Exit, Exit and Exit from Equity!!!!

As I mentioned in my previous blog, Nifty reached 5950. Now it can go up to 6200-6250 also but investor must use this rally to book profits & park their fund in long term debt instruments. From this monetary policy RBI may start cutting interest rates; so those who will hold long term debt instruments like Tax free Bonds or NCDs will get capital appreciation on their debt instruments. In my opinion RBI may cut Repo rate by 200 basis points in a year or two. So debt investors will get at least 15-20% appreciation over and above interest rate.


Now 5830 level is major support for Nifty. If Nifty breaks this level we must exit equity. Second level confirmation will come below 5555. As I said in my previous blog one big sell off is still pending in the market, so better we exit at this point. Now market will become very volatile. I think one should not carry any long position in futures.

Following sectors looking weak:


Capital Goods, Consumer Durables, FMCG, IT, Metals, Power & Real Estates

Following sectors outperform the market:

Banking, Oil & Gas, Healthcare & Auto

To conclude, one should short Nifty below 5830 for target of 5555-5400-5200, stop loss above 6300. Those who don’t want to take short position in market they can buy listed tax free bonds or NCDs. Happy Trading!!!!

Short term trend is Bullish…

As I mentioned in my previous blog, 5400 was a crucial resistance for Nifty. Nifty broke that resistance and made a High of 5630 but couldn’t succeed to hold that level. It came down to 5135 once again. Now 5200 to 5400 is the range for Nifty and either side breakout will decide the new range for Nifty.


I think bias has shifted to buy side for short term & we may see a triangle breakout which will take nifty to 5900-5950 level. But that does not mean the major trend has changed, market will come down once again. It will not make a new high.

These stocks may outperform in short term.

In this leg Mid Cap & Small cap firms will outperform the large cap stocks. So I will suggest invest in mid cap stocks of strong sectors

Sectors Looking Strong on Charts:


Auto, Banking, Pharma n Healthcare & FMCG


Sectors looking weak on charts:


Oil & Gas, Metals, Real Estate, Power & IT


To conclude, one can buy Nifty above 5390 for target 5940 with a stop loss below 5135. This is pure short term view, biased is still negative so investors can still hold their funds in debt instrument. One large sell off is still pending in market. Happy Trading!!!!

Is Market Bottomed Out????

When everybody in the market expects market to come down, market always reacts opposite. The same happened this time. Everybody was bearish on market and giving down targets. After breaking a low of 4632, Nifty made a new low of 4538. All market participants were expecting Nifty to come down to 4300-4000 level but Nifty reacted differently. Nifty gave a good bounce back in January and came back again to 5149 level. Is market bottomed out????


I will wait for confirmation. Still there are no signs of trend reversal in Nifty. Neither I found any trend reversal pattern nor Nifty has made Higher High and higher low (previous high 5402 is still intact). So I will wait and watch.

Let us assume Nifty has bottomed out then also it will have to come to 4850-4900 before making new High. If Nifty takes support at this level and gives bounce back and makes a new High, then only we will mark this as trend reversal. Second level of confirmation will come once Nifty breaks 5400 level.

Now let’s look at the chart; whenever RSI is near 70, Nifty has changed the trend. It has started coming down from that level. Since last one year whenever Nifty is coming down volumes are high and low on bounce back. In this bounce back also volumes are low.

Following Sectors looking weak on Charts:

IT, Metals, Power, Real estate, Oil & Gas

We may see profit booking in following sectors:

Consumer Durables, Capital Goods, Mid Cap and Small cap

Following sectors will Out-perform the market:

FMCG , Auto, Banking & Health Care

To Conclude, Nifty has not bottomed out yet. We will wait for confirmation. Confirmation will come only if Nifty makes higher low around 4850-4900 and then makes new High. If not, then we are still in down trend and down trend will resume once again below 4780.


WAIT AND WATCH FOR CONFIRMATION. Happy trading!!!!!!!




Sell off has started once again

After breaking major resistance of 5175 (17300), Nifty went up to 5400 levels. That was a typical Bull Trap and as I mentioned in my earlier blog, that was the last chance to exit equity market. Since August 2011 Dollar has appreciated against Indian rupee by almost 18% and hence foreign investors had to exit from Indian equity markets. Once Nifty breaks 4667 (Sensex-15652) we will get confirmation for next round of sell off.


Since the sensex has started, whenever it has broken previous years’ low, it has corrected at least 15% from that low. Previous year’s low for Nifty is 4667(Sensex-15652). Once that low is broken we can expect at least 15% correction till 3960(Sensex-13300). So every bounce back is a shorting opportunity. Now 4940 is a major resistance, one can go short around that level with stop loss above 5080.

Following Sectors looking weak on Charts:


Capital Goods, Metals, Power, Real estate, Oil & Gas, Midcap and Small Cap

We may see profit booking in following sectors:

Consumer Durables, IT, Banking & Health Care

Following sectors will Out-perform the market:

FMCG & Auto

To conclude, every bounce back is selling opportunity. One can go short in Nifty around 4900-4940 with keeping stop loss above 5080 for the target of 4680, 4400, 4200 & finally 3800. PLEASE DON’T BUY ANY STOCK IN HURRY. Happy Trading!!!!!!!

Last chance to Exit from Equity market

I hope those who read my earlier blog must have booked the profits and parked their funds in Debt instruments where capital is safe. As I mentioned, Nifty came down by almost 1000 points and made a low of 5720 (Sensex – 15765). Nifty confirmed the down trend once it broke the major support of 5175 (17300). Now that support (5175) has become major resistance. Nifty tried to break the same twice but couldn’t succeed.


Today S&P CNX DEFTY (Nifty in terms of Dollar) has broken its previous low. Because of that FII sold the shares with volumes. Still we have not seen panic in the market but once Nifty breaks 4720; we may see a huge sell off in the market.

Till today FMCG sector has not given Sell but tomorrow we may see selloff in that sector too. If FMCG sector also becomes bearish that confirms down trade has started.
Sectors looking weak on charts:

Capital Goods, Metals, Oil & Gas, Power

Sectors may outperform the market:

IT, Pharma & FMCG

To conclude,  this is the last chance to exit from equity market, we may see a huge sell off and Nifty can go down to 4400, 4200 and then 3750. Happy Trading!!!!!!

Time to book profits from Equity market

After the rate hike from RBI, market has started going down once again. As I said in my earlier blog, it’s a time to book profits from Equity markets and park your funds in debt instruments where capital is safe. This week Sensex has broken a major support of 18975 (Corresponding levels in Nifty – 5700), now the first support will come around 17800 (5350).

If you have missed the train you will get a chance to ride the trend once again. Next week if sensex comes around 18800 (5600) then one can go short with a Stop loss above 19300(5750). As I mentioned in my previous blog , this C wave of A-B-C correction. A wave was 21200 to 7700, B wave was 7700 to 21108 and C wave has started now which may take sensex to 12500-13000.

As mentioned in the chart “e” wave has started and this wave can be a very destructive one. This wave can be 161.8% to 261.8% of “a” i.e. 16000 / 14200 or 100% of “c” i.e. 16300.

Following sectors looking weak

Real Estate, Telecom, Capital Goods, Power

We may see profit booking in following sectors

Metals , IT, Banking ( If Tata Steel goes below 575, it can go down to 500 in 10-15 days)

Following sectors may outperform broader market

Healthcare, FMCG, Auto

To conclude, book profits from equity market and park fund in debt instruments. One can go short in Nifty around 5600 with a Stop loss of 5750 for the target of 5200-4900. Happy Trading!!!!



Time to book profits in Smallcap and midcap stocks

Since Feb 2009, Midcap and Smallcap stocks has been appreciated by almost 240% and 300% respectively. But both the indices could not made a new high, both the indices recovered almost 80% of entire fall ( from Jan 2008 to Feb 2009).

If you are holding any smallcap or midcap stocks then please exit them if it goes below 10 days low.

If BSE Smallcap index closes below 8992 then it may test 6000-7000 levels once again.

If BSE midcap index closes below 7215 then it may test 5600-700 levels once again.

Its a 34 th Month from the all time high and 21st month from recent low (March 2009), so december month can be trend reversal. So be cautious in the market and keep tight stop loss orders.

Following sectors looking weak on charts:

Capital Goods, Power, PSU, Real Estate.

We may see profit booking in following sectors:

Banking, FMCG,Auto, Consumer Durables, Metals, Oil & Gas.

Following sectors may outperform the broader market:

Pharma ( Healthcare), IT.

18950 for Sensex and 5690 for Nifty are crucial levels. If it goes below mentioned level on closing basis then that confirms the down trend. Happy Trading!!!!!!