• Save
Nifty Resonance Monday January 31 2011
Upcoming SlideShare
Loading in...5

Nifty Resonance Monday January 31 2011



An medium term outlook on Nifty

An medium term outlook on Nifty



Total Views
Views on SlideShare
Embed Views



1 Embed 4

http://www.linkedin.com 4


Upload Details

Uploaded via as Adobe PDF

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
Post Comment
Edit your comment

Nifty Resonance Monday January 31 2011 Nifty Resonance Monday January 31 2011 Presentation Transcript

  • Nifty Resonance Monday, January 31, 2011 An Index Analysis Report
  • Nifty: Are the bulls being taken on by their horns? • Since Diwali 2010, Indian markets have been under pressure and Nifty hasn’t managed to sustain above 6300 levels. • The first decline from the peak of 6347 on Nov 09, 2010 can be labeled as profit taking. • The failure thereafter to sustain above 6200 by Nifty in the past 21/2 months is what bothering. • For the first time since Nifty started to rally in March-2009, one is observing a “Lower Top”. • The upward momentum which began in Sep – 2010 around 5350 levels in Nifty is on verge of getting retraced by 100%. • The questions we face today are: – Is the rally over in Nifty? – Will year 2011 generate a positive return for Nifty? – How much will the Nifty correct? – Is the uptrend intact? – Should be initiate longs at lower levels? • In the subsequent slides, we try to seek answers to these questions by taking a look at some facts and figures, some charts and statistics. • These facts and figures would help us to a certain extent in determining a reasonable explanation for the current scenario and perhaps help in building a case for the future.2
  • Nifty: Some introspection • The failure to break past 6350 by Nifty futures for the second time in two years is being seen as a possible “Double Top” by some. • The decline from the highs of 6200 in Jan 2011 to date has been on higher volumes is another cause of concern. • Lack of leadership within the Nifty-50 stocks and too much expectation from the automobile and banking stocks in Nifty to perform / outperform each time a hassle. • Insufficient support from heavy weights like RIL ,ONGC and NTPC continues to be a worry. • Erratic price action behavior by Capital Goods, Oil & Gas and Metal stocks in Nifty keeping both investors and traders at bay. • Lack of confidence in sectors such as Healthcare and FMCG amongst participants as they continue to be perceived as “Defensive bets”. • Poor show by Real Estate and select Power stocks in Nifty adds up to woes. • Low readings by Nifty’s Implied Volatility making life riskier for professional option traders. • Does the immediate levels of support around 5350 areas has the potential rein in the decline? • What if Nifty breaks below 5350 levels even if the same happens somewhere in the month of March 2011?3
  • Nifty Futures (Daily) CMP:5536.55 Trend line connecting lows of July 2009 (4375) and May 2010 (7102).4
  • Nifty Futures 14 Day RSI (Daily) Level:31.51 In the past, we can see, the levels near 30 of RSI has indicated oversold status for Nifty and a bounce back has occurred. Will it happen again is the question here?5
  • Nifty Futures (Daily): Stochastic Momentum Index: Level: 73.58 The Long term upward momentum is waning and the same is slowly being confirmed by the Stochastic Momentum Index Charts.6
  • Nifty: Straight from the Charts • The 14 Day RSI is close to the 30 levels which in the past 15 months has proven to be a graveyard for bears i.e. Nifty has managed not only to pullback but also made a new swing high. • The short term price action suggests that the Nifty futures is in the oversold territory. • We expect a short term swing low / bottom to be in place around Tuesday in the current week. • The range in which the swing low / bottom can be formed is expected to be between 5300-5400 areas. • A meaningful pullback is what we would be expecting in Nifty from the support zones mentioned from Tuesday and ideally we would expect the pullback to last anywhere between 5-8 trading sessions. • We expect the pullback to push prices of Nifty futures to near 5800 levels. • The 21 month long term up trend in Nifty is still intact and there is no concrete evidence of trend reversal as yet. • The current decline in Nifty futures can at best be described as signal of caution. • Pullbacks in Nifty can be used to unwind Automobile, Banking and Capital Goods stocks in Nifty-50 as we don’t expect leadership from these sectors anymore.7
  • Disclaimer • The contents of this report are based on Technical Analysis. Technical analysis of the market movements and the projections of future price behaviour are based on historical price movement and market commentaries on probable future market price trends are offered as a source of information. They are the views of Kurtosis Analytics & Advisors LLP only and are in the form of Technical Market Research. It is not to be reproduced or copied or made available to others. This report is not intended for distribution to, or use by, any person or entity, any jurisdiction or country, where such distribution or use would be contrary to local law or regulation. The Research published in the advisory series are our own opinion about the market and the individual stocks / commodities / Currencies and Indices as may be specified from time to time, and though they are expressed in good faith, are not guaranteed. The use of the information is entirely at the risk of the reader and it is his/her sole responsibility to evaluate the accuracy, completeness and usefulness of the information. • Under no circumstances it is to be considered as an offer to facilitate trading in the stock market, or a solicitation to buy or sell any security and/or options, futures, commodities, currencies, indices, mutual funds, bonds etc. Kurtosis Analytics & Advisors LLP, the owners of Kurtosis.in, in no way, promotes or suggests that individuals should trade equities, futures, commodities, indices, currencies, mutual funds, bonds or any of the financial instruments without a proper knowledge of the risk involved in such trades, or proper individual research prior to such trading. Kurtosis Analytics & Advisors LLP provide research services along with trading and investment advisory services to clients that have engaged Kurtosis Analytics & Advisors LLP. The information on this report is for informational purposes only. No person other than an empanelled client of Kurtosis Analytics & Advisors may rely on any information contained herein. • Kurtosis Analytics & Advisors LLP is not registered with the Securities and Exchange Board of India or with the securities regulators of any other country. Nothing contained herein shall constitute an offer or solicitation to buy or sell any securities, or to offer for compensation any investment advisory services or any securities brokerage services in any jurisdiction where such offer or solicitation would be prohibited. • The information contained on this report is the exclusive property of Kurtosis Analytics & Advisors LLP. This information should not and cannot be copied or archived or used by anyone other than an empanelled client of Kurtosis Analytics & Advisors LLP. All contents of this report are furnished on a confidential basis. • NO GUARANTEE CAN BE OFFERED ABOUT THE ACCURACY OR COMPLETENESS OF THE RESEARCH, MATERIALS AND THE SERVICE CONTAINED ON THE WEBSITE AND WE EXPRESSLY DISCLAIM LIABILITY FOR ERRORS OR OMISSIONS IN THE RESEARCH, MATERIALS AND THE SERVICE. While every effort has been taken to ensure that the information provided is based on facts and from reliable sources , we do not represent or endorse the accuracy or reliability of any of the information, content or advertisements contained on, distributed through, or linked, downloaded or accessed from any of the services contained on this website, nor the quality of any products, information or other materials displayed, purchased, or obtained by you as a result of an advertisement or any other information or offer in or in connection with the Service. It is entirely possible that the personnel, analysts, owners and other associated with Kurtosis.in could have, from time to time, some trading or investment positions in the stocks being discussed on the site. Any reliance upon any information in this report shall be at your sole risk8