Hope You Didn't Miss the Buying Opportunity

In my last post on 17 May 2012 I had recommended a buy for Nifty at 4850 for a target of 5130. In today's trade Nifty has made a day high of 5145, thus achieving my target. I hope some, if not all, of my followers could take good trading decisions based on my predictions of trend reversal.in Indian stock market.

In my post dated 29 Apr 2012 http://archana-archdeb.blogspot.in/2012/04/get-ready-to-trade-way-ahead-for-indian.html  I had given a clarion call to traders to be ready to start trading. I had recommended to sell Nifty at 5300 level for a target of 4850, which was achieved on 16 May 2012. In fact on 18th May Nifty breached 4800 intra-day but closed at 4891. Again on 4th June Nifty breached 4800 intra-day but closed at 4848.

In the same manner I had predicted that Dow Jones will fall 1000 points to 12200 in my post on 01 May 2012 http://archana-archdeb.blogspot.in/2012/05/sell-nifty-may-futures-at-5330.html. And in first week of June 2012 Dow Jones had touched 12100 level. At the time of writing this post, Dow Jones is trading at 12547.

Coming back to Nifty and Indian markets. Nifty has completed my target of 5130, having risen from 4800 level. Now it will be prudent to watch the direction of Nifty before initiating any trade. Two clear scenarios emerge. They are as follows :-

1. If Nifty closes above 5145 then one can enter trade on the long side for a target of 5300. However there will be some selling seen at 5200, with Nifty encountering rough weather thereabouts. 
2. If Nifty closes below 5065 then one can go short in Nifty for a target of 4900, and may be 4850.

Fore-warned is fore-armed, so hope you trade well with the above information.

Nifty Moves Exactly As Predicted

In my post on 29 Apr 2012 I had given a call to sell Nifty at 5300 level and reiterated my stand again on 01 May 2012 post. For this sell of Nifty at 5300 level I had given a target of 4850. And Nifty achieved my target on 16 May 2012 with a day low of 4837. On 01 May 2012 post I had mentioned that Nifty will fall from 5300 in five steps and it did just that. Nifty fall trajectory from 5300 level was at follows :-

1. As the first step Nifty fell from 5280 to 4988 on 07 May 20122.
2. In 2nd step it rose to 5125 on 07 May itself.
3. As 3rd step Nifty fell from 5125 to 4869 on 15 May 2012.
4. In 4th step it rose to 4955 on 15 May.
5. As the 5th step it fell from 4955 to 4837 on 16 May 2012

The fall to the level of 4850 having been completed, now Nifty is ready to climb up to 5130 level. I hope those who heeded my advice could make profit by selling Nifty at 5300 and covering it at 4850. I also hope traders could reverse trade at completion of wave C and buy Nifty at 4850. Now go long in Nifty till 5130 level with suitable trailing stop loss.

Sell Nifty May Futures at 5330

As indicated in my last post on 29 Apr 2012, Nifty is inching towards 5300. If you recall, I had advocated a Sell at 5300 level in my last post. So be ready to execute your trade at 5300 Nifty spot. And when you sell Nifty May contract you should look to sell at 5330 with a stop loss at 5380. When you sell Nifty May Futures at 5330 you can expect to gain 400 points from the expected fall in Nifty.

If we look at Dow Jones for indications, we find that there is a likelihood of Dow falling to 12200 level from its current level of 13200. That is an expected fall of about 1000 points from current levels. This fall will most probably happen in five steps, when Dow will execute a Flat correction. When Dow falls 1000 points from current level, then there will be some panic reaction even in Indian markets and we can expect Nifty to fall.

Nifty on its own is also on the verge of completing its correction from 5300 level, as discussed in my last post of 29 Apr 2012. Remember by falling from 5300 level Nifty will be completing wave C of its correction. So go ahead and sell Nifty May Futures at 5330 with stop loss at 5380 for a gain of 400 points, when markets reopen for trade. Most probably this expected fall in Nifty will also happen in five steps

Get Ready To Trade : Way Ahead For Indian Markets

Since 22 Feb 2012 Indian markets have been slamming the investors and traders alike. There has been total lack of direction where trend has been missing from the markets. It has been a difficult time and hence traders have been particularly frustrated. Not that investors have got any respite, but those who are not in F&O segment of the market can still claim to be relatively safe from the market mauling.

The reason for such prevailing market conditions is quite simple. The market rose at a furious pace from the lows of 20 Dec 2011 to the high of 22 Feb 2012, almost in one huge step. Nifty rose from the low of 4531 to the high of 5630, an advance of about 1100 points in just two months, which can be considered as a spectacular rise. After such a hectic move up, the market has decided to take a well deserved breather. Nifty has moved within a band of 500 points since 22 Feb 2012. Sideways movements always baffle people and test the patience of even the most professional players.

However there is good news for the traders and investors alike. This sideways movement of the markets is coming to an end. Very soon we will again have a trending market and so be ready to take advantage of the emerging trend. In the ensuing elaboration I shall be talking only about Nifty and those following other indices can co-relate to those indices.

Nifty closed at 5209 on 27 Apr 2012.  From here Nifty has a resistance at 5300. This means that I am foreseeing Nifty to rise up to 5300 level and no more in the near term. That should complete wave B of the correction that started in 20 Dec 2011. From 5300 Nifty, the wave C of the correction should begin its southwards journey  and should take Nifty to level 4950 or may be even 4820. So you can short Nifty at 5300 with a stop loss of 5350 for a target of 4850.


But in case Nifty closes above 5390 then we can go long in Nifty at 5400 for a target of 5800 with a stop loss at 5350. This to my mind is an unlikely outcome, considering all prevailing micro and macro headwinds.

I shall be back with more details as the trend unfolds. I can assure you that there are very interesting times ahead and the second half of 2012 will be very rewarding for brave-heart opportunists and contrarians. So gear up to trade the evolving trend

Truths About Defence Deals And More

In recent days we have been shocked to find our most trusted pillar of faith shaking right before our eyes. Yes I am referring to Indian Army and the various forms of allegations and counter allegations flying thick and fast between the Army and the political class. It is both intriguing and painful for all of us to find our country's greatest strength getting embroiled in controversies. We gasp as each day unfolds fresh allegations and insinuations involving Indian Army and its Chief. So its time we try and view every contentious issue involving the Army in perspective and logically draw conclusions. Below is my humble attempt to do just that so as to be able to absorb everyday news flow without jumping out of one's skin, not knowing whom to believe and whom not to.

Age Row of Army Chief
Initially we were made to believe as if the Army Chief had fudged his date of birth (DOB) and was a cheat. That was the general impression one got from the news reports which were made public initially, if you recall. Later as the story unfolded it became clear that Gen V K Singh was perfectly right in defending his actual date of birth and has been  waging a battle with the organisation for a long time over his correct DOB. What is most surprising is that it is not difficult to amend the records based on the Birth Certificate and yet this simple exercise has been allowed to become a national row.

Even at this belated stage the Birth Certificate should be the criterion to fix the DOB of Army Chief and correction should be made in his records. After doing so if the political class and the hidden powers that be, want the Army Chief to retire on 31 May 2012 to make way for Lt Gen Bikram Singh, that also can very conveniently be done by sacking Gen V K Singh. Who's stopping the political masters from asking the Chief to step down by invoking any or all of the supposedly ethical issues presently at offer. By doing so the Govt would then have solved at least one of the vexed issues, which even the Supreme Court has managed to sideline.

Tapping in Defence Minister's Office
Here again the news was so tactically made public that it pointed an accusing finger at the Army Chief. The needle of suspicion was constructed in a manner that the public was made to understand that the Army was keeping illegal tabs on Ministry of Defence (MoD) and the Defence Minister. If that was such an open and shut case then what is stopping the Govt to sack the Chief and make him stand trial. But the truth is far from the impression that was given to public. The intelligence agency functioning at MoD level is Defence Intelligence Agency (DIA) which is directly under the Defence Minister and not the Army Chief. Then how on earth can the Army Chief plant a bug in MoD unless an establishment not under him connives with him? Really far fetched!!

Even then, where is the investigation report on the bug-scam? To date, on a matter as sensitive as tapping of MoD, no action has been taken. This embarrassing case has been promptly made public by MoD officials but no follow up has been forthcoming from them. Details of what device and where it was planted and the modus operandi of the miscreants have not been made public. One can only wonder why!

Letter Leak
Confidential letter written by Gen V K Singh to Defence Minister and the Prime Minister has been leaked in the public domain. The letter brings out in details the deficiencies in men and material that the Indian Army faces. Its a matter of grave concern since it outlines the defence unpreparedness of the Indian Army. Army Chief by voicing his concern through the letter has done well to make his political masters realize the gravity of the situation. But the letter should not have been made public. The question is as to who could have played this mischief. It is childish to think that the Army Chief would have done it. He would be the last person to do so since it would surely be akin to committing suicide. Army Chief has strongly condemned this act of high treason and has called for thorough investigation to nab the culprits. We sincerely hope that this time around this case is solved and actual culprits are made to stand trial for treachery. This case must not be allowed to be forgotten like the phone tapping case.

Nevertheless it is worth mentioning that what has been mentioned in the leaked letter was already known to the public for quite some years. In fact all defence analysts had known these facts for quite some time and the same had been chronicled in various magazines over the years. Even MoD was seized of these supposedly startling deficiencies as it collates all these data on a periodic basis though departmental reports for defence procurement. What Gen V K Singh did by writing that letter was only to draw urgent attention of Prime Minister and Defence Minister on this issue of utmost importance relating to defence preparedness of the country. Lets hope that we do not shoot the messenger who has given a wake up call to the mandarins of power for the sake of national security.

Offer of Bribe for Tatra Vehicles
Gen V K Singh opened a can of worms by making public that he was offered a bribe for recommending purchase of a tranche of 600 Tatra vehicles for Indian Army. The Army already has inducted 7000 such vehicles in the Force. Army Chief has commented that these vehicles are sub standard and are also exorbitantly priced. These are damning observations and brings to fore lot of graft in defence procurement. The man, accused of offering the bribe, has been named and is a retd officer of Army - Lt Gen Tejinder Singh. He has been with DIA and is a very influential man. Here is the link to know who Lt Gen (retd) Tejinder Singh is http://www.sunday-guardian.com/investigation/who-is-lt-gen-tejinder-singh

Notwithstanding all that is being said about the bribery scam by politicians, I think Gen V K Singh stands vindicated by what CBI has unearthed so far. There is lot of truth in what the Army Chief has said, because CBI has grilled the Vectra chief for the third time today and has issued instructions for him not to leave the country. Vectra is the company which has controlling stakes in Tatra. If the country has been been duped for all these years we laud Gen V K Singh for having the courage to call  spade a spade. We owe it to him for making a revelation that can rid this country of graft in defence procurement, much to the discomfiture of MoD officials who are responsible for defence procurement.

Now it is for you to judge whether Gen V K Singh is a patriot or a traitor. Is it more important for us to clean the system or to quietly fade into obscurity as is desired by our politicians and bureaucrats? Time has come to accept no nonsense in cases of graft eroding the very edifice of our country, whatever be the price.