SGX Nifty 26th 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 26th May 2016

SGX Nifty / Nifty Futures today did move up and had a stellar pullback from lower side levels of 7716 touched yesterday. The major news trigger locally was that Morgan Stanley upgraded India to “Overweight”  but just go back to our post and see

 this is what we had mentioned yesterday for 25th May 2016 “Whenever there is any positive news trigger that could lift the short term sentiment and that in turn could create a pullback those pullbacks must be used to short sell Nifty Futures / Nifty next month calls.”

This is what we had mentioned in our post for 24th May 2016

“This news trigger could possible act as a positive news and spur the Nifty forward but please keep in mind when such pullback does come though it will look like a new bullish cycle has started in reality it will either show false breakout and trap long traders or may just make a lower top and come crashing down from there”

 Most of our clients and regular readers of this website were extremely confused over the past few trading days and could not understand as to what strategy we were adopting.   Although our Nifty view remains the same which is sell on rise from a tactical trading stand point we were expecting a pullback and that was the main reason for covering 3 parts shorts over the past few trading days.  So what we did was covered shorts (3 parts) on lower side levels around 7750 spot Nifty Levels mentioned and then now we are reentering shorts on rise.  So keep in mind it is not only our view but also how we manage a trade and keep trading in and out so as to push our net costing higher which for now is almost above 8150 but even that is not that important what has been the stand out point is that we have been consistently making low risk entries and then end up making good profits.  So each and every trade that we have taken has ended up in making money even in such choppy markets (This is not a trending market so please do not expect trades every day and in turn gains of 500 point  every month, the reality of trading is that such phases do come and when such phases of market is playing out it is important to adjust positions and manage risk properly). As far as details of trades like when to sell and where to sell and how much to sell all these details will be given to clients live during Indian Stock Market hours.  (Those who are trading only on the basis of this post please use appropriate risk management and then only trade. Despite our bearish view we may choose to book profits and reenter same trades on bounces as and when we see them so please keep in mind that we do and will keep taking tactical trades from time to time as and when we see a opportunity)

Nifty Share Price / Nifty Chart as per our analysis does not show much higher side move from here (please keep in mind I am not writing this post so as to predict the exact top free of cost in a open post). As per our Nifty Futures Tips / Nifty Prediction given to our clients our overall Nifty view remains the same and we once again reiterate that these are prices to sell these prices are not to buy. In fact at appropriate points Nifty Futures is a short selling candidate.  The point that we have been making is that the entire rally that has started on 29th Feb 2016 has been a global rally and Indian stock prices have not rallied in isolation but rather all world markets have rallied and we do not see Global Markets moving much higher. The Global Stock Markets in later part of Feb 2016 had priced in a dooms day scenario and now it has priced in a super bullish scenario.  Most Global stock markets are suggesting that everything in the Global environment is ok and growth is back in the world economies but as per our analysis we do not think that is the case.  It is just that from extreme pessimism the markets have now moved to extreme optimism but as per our analysis of all world indices we do not see that optimism continuing for long. Sure the party of risk off trade can go on for a few more trading days but we do not see that risk off trade sustaining with the current global back drop. The important point is that earnings growth has been missing and at these valuations we have never seen anyone making money in the history of investing  and since we are followers of W D Gann we strongly believe that Future is nothing but a repeat  of the past. So no one in the investing world will make much money or rather any money by investing at these valuations. Nifty trailing valuations system that we have developed has almost reached 22. All major tops for Indian Stock markets have been between 23.5 onwards.  Once again we are reiterating that around 7000 levels was to buy at sub 8000 levels all the positive news is in the price. Good Monsoon, some bills being passed in the parliament or any other positive news is in the price. In fact FED if gets the data right then we do expect them to raise rates further, in such a environment where Growth is slow and Funds are going to move out of Indian Stock Markets over the next few months investing or buying fresh around these levels does not make much sense to me.  I personally do not subscribe to the green shoots theory that has been advocated by many and if you go back to our 3-4th week of Feb post we had clearly mentioned that around the time of this rally ending many traders and investors will start talking about 10500 also, all those levels will come but before that we see  once round of panic in the Indian Stock markets and Global stock markets. Please trade carefully and extreme caution is advised.

If we take a case of astro cycles and time cycles then the important point to keep in mind is that astro cycles have been showing us the price top since the past almost one month but keep in mind that price top does not mean immediate fast fall from there. Since many planets are still retrograde and some other astro cycles are keeping the markets within a tight trading range.  Overall astro cycles are suggesting that news flow of short term sentiments will keep getting positive like the one today and everyone will start talking about 8100 and 8400 once again but we do not think those levels will come or even if does come will sustain. We do not see Nifty sustaining on the higher side (our view is valid for the next few months and not for the next one week only.)  As per our wave analysis we see lack of speed and momentum on the upside. Nifty has now taken well over 7 weeks but still after 7 weeks we are exactly or more or less right there. 7 weeks back Nifty was at around 7800 and even after so much time has passed Nifty has not taken out 8000. (And now even if it does touch 8000 it won’t matter because time has expired for the bullish move so the move even if comes to 8000 has no significance in terms of price structure or wave counts for us. I am not suggesting 8000 levels just explaining that now it has no significance). Let me give you a e.g. for a child getting a cycle is of significance, if a grown up at the age of 35 gets a cycle it is irrelevant for that person. In a similar way reaching 8000 would have been a significant move 8 weeks back. It has totally lost all of its significance now.

Use dips to buy Msl, Bajaj Hindustan, Renuka sugar, Eid Parry, Tata Coffee. Wait for our message to reenter Nmdc and Kesoram. There was a great confirmation for us with respect to Maharashtra Scooters Ltd (MSL).  Value investor and Joint MD of Motilal Oswal Securities Mr. Ramdeo Aggarwal has bought good qty few days back in the company (Mr. Ramdeo Aggarwal is known to buy high value stocks and goes on to validate our analysis too in the company). We maintain our buy on dips in Msl. 

Chat Transcript for today is updated below

Good Trading To You!

[08:59, 25/5/2016] +91 90040 79145: Gm
[09:00, 25/5/2016] +91 90040 79145: Positional Trade Update Nifty June 7600 Call Hold 1 Part Short
[09:00, 25/5/2016] +91 90040 79145: Wait for msg to sell more
[09:18, 25/5/2016] +91 90040 79145: Positional Trade Update Nifty Sell 2nd Part @ Cmp. Trade In June Fut.
[09:19, 25/5/2016] +91 90040 79145: Confirmation positional trade update Nifty 2nd Part sold
[09:19, 25/5/2016] +91 90040 79145: Positional Trade Update Nifty June 7600 Call Hold 1 Part Short & Nifty June Fut 1 Part Short. Hold Till Next Update
[09:20, 25/5/2016] +91 90040 79145: Positional Trade Update Nifty June 7600 Call Hold 1 Part Short & Nifty June Fut 1 Part Short. Hold Till Next Update
[09:20, 25/5/2016] +91 90040 79145: Total 2 parts
[09:42, 25/5/2016] +91 90040 79145: On rise we will be selling 2  more parts pl be patient and wait for msg to sell
[09:58, 25/5/2016] +91 90040 79145: Positional Trade Update Nifty June 7600 Call Hold 1 Part Short & Nifty June Fut 1 Part Short. Hold Till Next Update
[10:00, 25/5/2016] +91 90040 79145: Wait for msg to sell more
[10:00, 25/5/2016] +91 90040 79145: Positional Trade Update Nifty June 7600 Call Hold 1 Part Short & Nifty June Fut 1 Part Short. Hold Till Next Update
[10:01, 25/5/2016] +91 90040 79145: When to sell more we will update for now hold as told
[10:03, 25/5/2016] +91 90040 79145: Usdinr hold 1 part sell as told
[10:04, 25/5/2016] +91 90040 79145: Usdinr hold 1 part buy as told
[10:04, 25/5/2016] +91 90040 79145: Usdinr hold 1 part buy as told
[10:13, 25/5/2016] +91 90040 79145: Hold positions as told
[10:13, 25/5/2016] +91 90040 79145: On rise we will sell more
[10:14, 25/5/2016] +91 90040 79145: Reiterate do not see Nifty sustaining in higher side
[10:32, 25/5/2016] +91 90040 79145: just for your info http://www.moneycontrol.com/news/buzzing-stocks/raamdeo-agrawal-buys-sharesbirla-corp-mah-scooters_6728961.html
[12:02, 25/5/2016] +91 90040 79145: Hold positions as told and wait for msg to sell more
[12:28, 25/5/2016] +91 90040 79145: Positional Trade Update Nifty June 7600 Call Hold 1 Part Short & Nifty June Fut 1 Part Short. Hold Till Next Update
[12:29, 25/5/2016] +91 90040 79145: Hold positions as told and wait for msg to sell more
[12:29, 25/5/2016] +91 90040 79145: When and where to sell more will update
[12:29, 25/5/2016] +91 90040 79145: Upsides won’t last
[12:29, 25/5/2016] +91 90040 79145: Shanti sea eat lunch and come
[12:30, 25/5/2016] +91 90040 79145: Screen ko Matt chipko
[14:00, 25/5/2016] +91 90040 79145: Positional Trade Update Nifty June Fut Sell 3rd Part @ Cmp
[14:00, 25/5/2016] +91 90040 79145: confirmation Nifty June Fut 3rd Part sold
[14:00, 25/5/2016] +91 90040 79145: Positional Trade Update Nifty June 7600 Call Hold 1 Part Short & Nifty June Fut 2 Parts Shorts. Hold Till Next Update
[14:01, 25/5/2016] +91 90040 79145: Those holding positions in dabba please roll to june series
[14:01, 25/5/2016] +91 90040 79145: Positional Trade Update Nifty June 7600 Call Hold 1 Part Short & Nifty June Fut 2 Parts Shorts. Hold Till Next Update
[14:02, 25/5/2016] +91 90040 79145: Please Note 3 Parts are active now
[14:02, 25/5/2016] +91 90040 79145: Positional Trade Update Nifty June 7600 Call Hold 1 Part Short & Nifty June Fut 2 Parts Shorts. Hold Till Next Update.
[14:02, 25/5/2016] +91 90040 79145: reiterate we do not see Nifty sustaining on higher side
[14:13, 25/5/2016] +91 90040 79145: When and where to add more shorts we will update. Overall as per our analysis we maintain that we do not see Nifty Futures sustaining on the higher side and we do see Nifty overall trend lower. As we have said that from time to time pullbacks will come and we were expecting this current pullback since the past few days and that was the precise reason for covering 3 parts shorts inspite of seeing Nifty Futures coming lower from a positional stand point
[14:13, 25/5/2016] +91 90040 79145: Positional Trade Update Nifty June 7600 Call Hold 1 Part Short & Nifty June Fut 2 Parts Shorts. Hold Till Next Update
[14:13, 25/5/2016] +91 90040 79145: Hold positions as told
[14:13, 25/5/2016] +91 90040 79145: wait for msg to add more shorts
[14:14, 25/5/2016] +91 90040 79145: Be patient and wait for msg to sell more. Gaii matt karo and please strictly follow msg and trade
[14:14, 25/5/2016] +91 90040 79145: please avoid any interpretation trades
[14:14, 25/5/2016] +91 90040 79145: do not do any over trading please
[14:15, 25/5/2016] +91 90040 79145: trading is a process not a event
[14:29, 25/5/2016] +91 90040 79145: kindly follow msg and trade. please do not do any interpretation trades.
[14:37, 25/5/2016] +91 90040 79145: Positional Trade Update Nifty June 7600 Call Hold 1 Part Short & Nifty June Fut 2 Parts Shorts. Hold Till Next Update
[15:02, 25/5/2016] +91 90040 79145: Positional Trade Update Nifty June 7600 Call Hold 1 Part Short & Nifty June Fut 2 Parts Shorts. Hold Till Next Update
[15:29, 25/5/2016] +91 90040 79145: Positional Trade Update Nifty June 7600 Call Hold 1 Part Short & Nifty June Fut 2 Parts Shorts. Hold Till Next Update