
L2 11012
L3 10983     Long
L4 10896     Short Breakout
L5 10821     Trgt 1
L6 10746     Trgt 2

Trading Levels for 22-02-2011

Nifty Spot- Levels for 22-02-2011

R3 5671
R2 5598
R1 5558
AVG 5485
S1 5445
S2 5372
S3 5332

Nifty(Feb Futures)- Levels for 22-02-2011

R3 5702
R2 5620
R1 5574
AVG 5492
S1 5446
S2 5364
S3 5318

Bank Nifty(Feb Futures)- Levels for 22-02-2011

R3 11499
R2 11299
R1 11184
AVG 10984
S1 10869
S2 10669
S3 10554

Pre-closing outlook(21-02-2011)

Mentioned range(5433-5468) broken out by force after good base formation between 5415-5445. Now next crucial level is 5558 and expected that Nifty will move above it as well as will give strong up moves confirmations.

Mid-session outlook(21-02-2011)

Market did not showed enthuciasm on resolving of JPC issue and Presidential address and trading with small losses. Market is quiet within 5433-5468 since opening today and forceful break out of this range will give first indication of those moves which will laid the foundation of post Budget moves.

Market has to prepare for any side moves and let this process complete. Just wait for sustaining beyond of mentioned range(5433-5468) for next and possibly post budget moves confirmations.

Rally confirmation First Point- 5558

Weekly Analysis- 21-02-2011 to 25-02-2011

Following conclusive lines was told in Weekly Analysis- 14-02-2011 to 18-02-2011 and that proved 100% true:-

"Pull Back rally/Relief rally/Bounce back is very much due and that will be seen in the coming week"

Following events will be closely watched by Indian markets and its results will decide Indian stock markets next immediate moves:-

21 Feb - Budget Session of Parliament begins
21/22 feb- Govt decision on JPC
24 Feb - Feb derivative expiry
25 Feb - Railway Budget-2011-2012
28 Feb - General Budget-2011-2012

Wave-5 started on 11-02-2011 from 5177 and its first 6 sessions moves are as follows:-

1- Firstly 422 points rally completed in first 6 sessions.
2- As very short term indicators were overbought therefore
3- 38,2% correction(almost) of last 5 sessions rally seen in last 6 session(last Friday).

Initial 5 sessions rally has been corrected upto 38,2% level last Friday and confirmation required that correction has been completed or not. Next immediete retracement levels are as follows and it has to be decided that correction has been completed at 5442 last Friday or may correct upto following levels:-

38.2%- 5437
50.0%- 5388
61.8%- 5338

2 following bullish formations developed in last 5 sessions:-

1- Falling Channel break out
2- Inverse Head and Shoulders Formation and Neck Line is at 5558

1-Falling Channel Chart:-

(Just click on chart for its enlarged view)

2-Inverse Head and Shoulders Formation:-

(Just click on chart for its enlarged view)

If Nifty does not dip below upper line of Falling Channel and cross Neck Line(5558) of Inverse Head and Shoulders then that will be strong rally expectation point and first confirmation level will be sustaining above 200-Day EMA(today at 5617). Next resistances are as follows:-

1- 5640-5780(Strong resistance)
2- 5800-5860(Strong rally above 5860)
3- 6150-6180
4- 6240-6320

Market will face strong resistance between 5640-5860 and crossing 5860 will mean worst is over and fast strong rally eruption.

Conclusions

Short term trend is up,long term trend is down. Intermediate term trend is sideways and struggling for direction. Decisive confirmation of intermediate term trend will show clear trend to Indian markets because intermediate term trend will be up at 5556 and Inverse Head and Shoulders Neck Line is at 5558. Nifty sustaining above 5558 will mean strong up move because:-

1- Intermediate trend will be up
2- Trend reversal  Inverse Head and Shoulders pattern will get confirmation from its neck line break out.

Bottoming out confirmation point of last Friday started correction is required first and sustaining beyond last 4 sessions most time trading range(5460-5500) will give next immediate moves confirmations.

3-First trend deciding Range Chart:-

(Just click on chart for its enlarged view) 

As per my view Nifty will trade first within last Friday range and will consolidate as well as prepare for post Budget up moves. Sustaining above following levels will be watched one by one for next up moves confirmations:-

1- 5500
2- 5556/5558
3- 200-Day EMA(today at 5617)
4- 5780
5- 5860

5558 should be watched for first strong upmove confirmation point. As per my view Nifty will sustain above 5558 after some more consolidations in next couple of sessions and then rally will be seen.

Coming 6 sessions are full of events and will be highly volatile also therefore intraday charts formations and their micro analysis will only be able to give first confirmation of Post Budget Indian stock markets. Cautious trading positions must be taken after minute analysis this week intraday charts.