Tech Musings :- Nifty

I have been expecting some sort of price correction in nifty before further up move happens. I gave a sell call in my previous post on 13^th June 2014, when nifty was trading at 7545 levels.  Nifty hardly fell 100 points from there to make a low of 7421 and had bounced back to make a high of 7558.

It seems that nifty will break above the downward sliding channel and move up towards 8200  levels and we will witness a swift and sharp pre budget rally.

Summary:-

1.       Get long on nifty at current levels (7558)

2.       Keep a stop loss of 7400

3.       Target for nifty is 8200+ 

Tech Musings :- Curde oil

I have been continuously bearish on crude oil since last one and half year and my view was completely wrong. In last two years crude oil has largely stayed in a range and refused to correct. In my last post on crude written on 10^th Jan 2014 I called for a 30% correction in price of crude oil.  In that post I wrote, “Similarly the second chart is a yearly chart of WTI crude. WTI crude is having a strong support at 87 – 90 levels. Once this level is broken I am expecting WTI to fall upto 70 USD levels in current year.”

Although the sell call was never triggered the view had proven completely wrong as crude made a bottom of 91.26 and have moved up 15% since then. 

If we look at the current chart of crude oil we can see that Brent crude has been consolidating between 100 to 116 USD levels. Any break out above 120 will lift the prices to 150 and beyond

Similarly if we look at the chart of WTI Crude it is consolidating between 90 to 112 levels. Any breakout above 115 will move the prices to 150 and beyond.

If we look at the long term chart of crude oil we can see that it is trading in a channel. The support for this channel lies at 90 USD and the target for the breakout come at 170 – 200 levels. This ensures my view that once crude moves above 120 we will see swift upward movement in prices of crude oil.

Summary
1. Buy crude oil at current levels of 106
2. Keep a stop loss at 90

3. Target for crude oil is above 150

Tech Musings :- Nifty

Nifty has formed a shooting star in weekly chart. Moreover we are trading at the upper end of the channel.  It seems that nifty may see 5 – 10% correction in coming days.  Even global markets are looking weak. It would be advisable to book some profits and exit the market.

Tech Musings:- Currencies

After sliding into sideways corrective mood, DXY is again looking poised for an up move.  From the current levels of 80.75 DXY can hit 85 levels. Any further up move will depend on DXY breaking 85 – 86 levels. I have been bullish on DXY since 2011 and updated my view recently on JAN 2014

I was expecting a sustained down turn in Euro since Jan 2014. In my previous post I wrote, “Euro faces stiff resistance at 1.38 levels. It seems that euro is now all set to start its downward journey.   Traders can sell Euro with a stop of 1.40 and target of 1.30 and below”

If we look at the given chart of euro, it made a high of 1.3993 and have corrected to 1.3548 since then. The downward momentum in Euro should continue and we may see levels of 1.30 and below.

Similarly I have been bearish on GBP since 2013. On 11th April 2014  I wrote, “Sell GBP with a stop loss of 1.6900” Since then GBP made a high of 1.6996 and have now crashed at 1.6764 levels. My sell call on GBP has not pared well.

If we look at the given chart of GBP I see two possibilities.

1.      GBP breaks above 1.70 and move up to 2

2.      GBP breaks down to 1.60 and below.

Although, GBP looks less bearish compared to EURO, but DXY is looking poised for a very strong up move. Looking at DXY I will favor the second scenario and will bet on the downside for GBP.

Readers may sell GBP at CMP with a stop of 1.7050 on weekly closing basis.

Summary:

1.      DXY will move up to 85 – 86 levels

2.      Euro looks weak and may fall to 1.30 levels.

3.      Sell GBP at CMP with a stop of 1.7050 and target of 1.60 and below

Tech Musings:- Indian Stocks.

Since May 20^th the portfolio has moved up by 14.5% compared to a 4.66% up move in Nifty.  Oil and Gas, Infrastructure, Construction, Sugar and metals sectors are doing extremely well and I expect them to continue to do well. Nifty is currently facing resistance at 7600 levels. I think it would be difficult for Nifty to move beyond 7800 levels without any correction.

Readers may add the following stocks to their portfolio