IT index technicals

The IT index had corrected and broke its recent support at 9600.... now this level will offer resistance.

This is also the breakout level so sustaining above this can lead to a rally in IT stocks.

Market outlook

NITFY trend is up with support at 7570... tight SL. Below this, next supports are at 7300-7100.

Option writing points to support at 7500 and resistance at 8000.

Market outlook

Nifty trend is up with support at 7300 and then 7100.

Option writing is not giving much clues. Option writers are squaring off their positions at 7500 (I guess at a minor loss) but this strike price still has the highest open interest.

Ideally there should be aggressive put writing but that is not happening.

NIFTY P/E charts

NIFTY P/E has historically ranged between 14 and 30. Traditionally it has always been of investing when the PE has dropped below 15 with exit above 22-25.

Current NIFTY P/E is 20 which means some more upside is there in the markets before stocks begin to start looking expensive.

Note that returns after an overbought market have generally been negative for next 2-3 years.

Market outlook

NIFTY closes at lifetime high and above the 16 MAY election result day.

Trend remains up with SL at 7100.

Option writing points to support at 7000 and resistance at 7500. Note that highest OI is still at 7500 call inspite of a a reduction today. Most likely highest OI will move to 7600 call.

B NIFTY technicals

Short and simple... trend is up with SL at 14500.

Expect more gains above 15800.

Intraday analysis

Easy trade: Initial breakout above 7540F was a failure and whipsaw. Second breakout was profitable.

High risk/ contrarian traders: breakdown failure of days low (11.20, 7520F) would be a buying opportunity. By same logic, these people would have covered at 7550F, shorted the market and would have been stopped out.

Market outlook

Consider trend up as long as nifty trades above 7100. Note resistance at 7560-7600 levels.

Option writing points to support at 7000 and resistance at 7500.

Intraday analysis

Initial weakness failed to sustain and we got 2 buy signals - at 7410F and on close above 7430F (7455F).

There was no short trade.

Big range expected in JULY

Option writing points to a large trading range in JULY... current available levels are 7000 support and 8000 resistance.

JUNE levels are 7000 support and 7500 resistance.

Overall implication is limited upside this month while increasing chances of correction to 7100 levels. Thereafter strong rally leading to a new high in JULY.

Good times ahead...

Market outlook

NIFTY... consider trend up as long as it trades above 7100.

Note that option writing points to support at 7000 and resistance at 7500.

Web based charts services

There are 2 ways of using charts - softwares (Amibroker, Metastock etc) and web based charting applications (no software required).

For most people, web based charting sites are more than adequate. These are mostly free and you get access to generally clean data, all the indicators and options for schemes, layouts etc. In addition, some of them even offer real time intraday charts (paid, icharts).

BANK NIFTY technicals

Trend is up with support at 14500.

Note large candlestick bar formed  on 16 MAY (election results day).

This denotes selling and it should be noted that the high formed on 16-MAY is not yet crossed.

Market outlook

Trend is up with support at 7100. Note strong resistance at 7500 levels. Incidentally option writing points to support at 7000 and resistance at 7500.

Elliot wave theory assume current rally is e leg and is likely to end soon.

Intraday analysis

Breakout above 7400 F was a buy signal... however this failed and SL got hit.

Trade was no profit no loss.

Open interest

Open interest points to resistance at 7400-7500. Support exists at 6800-7000.

This means markets are expected to trade rangebound with limited upside this month.

Let's see how markets trade this week in light of today's rally.

Intraday analysis

Breakout above 7280F was bullish... there was no sell throughout the day.

Market outlook

Markets maintain uptrend within the rangebound movement witnessed since May 16th.

The trading range looks like a triangle which means after this rally (1-2 days), next leg will open down.

Put differently, consider trend as up as long as nifty trades above 7100.

Elliot wave outlook of the market

Current market movement since May 16th is proceeding like a triangle. The e wave has opened up today and is likely to remain smaller than the c wave (price wise).

Some index charts

Very recently I came across this site chartink.com - a good site for EOD charts... for lack of anything to do on a rather lame weekend, I thought I will go thru their charts and post some views.