Wednesday, February 17, 2010

Nifty Crosses 4860

One of the reader named "Amit" wrote me this which I have pasted here.
He said someone told him that Nifty will go below 3000 and hence sensex will be below 6k.....
He(that guy) cited all reasons for that which Amit wrote it here  and that guy who predicted this also saved Amit's voice to later prove himself how much he was correct and how big mistake Amit did by not following him.
I wrote to Amit at that time whether that guy will come out and accept if nifty breaks 4860 that he went wrong!.....and that has happened.Now what....
Now what will happen I will tell you.
If Amit will go to that guy he will still say , there is still one resistance of 4950 and that will never be crossed.But he was so sure of even not crossing 4860 why he is now after 4950 and if that is crossed then what?What will he say?
And I am SURE even 4950 is also going to be broken.....and nifty will cross again 5000 .......
The bottomline is , do not ever depend on charts.Charts never show you how market will move.Market charter it's own course.Charts do not decide market course and market also breaks charts levels and resistance and not the otherway.
Those who wants to believe charts and technicals may do that but please don't discuss with me about charts and technicals......I donot believe in it at all..........but I appreciate Amit's effort to put it down here so that I can atleast show here that it is not the charts that decide market course ..........

Hi Rajeev

Below written analysis given by that guy in defence for his call.
Sice the word limit is low i am putting it in parts.
Our market has turned weak! In all likelihood, a bear market is certainly a possibility. The weakness signs that lead to the onset of a bear market are also visible in major markets like the US as well.

While a pullback rally to 4860 is entirely possible, the probability of the downtrend resuming soon enough is quite high given the nature of the weakness in weekly charts...............
Once we put things in perspective this becomes quite clear as to why we should reassess the situation and shift our stance about the condition of the market. First, till date we have seen three intermediate upswings in this major uptrend that began last year on March 06 from the Nifty level of 2539.45; the first one got terminated at 4693 on June 12: a run of 2154 points in 14 weeks from the low of 2539; second upswing from July 13 till Oct 20 lasted for 14 weeks and had a price swing of 1263 points from 3918 till 5181; and the last one from November 03 last year till January 06 this year was much shorter—a little over just one-third in price terms of the first intermediate upswing mentioned above—it was a swing of 772 points that lasted for nine weeks. The upswings, thus, have become progressively smaller in terms of prices and in time terms first two had been equal and the third one lasted for a much shorter span of nine weeks. This phenomenon of time and price swings getting progressively smaller in intermediate uptrends is definitely a sign of the bull market weakening...........
.........Now, let us look at the corrective downswings in between: first one lasted for 31 calendar days from June 12 till July 13 last year, price swing was of 675 Nifty points; second one is much shorter in time duration—it was a sharp downswing—lasted for only 14 calendar days from October 20 till November 03 last year, and had a price swing of 643 points. The current downswing is already 31 calendar days old the bottom has not been established as yet. Its price amplitude so far has been 618 points. If it were to fall below 4635, by any chance, even on intraday basis it would be the largest downswing in terms of both price and time. This suggests a probable turning of the major trend from up to down.

However, calling the current market a bear market would be a bit too premature since the 200-day moving averages (MAs) are located at 4650 (both EMA and Simple MA). Since this would be the first test of the 200-day MAs--after they have been crossed from below by the Nifty on Apr 23, 2009--there is every possibility of a rebound after testing it or from a level close to it. Notwithstanding such a possibility, we can say that the Nifty would find it really difficult to cross 4950 levels now: as it is that has established itself as a strong resistance and two, the downward-sloping 89-day EMA is also located close by, which would now act as a strong supply point......
This bull market for all practical purposes has been driven by liquidity in domestic economy and FII inflows. Both are on reverse gear at the moment. FIIs are mostly sellers and the RBI has already started tightening. Internationally, Australia and China have also opted for monetary tightening and they did it much earlier than we did. The signs are pretty ominous for the US as well: during the last week of January, FED deputy chief Kohn had already hinted and warned banks in the US to prepare for higher interest rates. The very-important 70% mark has not been breached by the number of stocks in the S&P 500 that are above their 200-day moving averages; however, it is almost there and might just achieve it unless there is a sharp recovery right away.

Unless the governments and the central banks decide to inject massive quantity of money again to stem the rot in PIIGS (Portugal, Italy, Ireland, Greece and Spain) countries the situation would not become better for world markets. Japan’s debt level is also worrisome at 220% of the GDP. Bond markets are jittery and the commodity markets have also lost their gumption being dependent more on the fuel of liquidity: copper and lead have slid quite a bit again.

Smiles and Tear rarely meet with each other but when they meet they create the most gorgeous moment of LIFE..


  1. hi RAJEEV,how r u?I was in cash 40% some time back but now am fully invested in the last minor correction,thaks for giving me the courage to invest fully.

  2. This comment has been removed by the author.

  3. Markets in short term and extremely short term and in day trading are a sentiment of ego, anger, short term pressures, worries, operators, leverage driven traders, greed, Stop Losses, Targets and Tips driven. Valuations driven, Fundamentally going quite cheap, future leaders, growth business, those not identified by mutual funds and FII's in a big way, P/E, P/BV, Market Cap and EPS are always winners in the medium to long run they won't be hurt by market sentiments driven in the short term.
    Example when market moves up not everything moves up and when market moves down not everything moves down

  4. Hi Rajeev

    According to that report the barrier is of 4950 and not 4860 on nifty. Pls. read that report again.

    Moreover it was something which I thru your blog want to share with all fellow readers, now it feels you are not appreciating that fact and are somewhat sarcastic.





  5. hi, rajeev ,tell about aries agro

  6. amit,

    i think u got rajeev totally wrong. He was just refering to your example to show that there are ppl who try to create panic based on charts. I have not seen anything that points towards you. we do appreciate you for brining up the "market khabar" and such information.

    Please keep posting those if at all you have any.


  7. Hi Amit,

    You got Rajeev totally wrong. Rajeev here is advising us not to follow technical. Fundamentals are the right courses. Whatever Rajeev has advice most of his recommendation has enrich all of us. I think most of the reader appreciate his work. I am sure you have misunderstood him and he was just referring you that we should not listen to these technical guys. Nobody can predict the course of the market. Pls take his advice in a positive way. thanks

  8. Amit,
    Well, let us see then what happens with 4950.....reading ur comments makes me feel that ,there is no one like that,it is you who has said that.....why u have to take others name then....
    What is mean by" While a pullback rally to 4860 is entirely possible,"
    explain me this first....what does it mean by that.....
    seems take on the charts , you didn't like it and that leads me to believe that you are the same person who has written that.....That's fine....
    now if 4950 is broken then what will have you to say.....take my words....4950 is also going to be broken.......

  9. Dear MR Rajeev

    how about Indowind at current rate of Rs 45, last quarter results are not impresive so the price come down from Rs 60 to Rs 42, Can you please give your valuable opinion, you also mentioned earlier this company will benfited from carbon credit

  10. Amit,
    I am not scarsetic nor I am sacring anyone here...I am trying to expose the weakness of is ur choice to go with charts as u r doing so.....
    If you believe in charts you can do so.....but then charts comes in play ,it is a ST call for say a day or two or daily trade and hence I have no replies for such clear when u ask me anything whether u r asking for MT to LT or for tarding and making quick bucks.....

  11. honey,
    Aries Agro is my old call and looks excellent to me....

  12. nirash,
    Indo Wind at 40 looks good....but still not sure...still have to look in still much convinced

  13. Hi Rajeev

    First of all I also don't believe in charts but when someone told me the levels, I out of sheer anxiety put the whole mail across to you, since I follow your blog religiously and I believe in your calls and the logic behind them. I am no chartist nor did I take my investment decisions based on charts. Its your right, whatever you can make your opinion about me, and if you are willing I can provide you with all the details of the guy who gave me this report.

    Whatever is written in this report is neither created by me nor it is my manifestation.



  14. Amit,
    That is fine.But I don't understand the stand you took....where u feel I am scartestic......while reading my comments on it.....

  15. Hi Rajeev

    Maybe that was a wrong word I used and I apologise for that,Rajeev I am a bit frustrated since reading that report I have liquidated Rs 70 Lac shares in my portfolio. Which consisted of Apar Industries, Bharati Shipyard, Fortis Healthcare, Jindal Saw, Sundaram Finance, NHPC, and Marg Limited. Now I don't know what to do.

    Can you advise me a few stocks which I can buy in bulk and forget since I don't want to get into trouble again.

    I am expecting some guidance from you as always.Basically I have taken out my costing from the market and now whatever is left is just the profit shares.

    Suggest me some good stocks for a very long term portfolio investment. I am not not an ST or MT investor but a long term investor.



  16. Amit,
    U say u sold these stocks u wrote.Check the prices again and if they are still there, or not gone up much or gone down then buy them again......
    It is that simple....and I don't think they must have gone up in big way.....