January 31, 2017

Market outlook

Daily charts
- markets close in negative
- AD was negative, VIX marginally positive
- today was first day of lower high lower low
- upto 2 such days are allowed
- option writing resistance 9000

Budget: India's Got a Reputation Problem

One of the least enviable jobs in the world at the moment has to be that of Indian finance minister. Arun Jaitley will present his fourth annual budget to India’s Parliament on Wednesday amid terrible headwinds -- mostly caused by his government’s bewildering and disruptive decision to invalidate 86 percent of India’s currency last November. If he’s to revive growth, the first thing he has to do is rethink his priorities.

The scale of the challenge should be clear. The government’s official estimate of 7.1 percent GDP growth this financial year (which began in April) is widely doubted and doesn’t take into account the chaos wrought by demonetization. The International Monetary Fund predicts growth will come in closer to 6.6 percent, or a full percentage point below earlier estimates. And these numbers conceal even more weaknesses. Most glaringly, Indian investment has shrunk for the last three quarters for which reliable data is available.

Read more at https://www.bloomberg.com/view/articles/2017-01-29/new-budget-must-address-india-s-reputation-problem

US markets: previous resistance now offers support


Ditto for the DJIA


January 30, 2017

Some buy sell signals today

Market outlook

Daily charts
- trend is up on daily charts
- today, NF closed flat
- AD was negative, VIX up 4%
- close below 8600 can lead to correction
- option writing resistance 9000

Neowave analysis of markets

We wondered if the rally would be a new up-move OR just an x-wave. To decide on this, we considered 61.8% levels as crucial. We also wondered if it could be crossed before Budget.

Last week’s rally has taken out the 61.8% level, just ahead of the Budget coming out 1st Feb, i.e. on Wednesday of the fresh week. It, thus, also crossed the “Neckline”, achieved “Double Bottom” projection and gone above the “Turbulence” area of 9-11th Nov’16.

It, therefore, appears the rally from Dec’16 is indeed a new up-move and not an x-wave. The “x?” label is, accordingly, removed.

.....

If 21-month Neutral Triangle is over, then its last leg, i.e. “E” leg from Sep’16 to Dec’16, should be fully retraced in faster time. Thus, the final confirmation of a new up-move would require move above Sep’16 high, and that too, by Mar’17.

A move out of a Neutral Triangle (NT) can achieve 75% ratio to the largest leg of the NT. The largest leg was “D” leg from Mar’16 to Sep’16. A 75% ratio to “D” would project about 30500 (Nifty 9500), a new high as we have been arguing.


Read more at http://content.icicidirect.com/ULFiles/UploadFile_20171301121.asp

Elliott Wave Counts of Nifty on All Time Frames – Long Term Outlook

This Elliott Wave analysis report of Nifty is specially prepared covering wave counts on all time frames with medium/long term outlook of Nifty and some important points useful for Elliott Wave Theory learners.

Elliott Wave Theory is a never ending wave’s cycle starts from the birth/beginning of any financial script. Nifty born in 1995 and we need to see chart covering move from 1995 for Elliott Wave theory analysis and move after 1995 can be seen only on monthly chart. So, let’s start from the beginning.

Read more at http://sweeglu.com/elliott-wave-counts-of-nifty-on-all-time-frames-long-term-outlook/

Island reversal on Nifty?

Possible if we have a gap down opening AND the gap does not filled this week.


January 29, 2017

Barrons: Dow 20K now next stop 30K


The financial magazine which has made an art out of calling for big, round numbers in the Dow Jones Financial Index (as a reminder over 20% of the Dow's surge since the election is due entirely to Goldman Sachs), most recently with its "get ready for Dow 20,000" call from just over a month ago, has done it again:

While there are still those - pretty much anyone who still cares about fundamentals - who are scratching their heads at Dow20K, according to Barrons "the Dow hitting 20,000 was no fluke. Today’s stock prices are well supported by solid prospects for corporate earnings and economic growth."

In fact, Dow 30,000 is just around the corner... well by 2025. All President Donald Trump has to do, according to Barron's, is "avoid stumbling into a trade war—or a real war." Some of the profound insight behind this forecast so reminiscent of the infamous "Dow 36,000" prediction which hit just around the time of the last market bubble.

Clearly, part of the propulsion behind stocks has been the Trump administration and its flurry of business-friendly edicts. If Trump can succeed in reducing regulation and lowering corporate taxes, stocks should surge further this year. An additional 5% or even 10% gain in 2017 wouldn’t be surprising. Our projection of 30,000 by 2025 is based on our analysis of historical data provided by Jeremy Schwartz, director of research at WisdomTree. This data, which looks at stock market returns for rolling five-year periods dating back to 1871, suggest stock market gains will fall below the market’s typical annual gain of 6% after inflation in the next five years before accelerating above the average in the years after that.

Then again, perhaps Dow 30,000, which would require China to inject in at least another $30 trillion in debt in the next decade without somehow hitting the Minsky moment tipping point, is not so certain: it all depends on whether Trump can avoid war, either literal of metaphorical:

Read more at http://www.zerohedge.com/news/2017-01-28/barrons-cover-next-stop-dow-30000-one-condition


January 28, 2017

Hot stocks and charts

LAST updated: 27-JAN-2017 

Simple rules

  • This information is for your study only and is not a recommendation to buy or sell.
  • Consider trend as UP when a stock gives a breakout above last month's high
  • To lock in gains, use a trailing SL (last month's low or last 2-3 weeks low)
  • Expect half the trades to (statistically) fail so manage the risk management in every trade
  • Limit risk per trade to maximum of 1% of your capital
  • In case of narrow ranges, consider the bigger / previous trading range as breakout levels
  • Pay attention to large bar breakout days or one day large reversal bars.

Experts: US markets to tank 10-20% if Trump becomes President

In reality, markets blasted 10% up from the moment it was clear . The box shows the election results date.

A similar event happened when Brexit happened... the panic the event caused was an excellent 'buy on dips' event for smart money.

There is nothing wrong with an "expert" being wrong. Everyone is wrong sometime or the other (this includes calling someone an expert).

The problem is in following an expert and making the assumption that he/ she knows everything.

On a related note, we now have DOW above 20K... an all time first... thanks to Trump?


BANK NIFTY to retest all time highs?


NIFTY weekly charts: on the way to retest 9000


January 27, 2017

Market outlook

Daily charts
- trend is up on daily charts
- today, NF closed 0.5% in positive
- AD was flat, VIX up 5%
- option writing support 8400
- expecting lot of resistance around 8730 spot

PMS Motilal Oswal’s 2016 Returns

January 26, 2017

Hot stocks and charts

LAST updated: 25-JAN-2017 

Simple rules

  • This information is for your study only and is not a recommendation to buy or sell.
  • Consider trend as UP when a stock gives a breakout above last month's high
  • To lock in gains, use a trailing SL (last month's low or last 2-3 weeks low)
  • Expect half the trades to (statistically) fail so manage the risk management in every trade
  • Limit risk per trade to maximum of 1% of your capital
  • In case of narrow ranges, consider the bigger / previous trading range as breakout levels
  • Pay attention to large bar breakout days or one day large reversal bars.

January 25, 2017

Market outlook

Daily charts
- trend is up on daily charts
- today, markets closed 1.5% in positive
- close was handsomely above 8500
- trend reversal level is 8300
- option writers are bullish with highest OI at 8400 put.
- high possibility of markets doing timepass in FEB

January 24, 2017

Market outlook

Daily charts
- trend is up on daily charts
- today, markets closed almost 1% in positive
- AD was average, VIX down 4%
- close was at 10 days high
- option writing resistance 8500 (FEB series)
- increasing swing reversal level/ SL from 7900 to 8300 for long trades

January 23, 2017

Neowave outlook of markets

By conventional Technical Analysis, however, “Island” area usually proves a significant resistance for the future market action. As we argued last week, “no further upsides can open until the ‘Island’ is taken over”.

An “Island” gets created when Index jumps with a gap-up and after some time, drops with a gap-down, matching that gap-up area. It is a rare but significant chart development. Index respected the “Island”, and failure to cover it finally resulted in a net loss last week.

....

PHARMA stocks... weekly charts showing supports

AUROPHARMA


Market outlook

Daily charts
- trend is up on daily charts
- today, NF closed within range of last 4-5 days
- closing was positive, AD 2:1, VIX flat
- fast close above 8500 can signal more upsides else rangebound

Elliott Wave Outlook of Nifty for Jan 2017 Expiry Week

Nifty opened mild gap down at 8404 and bounced to register day’s high 8423 but failed to sustain at higher levels and declined sharply by more than 80 points to register day’s low 8340 before closing 85 points down at 8349. Nifty broke 8344-8461 range after 5 sessions.

Friday, 8344 was the point below which we can think of any reversal and 8461-8490 was expected on upper side and trading strategy was to buy on dips using stoploss 8343.  Nifty broke 8343 on Friday after a long consolidation and now we needs to have a fresh look at latest chart as there is abnormality in previous pattern.

Today I am covering bounce from 26 Dec 2016 low 7893 and earlier wave counts are explained in my previous analysis report Elliott Wave Outlook of Nifty for 11 Jan 2017 Onward.

Read more at http://sweeglu.com/elliott-wave-outlook-of-nifty-for-jan-2017-expiry-week/

Advantage of using option chart over futures chart

Options decay and they lose their value over time... this is irrespective of the movement of the underlying.

Using option charts for exits provide a faster way to close a trade - this is specially useful when markets are rangebound and you have a position in any OTM option.

Look at this 15 min chart of nifty futuers (I use 15 min charts for positional trades)

January 22, 2017

CNX PHARMA technicals

- trend is down on daily charts
- holding above 10600 will be bullish

- note; trend is down on weekly charts


CNX IT technicals

- trend is up on daily charts
- reversal level is close below 10000

- note: trend is down on weekly charts

January 21, 2017

BANK NIFTY weekly charts

- some signs of weakness in BNF as it struggles to hold above 18800
- expect lots of rangebound movement between 18000 and 19000


NIFTY weekly charts

- this week nifty traded in a range within previous week's bar
- note that last week's bar gave a good breakout and close above 8300
- but this week there was no follow thru buying
- we  have strong resistance around 8500-8600 level
- next week, close below 8200 can mean trend reversal and retest of recent lows




How Demonetisation Has Derailed The Hawala Route

The heat of demonetisation has been felt heavily by the hawala users and its operators. As per the reports of Central intelligence agencies, the call traffic by hawala agents in India has dropped by 50 per cent. There have been several reports of busted hawala rackets across India. The people who were running these rackets were involved in illegal conversion of old currency notes. Some RBI officials were also held for facilitating them.

The demonetisation move has certainly impacted the hawala system. But how long is this impact expected to last? Because of limited record keeping and undecipherable coding of each transaction, it is intricate to intercept the hawala transfers. Therefore, the challenge before the intelligence agencies is to track the trail of money which are transferred through hawala. This is especially an arduous task for agencies involved in counter-terrorism efforts. Intelligence agencies should be provided with sophisticated technologies to help them succeed in this. Although demonetisation has hit hawala operations, there are several reports on their revival too. One should therefore understand that demonetisation is not a checkmate to hawala, rather it is a checkpoint. There are more such measures which are necessary to curb such underground systems and to keep them in check. The current political leadership seems to have understood this.

In total, this is a transition from an untraceable to a traceable system of functioning, an investment for a better tomorrow.

Read more at https://swarajyamag.com/ideas/on-the-hawala-trail-demonetisation-has-done-its-bit-but-more-needs-to-be-done

PMS Alchemy Capital’s 2016 Returns

January 20, 2017

Sell signal on NIFTY 15 min charts

- we got the first buy signal around 8000 levels in last week of DEC
- today, we got sell signal on break of 8385F
- a cool profit of 300+ points on positional trades.

- SL for short trade is 8460 F.
- caution: next week is expiry week so time decay will be fast
- high chance that NF may favour option writers and not buyers




Market outlook

Daily charts
- trend is up on daily charts
- today, markets closed 1% in negative and below the crucial level of 8380.
- AD was negative; VIX up 5%
- today, we also got a sell signal on 15 min charts
- option writing levels not clear

US Media to Trump: we will set rules, not you

We Will Set Rules, Not You, US Media Tells Trump in Open Letter ...

www.news18.com/.../we-will-set-rules-not-you-us-media-tells-trump-in-open-letter-1...
2 days ago - In this December 28, 2016 file photo, President-elect Donald Trump talks to reporters at Mar-a-Lago in Palm Beach, Florida. ... Washington: The American Press Corps, White House journalists, in an open letter to President-elect Donald Trump has said that it is the reporters and not ...

January 19, 2017

India sector performance: returns snapshot

Market outlook

Daily charts
- trend is up on daily charts
- today, markets closed marginally in positive
- AD and VIX was flat
- strong resistance around 8500-8600 levels
- option writing support 8000

Elliott Wave Analysis and Outlook of Nifty for 19 Jan 2017

Nifty opened flat at 8403 and bounced sharply to register day’s high 8460 but failed to sustain at higher levels and declined back by more than 60 points to register day’s low 8397 before closing 19 points up at 8417.

Yesterday, same 8344 was the point below which we can think of any reversal and 8461-8490 was expected on upper side. And trading strategy was to buy on dips using stoploss 8344 and minimum targets 8461-8490. Think of selling only after break below 8344. Nifty bounced as per expectation but didn’t break previous high 8461 and declined back. Let’s have a fresh look at latest chart for further scenario.

Today I am covering bounce from 26 Dec 2016 low 7893 and earlier wave counts are explained in my previous analysis report Elliott Wave Outlook of Nifty for 11 Jan 2017 Onward.

Read more at http://sweeglu.com/elliott-wave-analysis-and-outlook-of-nifty-for-19-jan-2017/

Position sizing is the most important part of any system

January 18, 2017

Market outlook

Daily charts
- trend is up on daily charts
- today, markets closed marginally in the positive
- AD was flat, VIX closed marginally in the negative
- last 4 days, markets trading in a tight range
- support formed around 8370.

NIFTY futures swing reversal level on 15 min charts


January 17, 2017

Market outlook

Daily charts
- trend is up on daily charts
- today, markets closed marginally in negative
- AD was flat; VIX up 2%
- option writing support 8300
- good support formed around 8370 spot

China going broke may spook the markets?

“China is going broke. This statement comes as a shock to those who have heard over and over that China is a rising economic superstar and will soon be the greatest economy on Earth, surpassing the U.S. in the No. 1 role.”

How can China be going broke? Jim peeks beneath the surface:

China started 2015 with about $4 trillion in hard currency reserves. About $1 trillion fled the country in 2015 and 2016 based on fears of yuan devaluation. That’s classic capital flight.

Another $1 trillion is relatively illiquid, including direct investments in mines and natural resources through sovereign wealth funds such as China Investment Corp. That’s wealth, but it’s not money that can be used in a liquidity crisis.

Finally, $1 trillion has to be held as a precautionary reserve to bail out China’s insolvent banks and Ponzi-style “wealth management products.” Failure to bail out the banks… could lead to social unrest that would topple Communist rule, so that won’t be allowed.

“That,” says Jim, “leaves only $1 trillion of the original $4 trillion in liquid form.” And if it keeps jettisoning dollars at this rate, “China will be devoid of useable liquid assets by late 2017.”

Those are the stakes. Which brings us back to another possible devaluation…

Read more at https://dailyreckoning.com/china-may-soon-shock-market

January 16, 2017

Neowave outlook of markets

The bottoms made during Nov-Dec’16 were similar, i.e. 25718 & 25754 (7916 & 7894 on Nifty), and therefore, they looked like a “Double Bottom”, which is a reversal formation as per conventional Technical Analysis.

The high between these 2 bottoms, i.e. high of 9th Dec at 26804 (Nifty 8275), was crossed in Jan’16, which is a conventional method to confirm a “Double Bottom”. The height of such a Double Bottom can be projected as possible upside, and same would also calculate to levels similar to 27800 (Nifty 8560), close to the 61.8% level marked on the charts.

The 61.8% level is also close to Neckline of Head & Shoulder formation we had marked as Sep’16 top reversal formation. Index, remember, broke this Neckline in Nov’16, and achieved downside projected on the basis of height of the H&S formation.

The 61.8% level is also close to the high of 10th Nov’16 at 27743 (Nifty 8598), where Index went into a huge “Turmoil” immediately after the Trump Victory and Demonetization. Remember, Index lost 1685 pts overnight on these news flows, recovered 1835 pts by 10th Nov, only to drop to a new low thereafter.



Read more at http://content.icicidirect.com/ULFiles/UploadFile_2017116105154.asp 

Market outlook

Daily charts
- trend is up on daily charts
- today, markets traded in previous day's range
- AD was flat, VIX up 4%
- option writing support 8300-8000, resistance 8500
- expect correction to start below 8370 spot

Fresh Elliott Wave Counts and Outlook of Nifty for 16 Jan 2017

Nifty opened gap up on Friday at 8457 but failed to sustain at higher levels and declined sharply after opening. Nifty declined more than 80 points from day’s high 8461 to register day’s low 8373 before closing 6 points down at 8400.

Friday, 8344 was breakeven points and minimum 8454-8499 range was expected on upside. And Intraday shorts were suggested if “Nifty achieves 8454” and “trades below opening price at 9:31 AM” using stoploss day’s high (made till 9:31 AM) expecting minimum downward target 8380-8344 and hold for next day only if Nifty breaks below 8344. Nifty achieved 8454 at opening and was trading below opening price at 9:31 AM and then achieved intraday target 8380, trade closed Intraday because 8344 was not broken. Let’s have a fresh look at latest charts for further scenario.

Today I am covering bounce from 26 Dec 2016 low 7893 and earlier wave counts are explained in my previous analysis report Elliott Wave Outlook of Nifty for 11 Jan 2017 Onward.

January 15, 2017

Will The CIA Assassinate Trump?

It isn’t just that Donald Trump routinely thumbs his nose at the establishment, insults media figures he sees as unfair and bucks conventional wisdom.
It is that President-elect Trump is defying the will of the deep state, military industrial complex base of ultimate power in the United States. That is why he is treading dangerous waters, and risks the fate of JFK.
Trump publicly dissed the intelligence community assessments on Russian hacking; they retaliated with a made up dossier about the alleged Trump-Putin ‘golden shower’ episode.
While it may be a silly falsehood, it may also be serving as a final warning that they get to script reality, not him.
Perhaps they want Trump to feel blackmailed and controlled by alluding to fake dirt, while reminding him of the real dirt they hold on his activities (whatever it may be).
Insulting the credibility of the intelligence community in a public way – as the man elected to the highest office in the land – is liable to ruffle a few feathers, and it could provoke a serious response.
Trump knows the power of the people he is taunting, but he may not be aware of where the line is between play in political rhetoric and actually irritating and setting off those who control policy.
There is plenty of Trump misbehavior that can be simply written off, or trivialized, but cutting into the war and statecraft narrative of the shadow government steering this deep state is a deviation too far.
It is one thing to play captain, but another to imagine that you steer the ship. They are happy for Trump to take all the prestige and privileges of the office; but not for him to cut into the big business of foreign conflict, the undercurrent of all American affairs, the dealings in death, drugs, oil and weapons, and the control of people through a manipulation of these affairs.
If President Trump takes his rogue populism too far, he will suffer the wrath of the same people who took out Kennedy… there are some things that are not tolerated by those who are really in charge

Rise of the machines: Driverless Shuttles Hit Las Vegas: No Steering Wheels, No Brake Pedals

navya-lv
There’s a new thrill on the streets of downtown Las Vegas, where high- and low-rollers alike are climbing aboard what officials call the first driverless electric shuttle operating on a public U.S. street.

The oval-shaped shuttle began running Tuesday as part of a 10-day pilot program, carrying up to 12 passengers for free along a short stretch of the Fremont Street East entertainment district.

The vehicle has a human attendant and computer monitor, but no steering wheel and no brake pedals. Passengers push a button at a marked stop to board it.

The shuttle uses GPS, electronic curb sensors and other technology, and doesn’t require lane lines to make its way.

“The ride was smooth. It’s clean and quiet and seats comfortably,” said Mayor Carolyn Goodman, who was among the first public officials to hop a ride on the vehicle developed by the French company Navya and dubbed Arma.

“I see a huge future for it once they get the technology synchronized,” the mayor said Friday.

The top speed of the shuttle is 25 mph, but it’s running about 15 mph during the trial, Navya spokesman Martin Higgins said.

Higgins called it “100 percent autonomous on a programmed route.”

Read more at http://www.zerohedge.com/news/2017-01-14/driverless-shuttles-hit-las-vegas-no-steering-wheels-no-brake-pedals

January 13, 2017

Swing reversal for NF on 15 min charts (below 8380F)


Market outlook

Daily charts
- trend is up on daily charts
- reversal level is 7900
- rally up for 14 days... NF has not closed below prev day's low even once
- today, we had bearish piercing pattern where NF opened gap up and closed inside previous bar
- AD flat, VIX down 2%

Rise of the machines: A 100-Drone Swarm, Dropped from Jets, Plans Its Own Moves

U.S. military officials have announced that they’ve carried out their largest ever test of a drone swarm released from fighter jets in flight. In the trials, three F/A-18 Super Hornets released 103 Perdix drones, which then communicated with each other and went about performing a series of formation flying exercises that mimic a surveillance mission.

But the swarm doesn’t know how, exactly, it will perform the task before it’s released. As William Roper of the Department of Defense explained in a statement:

Perdix are not pre-programmed synchronized individuals, they are a collective organism, sharing one distributed brain for decision-making and adapting to each other like swarms in nature. Because every Perdix communicates and collaborates with every other Perdix, the swarm has no leader and can gracefully adapt to drones entering or exiting the team.

Releasing drones from a fast-moving jet isn’t straightforward, as high speeds and turbulence buffet them, causing them damage. But the Perdix drone, originally developed by MIT researchers and named after a Greek mythical character who was turned into a partridge, is now in its sixth iteration and able to withstand speeds of Mach 0.6 and temperatures of -10 °C during release.

Read more at https://www.technologyreview.com/s/603337/a-100-drone-swarm-dropped-from-jets-plans-its-own-moves/

Rise of the machines: Artificial intelligence develops "gut feel" and learns from it

In a landmark achievement for artificial intelligence, a poker bot developed by researchers in Canada and the Czech Republic has defeated several professional players in one-on-one games of no-limit Texas hold’em poker.

Perhaps most interestingly, the academics behind the work say their program overcame its human opponents by using an approximation approach that they compare to “gut feeling.”

“If correct, this is indeed a significant advance in game-playing AI,” says Michael Wellman, a professor at the University of Michigan who specializes in game theory and AI. “First, it achieves a major milestone (beating poker professionals) in a game of prominent interest. Second, it brings together several novel ideas, which together support an exciting approach for imperfect-information games.”

Read more at https://www.technologyreview.com/s/603342/poker-is-the-latest-game-to-fold-against-artificial-intelligence/

January 12, 2017

Hot stocks and charts

LAST updated: 12-JAN-2017 

Simple rules

  • This information is for your study only and is not a recommendation to buy or sell.
  • Consider trend as UP when a stock gives a breakout above last month's high
  • To lock in gains, use a trailing SL (last month's low or last 2-3 weeks low)
  • Expect half the trades to (statistically) fail so manage the risk management in every trade
  • Limit risk per trade to maximum of 1% of your capital
  • In case of narrow ranges, consider the bigger / previous trading range as breakout levels
  • Pay attention to large bar breakout days or one day large reversal bars.
AIAENG
AIAENG chart

Market outlook

Daily charts
- trend is up on daily charts
- reversal level is 7900
- today, markets were up . AD was negative
- option writing support may be shifting to 8200 levels
- expect strong resistance around 8500 levels


5 min charts
- NF traded in range
- nothing to do


Porinju Veliyath’s 2016 Returns

January 11, 2017

Some more buy signals


Market outlook

Daily charts
- trend is up on daily charts
- reversal level is 7900
- today, markets were up 1%.
- AD was 2:1, VIX down 2%
- stiff resistance expected near 8500

January 10, 2017

Lots of BUY signals coming

Expect half of them to fail (statistically speaking).


Market outlook

Daily charts
- trend is down on daily charts
- today, NF closed in positive.
- AD was marginally positive, VIX down 2%
- option writing support remains at 8000, resistance 8400

Neowave analysis of market

... all corrective phases in Indian market consumed about 13 or 21 months, both of which are Fibonacci Numbers.

Dec’16 was the 21st month from Mar’15. Thus, the larger corrective phase may have ended as a Neutral Triangle in 21 months. 

Accordingly, we raised the question if the Corrective phase is now over, and whether a new up-move has indeed opened from Dec’16 bottom. If it is a new up-move, then Index should move to new all-time highs above Mar’16 high of 30025 (Nifty 9119). 

However, we also mentioned the possibility that the post-Dec’16 move may be only an x-wave after completing 1st Corrective as Diamond-Shaped Diametric. If it is only an x-wave, then it should end below 61.8% retracement level to the 1st Corrective.

The 61.8% retracement level calculates to about 27800 (Nifty 8560), and the same is accordingly marked on the initial Daily chart as a crucial upside for the current up-move. By NEoWave, a small x-wave should not retrace more than 61.8% of the 1st Corrective.

We will, accordingly, monitor the progress of the current up-move and see if it hesitates before reaching the 61.8% mark, and proves itself as x-wave.

If the up-move proves only as an x-wave, then either “E” on the Neutral Triangle is converting itself into a Complex Corrective OR larger corrective phase may have started from Sep’16, as per 8-year cycle, instead of Mar’15.

Read more at http://content.icicidirect.com/ULFiles/UploadFile_201719132720.asp

January 9, 2017

Market outlook

Daily charts
- trend is down on daily charts
- today, markets closed flat. AD was flat, VIX up 3%
- option writing support remains at 8000
- chances of a correction are high... let's see
- sustaining above 8300 can lead to rally to  8500 levels

Plastic money will be redundant in India by 2020

India could see credit and debit cards becoming redundant as by 2020. As more people adopt the government’s Aadhaar Payment Bridge System (APBS) which will allow authentication of payments with nothing more than a user’s fingerprint.

“India is in the midst of huge disruption in the world of both financial technology and social innovation. By 2020, my view is that India will make all debit cards, credit cards, ATMs and POS machines totally irrelevant,” said Amitabh Kant, CEO of NITI Aayog, in a panel discussion at the Pravasi Bharatiya Divas in Bengaluru on Saturday.

Read more at http://www.business-standard.com/article/economy-policy/plastic-money-will-be-redundant-in-india-by-2020-amitabh-kant-117010700592_1.html

January 7, 2017

BANK NIFTY weekly charts

- trend is down on weekly charts
- some signs of buying appearing at lower levels
- resistance around 18800 levels


NIFTY weekend update

Intraday charts
- sell signal on break from box
- cover on close


Daily charts

January 6, 2017

Your gold may be tungsten and not gold.

Hot stocks and charts

LAST updated: 05-JAN-2017 

Simple rules

  • This information is for your study only and is not a recommendation to buy or sell.
  • Consider trend as UP when a stock gives a breakout above last month's high
  • To lock in gains, use a trailing SL (last month's low or last 2-3 weeks low)
  • Expect half the trades to (statistically) fail so manage the risk management in every trade
  • Limit risk per trade to maximum of 1% of your capital
  • In case of narrow ranges, consider the bigger / previous trading range as breakout levels
  • Pay attention to large bar breakout days or one day large reversal bars.

Demonetisation unlikely to hit Q3 hard

Any fallout of demonetisation on third quarter earnings is likely to be cushioned by the positive impact of a good monsoon, Seventh Pay Commission payouts and a robust festival season. Also, key sectors, such as pharmaceuticals, information technology, commodities and oil & gas are least affected by demonetisation, largely due to the global nature of their businesses and minimal exposure to retail consumers. Close to half of all Nifty companies belong to these sectors.

Low probability

According to market analysts, December quarter earnings may not be all that bad for Nifty 50 and large companies. “The probability of earnings declining by double digits in Q3 is very low. Forty-five out of 90 days have been good due to festive season. The first half was also good,” said Harish Krishnan, Vice-President — Fund Management Equity, Kotak Mutual Fund. Most companies in the Nifty100 will also see not much impact from demonetisation

Read more at http://www.thehindubusinessline.com/markets/noteban-unlikely-to-hit-q3-hard/article9461526.ece

January 5, 2017

Market outlook

Daily charts
- trend is down on daily charts
- close above 8300 and near day's high will be trend reversal
- today, markets closed 1% in negative
- AD was 3:1; VIX was down 5%
- option writing support 8000
- note this rally has taken lesser time as compared to recent fall

Creating Economic Assets out of Nothing

One of the magical things about economics is that you can create an economic asset out of nothing but persuasion. For example, if you persuade people to be more optimistic about the economy, people invest more money, buy more products, create more jobs, and generally manifest the better economy from their own expectations. This magic of creating wealth from nothing but persuasion is one of the reasons President-elect Trump will be different from other presidents. He knows how to do this particular brand of economic magic. He has been doing it for years with his own company. The more common names for this phenomenon are branding and licensing. Companies license the Trump name for their buildings and other products because they recognize the name as a psychological asset that Trump created by persuasion.

Read more at http://blog.dilbert.com/post/155392710916/creating-economic-assets-out-of-nothing

97% banned notes said to be deposited in banks in blow to Modi’s black money fight

Indians have deposited nearly all the currency bills outlawed at the end of the deadline last year, according to people with knowledge of the matter, dealing a blow to Prime Minister Narendra Modi’s drive to unearth unaccounted wealth and fight corruption.

Banks have received Rs14.97 trillion ($220 billion) as of 30 December, the deadline for handing in the old bank notes, the people said, asking not to be identified citing rules for speaking with the media. The government had initially estimated about Rs5 trillion of the Rs15.4 trillion rendered worthless by the sudden move on 9 November to remain undeclared as it may have escaped the tax net illegally, known locally as black money.

Read more at http://www.livemint.com/Industry/RlRLIaViu44DYPKASuX76K/Banks-said-to-get-97-of-banned-notes-in-setback-to-Modis-b.html

January 4, 2017

Market outlook

Daily chart
- trend is down on daily chart
- today, markets closed flat
- AD was marginally positive, VIX was flat
- option writing support 8000 resistance 8200

January 3, 2017

Option trades - V

This is a record of my option trades from 2-JAN-2017. Previous trades can be found here.


Market outlook

Daily charts
- trend is down on daily charts
- today, markets closed flat
- AD was 3:1; VIX flat
- option writing support persists at 8000
- resistance expected around 8300 (may break)

Lessons from a Legendary Short Seller

“I was always net long.”...An unexpected statement from a short seller.

Wilson routinely maintained net exposure between 25% and 125% depending on how bullish or bearish he felt. Even when extremely negative, Wilson was 25% net long. When asked why he never went short, he answered:

“Because I never wanted to get up in the morning hoping that things would be getting worse. All intellectuals I think — and I don’t use that as a particularly flattering term — but all intellectuals tend to have a pessimistic streak.

“There’s something intellectually much more intriguing about failure, which is knowable, rather than success, which is sort of unknowable.

“The way people fail is understandable and predictable and almost inevitable, whereas the way people succeed may never have happened, and so an intellectual is drawn towards failure, I think.”

Pessimism has long been a lure for journalists: “If it bleeds, it leads,” after all. But there’s a difference between generating clicks and generating alpha: We all know there are no short sellers in the Fortune 500.

To quote Warren Buffett’s 2015 letter:

“For 240 years it’s been a terrible mistake to bet against America, and now is no time to start. America’s golden goose of commerce and innovation will continue to lay more and larger eggs.”

Optimism is what pays in markets and Wilson knew this.

Read more at https://blogs.cfainstitute.org/investor/2016/12/22/lessons-from-a-legendary-short-seller

BHIM app can give Paytm & co a run for their money

Image result for bhim app

The BHIM app — which comes close to the government’s vision for UPI i.e. “one app to rule them all” — scores over e-wallets in many use-case scenarios. 

For starters, the BHIM app allows offers direct funds transfer across different bank accounts. Mobile wallets, on the other hand, lack interoperability and allow funds transfers only within same wallet operator. No longer would you require to load or top-up mobile wallets to pay for services. Almost all banks including private sector biggies ICICI Bank and HDFC Bank, and state-run State Bank of India have been on-boarded on to the app interface. 

Next, the app scores heavily over mobile wallets with regard to transaction limits. Users can transfer up to Rs 10,000 per transaction and Rs 20,000 per day with the BHIM app. Mobile wallet transfers are subjected to a limit of Rs 20,000 per month, which can go up to Rs 1 lakh per month on completion of a Know Your Client (KYC) check. In comparison, the BHIM app allows for Rs 6 lakh worth funds transfer a month. 

Also, BHIM app transactions are free of service charges for now (though banks may choose to levy some in future). Mobile wallet transactions, on the other hand, incur service charges.

Read more at: http://www.moneycontrol.com/news/economy/comment-bhim-app-can-give-paytmcorun-for-their-money_8195881.html


Paradox for long term investors

........

you construct a portfolio of such businesses and plan to hold on to it for a long time, allowing the magic of compound interest to do its magic and after you make these investments you are fully invested.

But then after a while you get some cash and that’s what creates this paradoxical situation. Which is that you are no longer willing to buy more of what you already own (because they are too expensive now) but you don’t mind holding on to these businesses you love so much.

And then you meet a trader friend who is quite successful and he politely tells you that you buy your portfolio every day. That is, holding on to a position is the functional equivalent of selling it and immediately buying it back (ignoring transaction costs and taxes). And so if you’re not a buyer anymore of a position you own, then you should be a seller.

I have struggled with this paradox for many years and have written about it in the past (in my interviews with Vishal Khandelwal of Safal Niveshak) and elsewhere where I have basically said that for long-term investors in high-quality businesses, the rules for buying a stock and those for holding a stock are not the same.

Read more at https://fundooprofessor.wordpress.com/2017/01/02/paradox

January 2, 2017

Demonetisation is history! If you have the money, buy into this market: Rakesh Jhunjhunwala

NEW DELHI: At a time when most analysts on Dalal Street are worried about the unfolding effects of demonetisation, the big bull of Dalal Street, Rakesh Jhunjhunwala, says, "Cash ban is history. If you have money, put it in stocks."

In an interview with ETNow, the ace investor said the way the Nifty50 bounced back from the lows of 7,900 to nearly 8,200 suggests that the downside remains limited. Jhunjhunwala expects things to normalise faster than expected after the demonetisation ..

Read more at: http://economictimes.indiatimes.com/articleshow/56287450.cms

Neowave outlook of market

Till Friday’s high, last week’s 4-day rally had retraced about 88% (Nifty 79%) of preceding 11-day. Structurally, the question for the fresh week is whether the rally would be able to retrace the fall in faster time, for which, 7 days left now.

If the rally does retrace the preceding fall in faster time, i.e. moves above starting point of the fall at 26804 (Nifty 8275), then it would be the first time since Sep’16 that any such fall would be getting completely retraced.

Remember, last week we said that the development from Sep’16 could be more appropriately explained as a Diamond-Shaped Diametric, which is 7-legged pattern. Its all internal 7 legs, i.e. a-b-c-d-e-f-g, are now shown on the initial Daily chart.

As per this structure, the preceding 11-day fall from 26804 (Nifty 8275) to last week’s low is labeled as “g” or last leg of the Diametric.

By NEoWave, faster retracement of last leg of a structure suggests that the structure, (or downward Diametric in our current case), may be over, and another structure in an opposite directions has opened.

Therefore, whether the Index can move above 26804 (Nifty 8275) would be the most crucial technical event to watch as we begin trading in the fresh year ‘2017.


Read more at http://content.icicidirect.com/ULFiles/UploadFile_20171211252.asp

Market outlook

Daily charts
- trend is down on daily charts
- today, markets closed flat
- AD was 2:1, VIX up 2%
- formation of higher high higher low is still intact
- strong resistance seen near 8300 and then 8500