SGX Nifty 12th May 2016

SGX Nifty

LTP  8,576.00   -128.00   -1.49% High 8,710.00 Low 8,546.50

SGX Nifty

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SGX Nifty 12th May 2016

SGX Nifty / Nifty Futures today opened significantly lower on bearish sentiment news about Tax treaty with Mauritius being reworked. Nifty opened the day lower and made a low of 7781 (Nifty 50 spot levels mentioned) and then once again started another pullback which took Nifty all the way back to the near term resistance area of 7895.  We did some trading and thereby did make around 124 points during intraday trade today.

SGX Nifty / Nifty Futures Minor Trend is down / bearish. SGX Nifty / Nifty Futures Major trend is also down / bearish. As per Nifty Futures Tips / Nifty Prediction given to our clients we maintain our Nifty View that these are not prices to buy rather on rise at appropriate points Nifty Futures must be short sold with appropriate risk management.  We maintain that we do not see any significant upsides and we see Nifty Futures moving significantly lower from these rates (Please understand that this view is a positional view. Please do not look at this into a context of next 1 week or next few trading days. Overall view is bearish for the near to medium term from now onwards).  Does that mean pullbacks won’t come? Why not?  Mercury is retrograde in Taurus and since it is retrograde in Taurus we can easily see pullbacks every 1-5 trading days but eventually on larger times frames these will just end up as lower tops and nothing else.  As per our advice given to investors we have told them to hold on to as much cash as possible and even moving to fixed income will not be a bad idea.  The current valuations as per our understanding are very high and we do not see much value in stocks at these valuations as per our analysis to invest we will get much lower levels and prices.

There have been some people who have called me and said although you say Nifty bearish everyday Nifty is moving higher and hence I am clarifying our view / prediction. From lower side levels of 7000 we were bullish till 7700 and after that we have been bearish from a positional stand point.   Since we have turned bearish around mid of March 2016 since that time Nifty Chart / Nifty Share Price has been actually within a trend channel having a upper side channel around 7992 and lower side trend channel around 7682. So Nifty has effectively not moved in either direction over the past one odd month however we have been trading and have pushed up our average for shorts to almost 7950 May Futures levels and we are creating this shorts for a positional down move not for the next 1-2 weeks. It is a very similar situation to topping around 9000 levels.  Hence we are seeing a very similar move of topping.  Can it take some more time around here? Sure it can but will Nifty Share price sustain around these prices? The answer to that is probably not.   I am saying this because the rally which started on 29th Feb 2016 has been a rally which is global in nature. India in reality has significantly underperformed the entire move.  The Stock Markets which were heavily under owned have done very well.  Markets, like Brazil, Russia have been great outperformer’s so keep in mind that fundamentals have not  backed this rally or the green shoots theory has not driven this rally at least in India but what this rally has done is made the Global Investor community complacent if we take a look at the VIX index which is a great barometer of volatility it gives investors and traders a sense that everything is ok with the Global economy and risk of trade is currently on but historically whenever VIX starts making a chart structure like the one it is making right now and that too at the lower end of the price zone it always has pushed equities significantly lower.  So now since the rally was global in nature let’s look at the Global Stock Markets to understand the larger picture.  As per what we have been seeing in the index stocks is that there are sure signs of fatigue in global stock markets and that has created lot of negative divergences on our indicators which we do not see will allow international stock prices to remain where there are. Historically whenever we have seen such charts there always have been price wise corrections which have been significant in nature.   They never were small moves and when we look at Indian Stock Markets / Nifty Charts that is the same message they are communicating to us.

If we take a astro cycle view  the markets we expect the down side to resume anytime now.  Also in the near term we could see Gold and Silver rallying higher. Silver especially could behave like a wild horse let loose in the days to come those who are trading in commodities keep a watch on silver.

Use dips to buy and hold Renuka Sugar, Eid Parry, Bajaj Hindustan, MSL, Tata Coffee.  Wait for our reentry message in Nmdc and Kesoram.   Ugar sugar initiated around 23 levels has done very well  and now is almost nearing the 30 INR mark.  We maintain that Ugar sugar on dips is a good buy.  Avoid Banking sector stocks for now and do not try to bottom fish in this market.  There will be great opportunities to buy on the lower side but now is neither the time nor the price. Bottom line is upside is capped and downsides are open.

Daily Chat Transcript provided below for reference.

[17:36, 10/5/2016] +91 90040 79145: We will cover gold short s in next 2-3 days

[17:37, 10/5/2016] +91 90040 79145: As it is possible to see sharp rising cycle in gold from 13th

[17:39, 10/5/2016] +91 90040 79145: And that will coincide with sharp fall in equities

[22:21, 10/5/2016] +91 90040 79145: Exit gold short s

[22:21, 10/5/2016] +91 90040 79145: Confirmation gold shorts closed

[22:22, 10/5/2016] +91 90040 79145: No open positions in Gold

[22:23, 10/5/2016] +91 90040 79145: Confirmation Gold shorts closed

[22:23, 10/5/2016] +91 90040 79145: No open positions in Gold

[08:58, 11/5/2016] +91 90040 79145: Gm

[08:59, 11/5/2016] +91 90040 79145: Hold positions as told

[09:13, 11/5/2016] +91 90040 79145: Stbt trade update book profit in 2nd part shorts done yesterday between 7800-7760 may Fut level for shorts done at 7912 may Fut lvl. Prefers trade

[09:13, 11/5/2016] +91 90040 79145: Stbt trade update book profit in 2nd part shorts done yesterday between 7800-7760 may Fut level for shorts done at 7912 may Fut lvl. Prefeed trade

[09:16, 11/5/2016] +91 90040 79145: Confirmation stbt trade done yesterday booked

[09:16, 11/5/2016] +91 90040 79145: Confirmation stbt trade done yesterday booked

[09:17, 11/5/2016] +91 90040 79145: Hold remaining positions as told

[09:31, 11/5/2016] +91 90040 79145: Wait for msg to sell again

[09:31, 11/5/2016] +91 90040 79145: Overall we do not see Nifty sustaining on upper side

[09:32, 11/5/2016] +91 90040 79145: Do not do any interpretation trades pl

[09:32, 11/5/2016] +91 90040 79145: Pl follow msg and trade strictly

[09:33, 11/5/2016] +91 90040 79145: Hold 1 part STBT Trade & Positional Trade Nifty May 7500 Call Hold 1 Part Short, Nifty May 7600 Call Hold 1 Part Short & Nifty May Fut Hold 1 Part Short. Kindly hold till next update

[10:00, 11/5/2016] +91 90040 79145: just for understanding our avg now for 4 parts at 7870+62=7932 May Fut Lvl. Continue holding 4 parts as told. when and where to sell again I will update

[11:09, 11/5/2016] +91 90040 79145: Stbt trade sell nifty may Fut at cmp SL 7906 spot level

[11:10, 11/5/2016] +91 90040 79145: Hold other positions with out sl

[11:10, 11/5/2016] +91 90040 79145: Confirmation nifty 2nd part stbt trade entered

[12:09, 11/5/2016] +91 90040 79145: Ugar sugar has been doing well. Maintain buy on dips.

[12:09, 11/5/2016] +91 90040 79145: reiterate use dips to buy and hold MSL, Bajaj Hind, Renuka Sugar, Eid Parry, Tata Coffee. Kindly wait for msg to reenter kesoram and Nmdc

[12:11, 11/5/2016] +91 90040 79145: It is advised that for faster communication purpose you change your msg tone for our messages so that once you get a msg you can instantaneously act on them. Better still would be to customize the msg tone to caller tone. Those who have not implemented this may please do so with immediate effect.

[12:27, 11/5/2016] +91 90040 79145: STBT Trade Update Book 50% of 2nd Part done today

[12:27, 11/5/2016] +91 90040 79145: confirmation stbt trade 2nd part 50% booked

[12:27, 11/5/2016] +91 90040 79145: Hold rem 50% qty of 2nd part in STBT Trade done today

[12:28, 11/5/2016] +91 90040 79145: Hold 1 part STBT Trade, 50% Qty Of 2nd STBT& Positional Trade Nifty May 7500 Call Hold 1 Part Short, Nifty May 7600 Call Hold 1 Part Short & Nifty May Fut Hold 1 Part Short. Kindly hold till next update

[12:35, 11/5/2016] +91 90040 79145: STBT Trade Update Nifty Book Rem 50% qty of stbt 2nd part trade @ 7845 May Fut Lvl (Prefeed) Prefeed means bhavv dall ke rakho

[12:35, 11/5/2016] +91 90040 79145: Hold other positions as told

[12:37, 11/5/2016] +91 90040 79145: Nifty Share Price / Nifty Chart does not show any strength as per our analysis. Our Nifty View remains that more or less this is the top area as told before also. Whatever minor variations that take place if any will not last and we reiterate we see significant downside from here. Risk reward ratio does not favor buying at all

[12:39, 11/5/2016] +91 90040 79145: STBT Trade Update Nifty Book Rem 50% qty of stbt 2nd part trade @ CMP May Fut Lvl & Remove the prefeed trade

[12:39, 11/5/2016] +91 90040 79145: confirmation Nifty 2nd part stbt trade rem 50% qty booked

[12:39, 11/5/2016] +91 90040 79145: Hold 1 part STBT Trade & Positional Trade Nifty May 7500 Call Hold 1 Part Short, Nifty May 7600 Call Hold 1 Part Short & Nifty May Fut Hold 1 Part Short. Kindly hold till next update

[12:39, 11/5/2016] +91 90040 79145: when and where to sell more I will update

[12:40, 11/5/2016] +91 90040 79145: eat lunch aramse and come. Screen par matt chipko

[12:43, 11/5/2016] +91 90040 79145: avg 24 points earned in this stbt trade. hence 24/4=6. 7932+6=7938 May Fut avg. Just for some people for record purpose.

[12:44, 11/5/2016] +91 90040 79145: if anything has to be done I will update when and what to do I will update for the time being please wait on sidelines

[13:14, 11/5/2016] +91 90040 79145: Hold 1 part STBT Trade & Positional Trade Nifty May 7500 Call Hold 1 Part Short, Nifty May 7600 Call Hold 1 Part Short & Nifty May Fut Hold 1 Part Short. Kindly hold till next update

[14:27, 11/5/2016] +91 90040 79145: Hold positions as told

[15:03, 11/5/2016] +91 90040 79145: Hold 1 part STBT Trade & Positional Trade Nifty May 7500 Call Hold 1 Part Short, Nifty May 7600 Call Hold 1 Part Short & Nifty May Fut Hold 1 Part Short. Kindly hold till next update

Good Trading To You!