49_Technical_Analysis_Review_090514

Technical

Analysis

Review

09-05-2014

Review_09/05/14 - ( Rating - 11/15 ) → Positive - High Risk - Rupee is Appriciating / Nifty on verge of Breaking out into Bull Market / AD is +ve / TRIN is -ve / Net 52 WK Hi/Low is

+ve / Bonds is +Ve (--) Big Picture is Positve.

| 0 is extreme -ve | 1 is -ve | 2 is Netural | 3 is +ve | 4 is extreme +ve |

It is notable that the entire activity of previous 4 Months is contained into the range of

August Huge Candle & it is unable to takeout the lows of that August candle.On Daily

TF the price is converging into an Symetrical Triangle.It is Notable that $ Index has

Given a Breakout from Weekly Demand Zone & $ is expected to Raise against all

Currencies (Trouble for Rupee) Also With Growing Crises senerio Green Buck (has

been considered to be the Hedge (Preferred Vehicle For Cash).

Indian Rupee - ( 3/4 ) → Rupee Breakout from Ascending triangle Pattern

(Consolidation Range was from 58.932 to 61.230 on 15-08-2013) Upto 67.59 (27-08-

2013) & $ is in a Bull Maket v/s Rupee Depreciation.Rupee had Retracement from Top

to 61.44 on 03-10-2013. Rupee is consolidating into a Range at Demand Level from

Weekly Timeframe.A Breakout from Range is awaited

Supply Zone at 1) 69.228 (68.860) 68.578 2) 64.074 (63.669) 63.206

Demand Zone are at 1) 61.154 (60.720) 60.373 & 2) 59.368 (59.044) 58.688

Nifty - ( 3/4 ) → Move From 4500 (19-12-2011) to 5631 (22-02-2012) is Uptrend &

there was retracement upto 4761 (61.8% Retracement) upto 05-06-2012

Market Restarted Uptrend from 4761 (05-06-2012) to 6110 (29-01-2013) There was

correction from 6110 (29-01-2013) Upto 5477 (10-04-2013)

After Entire Move from 5477 (10-04-2013) to 6229 (20-05-2013) There was correction

in Uptrend (as Higher Low is formed at 5570 on 25-06-2013 after Neckline of 5950 of

Fresh H & S is Broken Measured Decline is upto 5700 (78.6 % Rectracement of 5477 to

6229)

Lower High Lower Low Trend (Down Trend from 6229 (20-05-2013) to 5565 (24-06-

2013). Retest & Double Top Was From 5565 (24-06-2013) & Ended at 6077.79 ( 23-07-

2013 ). Another Lower High is Created at 5742.29 (14-08-2013)

Dimensions →

Previous Highs of 5742.29 (14-08-2013), 6077.79 (23-07-2013) 6142.25 (19-09-2013)

& 6189.35 (18-10-2013) is broken on Upside & Price is at Life time High of 6353 (01-11-

2013) & Parabolic Upmove has been Sucessfully Sustained after creating a Higher Low

at 5701.54 (01-10-2013) & After Inverse H&S Breakout above 6116 Price closed below

6076 (28-10-2013) Trend reversal can occur if Lower High is confirmed (Already Put )

by Price

Supply Levels is -

Demand Levels are 1) 6354 (6228.45) 6187.80 2) 6133 (6100) 6102 3) 5807 (5791)

5780 4) 5755.28 to 5714.63 5) 5550.13 (5506.50) 5474.97 6) 5276.86 - 5211.20 7)

5128.09 (5079.67) 5032.70 8) 4842.27 4770.73

Price → Major Trend line break from Historic Pivot Highs of 6154 - 6134 is broken on

the Up side & retesting the Trendline break from above,Measured up move of Break

of Ascending Triangle is Very high at 7782 (38.2%) (Very Difficult - Down Side Break is

very Low 3345 (50%) & 2864 (61.8%))

Volume → Volumes are in increasing Trend.In May series Nifty future added 9.06 lakh

position in Open Interest and this accounts to 6.23 % of Total Open Interest in May

series.The Nifty May series is trading at 28.6 Rs premium to Underlying . In derivative

cumulatively for all series contract Nifty future net added 10.8 lakh position in open

interest and this accounts to 6.74 % of Total Open Interest in all series and

cumulatively trading in average premium of 48 Rs to Underlying.

Indicators OSMA -VE Trend - Slow Stochastic +Ve Trend - ADX +Ve Trend

Open Intrest (OI) → Record updated for-.May/12/2014-NIFTY FUTURE-CMP(6887.4)

is currently in SIDEWAYS trend.The open interest is also increasing with trend

At current price strike the activity is tilted to call side and ratio is still strong The Nifty

Call and Put option is trading at premium so market is expecting up above 6900 or

down below 6800

NIFTY PCR (Position Wise) - 0.79 & (Money Wise) - 0.23

Breadth Charts - ( 2/3 ) → (Rating 1 for Each +ve)

TIme → After Previous F&O expiry (@ 6641.75 ) Nifty could now build Short Position

due to Sharp Pullback Rally….. Nifty's 56 Day Cycle

(04-04-2014 was a strong Down Day ) (Next Date 30-05-2014 Expect Downtrend )-->

Mid month Reversal ( 13-03-2014 was a Doji Day )(Next Date 09-04-2014) Quaterlies

Settlement is on 3rd Friday (21-03-2014 was Narrow Range Bearish Day) (Next Date

21-06-2014)

Sentiments → Sentiments are now Caustious as current Breakout into Life time High

has retraced, Due to Sharp retracement in Upmove Traders are forced to cut their

Long Position,A Break on Upside from Weekly Inverse H&S & Monthly Ascending

Triangle Indicates Supreme Power for Bulls.Risk Reward would be favourable on Bear

Side upto Retest. Earnings expectations are mostly -ve

P & F Chart → Bear Trap Pattern occurred on 09-05-2014. Rare Double top & Inverse

H&S Neckline Breakout @ 6200 --- New Support 6700 & Resistance 6850

Advance Decline Line (1/1) → If the Nifty is rising but the number of stocks

advancing is dropping, then the trend is in trouble and may pause soon or even

reverse.

AD Line is Now Rising with increase in Nifty, indicates Increased strength in Up trend &

Line is still Low on the Curve hence it is Positive for Uptrend.

Midcaps are Raising with inclining Momentum ( After Recovery from Over Sold Levels

) But some Large caps & All Index Heavy Weights are Declining with Little Momentum.

Trader's Index (TRIN Chart) (0/1) → To Incorporate Volume of Advance Decline

Analysis - TRIN is unusual in that it moves opposite to the Nifty

TRIN is a ratio where 1.0 means selling and buying pressure are equal TRIN BELOW 1.0

(More Volume in stocks that are advancing) & Above 1.0 (More Volume in stocks that

are Declining

SMA Trin is Between 0.9 & 0.8 indicated reduced Strength in Uptrend & space for

more stocks to Decline even tho Nifty is Rising,The series of Higher Lows in SMA10 of

TRIN can be Restored.

3 Y 10 Y 30 Y

Indian Bonds (3/4) → Indirect Correlation with Stock Market; Money Flows from Bonds to Stock for Short term Maturity (Mkt Goes up) & Vice Versa. Shorter Period

= Lower Rate (Controlled by Centeral Bank & Indirect relation to Stock Market) + Longer Period = Higher Rate (Controlled by Market)

NSE Net Monthly High & Low (1/1) → More Stocks in the index making new highs

versus new lows if Number is Reducing Trend is in Trouble.The Rising New Highs

indicate Market’s Buying pressure is accelerating (Environment & Trend) is Positive

There is a downward slope as "Valleys of 52 week Highs" has been broken on upside

for a 2nd Time… indicating Strength in Up Trend.The "Peaks of stocks Hitting 52 Week

High" Should increase for strong Up Trend

India Vix →Volatility Index (or Fear Index or VIX) is a weighted measure of the implied

volatility.Market Makers hedge the market Play, the Down Volume is always a factor

& used in Direct Corelation with the VIX & They Together have Indirect corelation with

Index ie Vix & DVol is Down; Market will move Up AND Vix & DVol is Up;Market will

move Down.Indirect relation between Vix & DVOL leads to Sidewise Index

VIX has moved above 30 indicating Fear. Fear/ Volitality has increased with Up Trend

indicating Possible pullback...Volume is also High....

All Bonds Compleing Pullback in Uptrend. Correct Relation of 30Y ROI > 10Y ROI > 3Y ROI is achived (Caution Money is Moving to Short term Bond Market from Share

Market indicates Weekness in Economy & Flight to safety ) ..… . Under Asset Rotation from Risk on (Equity Market) to Risk off (Bond Market - Security Backed by Govt)

& with Devalution of Rupee the Dollar Outage is gaining strength ( Increase of Returns in 100% Govt secured Bonds).Also Yield Returns in India are more than

corrosponding Bonds in Developed Markets.

http://stockcharts.com/h-sc/ui

Group 1 - Oil + Gas -> 33% Weight Group 2 - Natural Gas + Metal + Corn + Soya -> 42% Weight Group 3 - Others -> 25% Weight

Commodities (Negative Correlation) → $CRB Consolidating in Uptrend, Commodities

Crude Has Broken Down, Post Pullback, Gold has Pullback as $ Moved Down ... (

Equity Markets Rally has Dangers Due to Reduced Economic Growth (& Reduced

Commodity Demand) & Geo Political Tensions are reducing,Now Commodities are to

Resume uptrend if $ continues to be weak & Decline

Currency Markets (Positive Coorrelation) → Dollar is declining Currency that has

Reached Demand Zone & Hence Some Currencies are Reaching Supply Zone. Japan

Yen Aussie $ are Depriciating & Market are trying to Rebuild (Distribution) after Fed's

Stance of Tapering in QE & Budget Deal, Hints at Liquidity Reversal is on Hold (Market

is Build Gains on Good News) ..... Hence Global markets are in Risk Off Mode ..

Currency War has Reached Phase II where Every Currency (Developed & Other

Emerging Mkt Currencies ) are depreciating against $ to take advantage of investment

in safe Govt Secured Bond

http://

in.advf

n.com

/world

The Mighty 10 Index - Top Sector & Index weighted % Wise → ( 10/10 ) Extremely Positive

INDEX → HDFC → Weekly - Up Trend Daily - Sideways Trend Cross Golden

FINANCE → ICICIBANK → Weekly - Sideways Trend Daily - Up Trend Cross Golden

ENERGY → RELIANCE → Weekly - Sideways Trend Daily - Sideways Trend Cross Golden

IT → INFY → Weekly - Sideways Trend Daily - Down Trend Cross Golden

FMCG → ITC → Weekly - Sideways Trend Daily - Sideways Trend Cross Golden

AUTO → TATAMOTORS → Weekly - Up Trend Daily - Sideways Trend Cross Golden

PHARMACEUTICALS → SUNPHARMA → Weekly - Sideways Trend Daily - Sideways Trend Cross Golden

CAPITAL GOODS → L&T → Weekly - Up Trend Daily - Up Trend Cross Golden

METALS → TATASTEEL → Weekly - Sideways Trend Daily - Up Trend Cross Golden

CEMENT → ULTRACEMCO → Weekly - Up Trend Daily - Down Trend Cross Golden

World Markets (Positive Coorrelation) → Chinese Recover is Slow with raised

concerns on liquidity & Devalued Yunan & US Markets has Fresh Breakout (Markets

are Distributing Stocks on Good News Markets are now Ferouscliously Selling.Europe

CAG DAX are Near Resistance & FTSE have given Fresh Break out (Global Markets are

Now breaking out of Resistance. Syncronisation in Breakouts is seen after Creating

consolidation Patterns.But Global Liquidity is Drying,interest Rates are increasing ..All

Equity Markets except EMs are on Risk ON Mode

NB: These notes are just personal musings on the markets, trends etc, as a sort of reminder to me on what I thought of them at a particular point in time. They are not predictions and none should rely on them for any

investment decisions. Readers Discretion Expected. Advocate to Consult Your Financial Advisor before any Investment as Investment in any market may be Lost in its Entirety. Strictly for Entertainment Purpose Only.