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Market View at 11am.

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Yesterday looking to the positive global cues, we opened with a gap up. During the day we saw further gain reaching a high of 5510.  With the news of Raja’s arrest, the end of the session saw benchmark indices losing the gain of the day, but still managed to end positive. This move signifies overall lack of confidence at the current juncture.

The current short term technical set up needs Nifty futures to sustain above 5480 & this morning after flat opening the Nifty future is trading at 5495 .Over the last few days,  evident trading patterns have emerged based on different analyzing perspectives that suggest 5300 to 5400 as a very dependable range. One could see a sharp upward momentum towards the end of the week if Nifty futures sustain 5530.

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Written by Rakesh Gandhi

February 3, 2011 at 11:02 am

Posted in Morning Markets

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Commodity: Situation tense but under control

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The rise and rise of commodities in recent past has started to affect the Governments and the economy observers alike and talks of inflationary pressures have started doing the rounds. Even the ECB chief hinted that they won’t be hesitant if a rate hike was required. A glance at the CRB Index weekly charts suggests that the rally in commodities has still some steam left before any meaningful correction and/or a trend reversal would set in.

The current levels are near to the peak of year 2008 and hesitation at around the previous peak isn’t new for any underlying. But selling short purely on the fact that its near to its previous peak can be disastrous and anyone who is thinking of taking a bearish position should allow the CRB Index to break down at least to 564 levels before considering short trade.

However if someone is holding longs then the trailing stop should be placed around 603 areas which is the immediate area of support for the CRB Index. A glance at the individual charts of commodities is painting a different picture. On one hand daily charts of Silver is suggesting caution for long position holders followed by a similar chart pattern in Gold which is
indicating some profit booking in the coming week. On the other hand, chart of HG Copper is indicating that the upward bias could stretch for some more time and taking a bearish view in HG Copper should be avoided. Heating Oil and Crude oil charts are suggesting an upward bias and one can look forward for some gains trading with a bullish position.

Overall the outlook for commodities for the coming week is mixed, energy commodities would continue to swing upwards and metals like copper are still not showing any weakness. The only area of weakness is in precious metals wherein Gold and Silver could see some more profit booking in the coming week.

Written by Dwaipayan Poddar

January 17, 2011 at 10:45 am

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Written by Pratik Doshi

January 5, 2011 at 6:07 am

Posted in Morning Markets

Where do we go….

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What catches our eyes in this morning’s newspapers is whether yesterday’s rally was the end of the fall or just a dead cat bounce.

Let us just dig slightly deeper into what entailed the markets in yesterday’s trade, to draw a picture of where it’s heading in the near term.

Taking a glance at the inflows, the FII’s were net buyers yesterday, and the DII’s numbers were flattish. The trend since the last few days has been FII’s selling, with mixed activity from the Domestic Institutions. This indicates that there is a definite air of caution amongst the investors, either they prefer profit booking at higher levels on Nifty or they prefer to stay out in times of confusion.

If we look at the option activity, we are seeing the Open Interest buildup in Nifty calls have seen a buildup in Options from 6400-6500 to 6300 levels for current month, which signals that investors have mellowed down the probable rise in the market for this expiry. And 6300 levels seem to be a threshold for strong supply. In the put side, the 6000 put has consistently seen a strong buildup in open interest, which probably indicates that the fear begins to creep in below 6000 levels in the market.

Technically the chart setup suggests that the uptrend has taken a setback, with a dip in RSI and MACD being in the sell mode. Only a breach of 6230 levels on the upside could signify that this fall was just a blip in the rally, and market will resume its uptrend. However on the downside 5930 levels would be a crucial support.

Generally the markets look very fragile when they are testing the support as a multiple attempt in a short span of time. The tendency then becomes to break the support, create confusion amongst the investors and traders, and then resume the next move.

Whether there is an actual change in the global scenario with China, being the volatile market it is, facing strong selling pressure. The picture would enfold going forward, but to make a conclusion now can lead to misinterpretation of the markets.

Trade with caution, and play stock specific. This should be the ideal strategy for the day.

Adhere to your stop losses.

It is always good to accept your mistakes and come back strongly rather than being rigid and not learning from them

 

Written by Kunal Bothra

November 16, 2010 at 6:42 am

Posted in Morning Markets

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