ADANIPORTS

Hello Readers!

Here's the quick analysis on Adani Port upon request from one of you-

ADANIPORT is currently trading at 342.50 after a slight correction of 12% over the last two weeks. The resistance marked on the chart below is at 363- an important level. In the past it has acted as a support level multiple times- two such instances have been highlighted on the chart below.  

Click to enlarge        Adani Ports Daily Chart as on 14/9/20

Turning our attention to support on this stock, it is not a level but a zone- 309 to 319.

RSI on the daily chart turned up from 30 ( marked by arrow) while price took support at the above-mentioned support zone. This is a good indication of strong underlying momentum.

To wrap it, adaniport looks positive. However, I would wait for sometime to take a long position in pursuit of a more favourable risk-reward-ratio. 330 seems like a good probable point of entry, however, the prevalent market circumstances at that point of time will have to be reconsidered.

A breach below 309 would be your cue to exit as it appears like a cliff fall below this support.

Regards,

Kavita Chamaria 

Bottoming out formation in BIRLACORP. CMP-Rs.555, Headed for Rs. 680+

BIRLACORP has bottomed out in the charts. I have been following this stock since Rs. 452. 1) The beautiful RSI positive divergence near the bottom was the first indication of a bottom after RSI went oversold. Usually such signals help identify horses for long term. The last time one such signal turned up was in the charts of Balrampurchini.

2) The formation of higher lows is another indication of an uptrend forming. The stock has moved up almost 10% in the last two trading sessions alone.

3) Another positive factor is that the volume picks up during uptrend in the stock.

4) RSI has also undergone range shift and is oscillating in the range of 70-40 instead of 60-sub 30 levels.

5)Pitching for early target of 680, this stock held the support of 491 very strongly during the correctionary phase before spurting ahead in last two sessions.

Nifty 50 Analysis: Drawing a plan of action

Dear Readers,

With the festive season behind us and the elections ahead, the market is in a lull state. Many are talking about 'action' coming back as elections draw closer and given that, it is only prudent to have a plan of action ready.

I have presented the hourly chart of Nifty50 below for analysis, but before we begin I would like to draw your attention to the indicator I have primarily used for this analysis.

Over the past few months, I have figured a new moving average about which you will not have heard anywhere else. This exponential moving average is exceptionally long, but works beautifully on daily and hourly and even shorter time frame charts. The 600 EMA is 3x longer and 3x smoother than our favorite 200 EMA, and if you listen to me, this will soon be your 3x favourite too. You can use the 600EMA label to search my blog for other posts mentioning this magical moving average and deciding the effectiveness of this underrated moving average for yourself. 

Coming to Nifty now. In the chart attached below, the red arrows are clearly marking the resistance which the 600EMA  has posed for Nifty on every rally. The one instance when the 600 EMA was breached was apparently an instance of a fake breakout. The ascending triangle visible on the chart is capped by 600EMA and upward trendline is providing it support. This is a classic ascending triangle. Now this is a continuation pattern. 

The market as I see it now is quite weak. The first support has been touched. A sustained breach of 10770 on closing basis would take the index to 10540 and also mean failure of the pattern which will lay the ground for deeper correction. I am betting on the failure. 

However, if the pattern succeeds, then on the event of a strong upmove above the 10870 level , with a closing on the daily chart , a proper throw back and subsequent continuation should take Nifty up to 11750 again. 

Nifty Hourly chart, captured on 10-01-2019

That is from my side on Nifty. Please do share your outlook on the index and the general direction of the market. I have been bearish since 11700 level. I was bearish at 10600 also and I will continue to be bearish till nifty does not break the 10000 level!

Disclaimer: I am holding a Nifty JAN 10300 Put. 

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That's all for today! Adios!

BATA INDIA (Update): Not convinced with the bullish story

Hello Readers,

In the previous post, I spoke about a lucrative short bet on Bata. The reason was simple, weak evidences on the chart.

Today I reanalysed the stock to try and come up with a revised analysis as the resistance has been breached and the stock is trending upwards. However, upon a close look, the story which is being told by the consortium of price, volume and RSI is not in agreement with what a strong bullish stock should look like. The evidences suggest that the ongoing rally is being supported by a few big players who are influencing the price. The retail participants are majorly selling the stock and we know that without retail participation in buying, no stock can continue its rally.

Please refer to the images below for a detailed analysis. I intend to look into the quarterly data soon to try and pick up on whatever is encouraging this 'spike' buying.

Adios, for now!

Nifty 50 - Ready for an upswing!

Hello Readers!

Nifty update:

Nifty has corrected steeply over the past weeks. In the last Nifty update, the macro reasons behind the steep fall in Nifty were stated. In the following days I also posted about the bearish engulfing pattern which had emerged on Nifty's Daily chart and indicated further weakness with an infograph on my facebook page.

Nifty went on to breach the 10200 low exactly as per the analysis stated and closed near 10150 level today. However, the bear trend has been going on for a while now and few evidence on the charts plus an inter-market factor indicates that bears might want to take a step back (temporarily only) for now and let the falling Nifty take a break from all the chaos.

Evidences indication pullback on Nifty's chart:

1. Appearance of the Spinning Top: The candle stick pattern formed on the daily chart of Nifty is a reversal pattern. The spinning top  is a pattern which indicates indecision and represents struggle between the opposing forces (bulls and bears) which determine the trading prices. 

The image below highlights the spinning top and explains the significance of the pattern. The occurrence of such indecisive pattern close to importance support levels is often an indication of bear trend reversal, even if its temporarily.

2. Trendline support: Trendlines offer strong support/resistance zones. Nifty has reached one such strong support level which I believe may help the index take a breather before resuming the corrective movement against the primary trend. The resistance by virtue of another trendline lies at the level of around 11100. 

3. RSI Positive Divergence:  RSI is my favorite indicator. It is a leading indicator and has on several instances given superb signals of trend reversals. Nifty's daily chart has shown one such positive divergence. A positive divergence occurs when the indicator does not forge a new low as compared to the price. This divergence is a hint towards underlying strength. Again, the occurence of the positive divergence near a trendline and close to the oversold zone increases its potency. 

The above three factors are purely technical related. An inter-market factor which also indicates that a reversal in Nifty is due is the weakness in Crude oil price. It has fallen over 5% on 23rd Oct that is today. Crude oil price and stock market are inversely related. Rising crude oil price was a major factor behind the falling stock market price over the past few months. The weakness therefore is expected to provide some strength to the index. 

The above 4 factors are in my opinion sufficient to keep the index from sinking further in the immediate future. The rest will unfold with time, till then, adios!