Tuesday, January 3, 2012

Market Rally : 3-Jan-2012

On 2nd Jan 2012, NSE closed at 4648.
Let us estimate the downside and upside possibilities from here.

For entire 2012, From Jan to Dec, Market is likely to trade within a range from 5443 to 4431. It is a range bound market of 1000 points.

On long term, between 1-March-2013 to 21-Jun-2013, markets may hit high of 5657 and a maximum of 5961.


Friday, February 11, 2011

Techincal Chart update on 11th Feb 2011

In continuation with our previous chart analysis, our views in present market conditions are as follows:

(1) Till such time 5160 is broken in Cash Market (SPOT), there is nothing great to worry.

(2) But being close to 5160, there is a chance it may be broken. In such case, Nifty may fall to 4843. There seems to be very little support inbetween.

(3) Below 4843, NSE may test 4777. This level may be possible in the event of problem in Government stability etc.

(4) If 5160 is not broken, then the first target would be 5902, 6094 and 6649. This levels may be reached by 29th July 2011.

You can remain long till such time 5160 is not broken. If this level is broken, target levels need to be reworked. We would post a new article in such a situation.


Thursday, November 25, 2010

Nifty outlook : Long term : as on 26th Nov 2010

Long term trend we are in Elliot wave 1-4. 4th wave is expected to complete in 5726 or 5372, which is above wave 1. If market falls below 5372, wave pattern would change.

Hence investors can buy in parts at 5726 and 5372. for an expected price targed of wave 5 at 6490 and 6683 possibly between 17th of December 2010 and 29th of April 2011.

Preplexed by the price numbers and exact dates : that is the speciality of Mr.Arasakesari, author of this wave study.

Market : Short term trend : as on 26th Nov 2010

In the below mentioned chart, Projection retracement coincides between 6135 to 6171, which is the likely target for short term ( in days ).

Elliot waves C wave completes at 5735. Hence investors may go long with stop loss of 5735 for a possible price target of 6135 to 6171.

Now a bit of Elliot wave for beginners:
(1) Elliot wave consists of wave 1-5 followed by A-C again followed by 1-5 and so on.
(2) Wave 2 to Wave 3 is the longest wave.
(3) Wave 4 should not be below wave 1
(4) wave 5 should be above wave 3

Next wave is ABC Wave
(1) Here wave A is longer than wave 4
(2) Wave B should be above wave 5
(3) Wave C should be below Wave A

After completion of Wave C, next wave is Wave 1 of the next wave cycle.

Now correlate all these wave in the chart above and learn.

Market outlook : given on 11th June 2010

Following is an article that was published on 11th June 2010. Those few people who looked at this article were sceptical if this chart analysis and the write up would come to life. But to their surprise, the forecast of this chart came true. Do read them to understand it better.

To read original article click here: http://arasarideas.blogspot.com/2010/06/market-outlook-long-term-view.html

Often we are puzzled about the direction of the market. Many of us usually buy when everyone buys and sell in panic when everyone is selling. Though handling such instances could be psychologically challenging, the use of technical charts could come in handy in such situations.

After long market correction in 2008, Markets have actually started on an uptrend. But the actual potential of the market in the long term is little understood. That makes many book short term profit or loss.

For instance, today (11th Jun 2010) markets ended the week on a buyoant mode. Lots of positive news from global markets helped the domestic market rally by 140 points on the sensex to 17050 levels. And Nifty ended up at 5119 (+40 pts). Those few investors who had these technical views before hand bought boldly and are now sitting in rich profits. Many of the investors who are sitting on the sideline would be worried if the market has got some more steam left.

Here is a simple analysis of a technical chart.

(1) Nifty on 14-Aug-2008 was at 4430
(2) From 4430, Nifty fell to 2584 on 31-Oct-2008
(3) Now look into the table below. You would actually see the markets actually retracing the uptrend as per Fibnocci calculations.
(4) As calculated, markets have reached exactly 5301 on 9th April 2010 and have fallen down. Now market is now picking up and closed today at 5119

Now the outlook:
The first target of the market in the short term could be 5301, followed by 5478. But after 5301 itself, market could be in the long term uptrend leading to 6131. Beyond that you could see much higher values on the NSE.

Many may now wonder : what about the short term trend reversals?
Technically at each retracement levels, market could slide.

Markets could see major reversals on 8-Oct-2010, 25-Feb-2011 and 29-Apr-2011.
Probably we could touch all time high of 6131 by these dates.

Now with this picture in mind, Long term investors can stay invested and pick stock when ever market falls.

Option strategy

Our Agenda:
We are primarily going to sell (write) call and put option only on nifty (and not on stocks).

We need to understand the following:
(1) Nifty spot Price: This is the NSE index value
For Eg: NSE Nifty Spot price is = 5000
(2) Strike price (Call and Put price) should be 5000
(3) Check the price of call and put. Either it should be equal + or minus 10 points and the total should be above 300.
(4) Per Lot means a pair of Call & Put Option

An illustration:

Understanding Options

What is an Option:

It is the right to buy or sell but not the obligation.

For instance if you want to buy 1000 shares of TATA Steel at current price of Rs.500 hoping that the price would rise, you normally buy it by paying Investing 5,00,000 (500*1000). As the price rises, say it becomes Rs.600, then you may opt to sell booking a profit of Rs.`100 per share or Rs.1 lakh in total.

Instead, you can make an advance payment (premium) and hold on to 1000 shares of TATA Steel buy buying its CALL Option. In future, if the price rises, the premium also rises. Then you can square up (sell) the call option and book your profit to the extent of premium. It needs to be noted that the rise in premium need not be propotionate to the rise in share price.

Alternatively if the share price falls, then your call premium decreases and sometime you may lose money to the extent of the premium.

It would now be clear that you have unlimited upside potential but limited downside risk.

Types of Options:

Call option - It is the right to buy but not the obligation to sell
- Here the Profit is Unlimited
Put Option - It is the right to buy but not the obligation to sell

When you sell the call option, it is called Call writing. Here the profit is limited to the premium earned.

Methods of using options :
Either you can BUY Call or Put Option
You can write (sell) Call or Put Option

Concepts to understand:
In the Money : If the Nifty spot price increases by Rs.100, call will increase by Rs.75 to Rs.80.

At the Money : If the Nifty spot price increases by Rs.100, call will increase by Rs.50.

Out of the Money : If the Nifty spot price increases by Rs.100, call will increase by Rs.30.

In our theory we would enter the option trading "In Money or At the Money"