Sunday, June 3, 2012

Technical Analysis for Nifty

Nifty is in clear downtrend from last few weeks and is unable to close above critical levels mentioned in the previous posts to give any reversal . Lets check what's in store for next week with charts and observations :


1. Weekly Chart :

2. Daily Chart :

3. Long Term Moving Averages :

The caution for a probable whipsaw was mentioned in a post on 18-03-12 just after the Golden Cross happened based on long term Elliott Wave counts. Click Here

4. 5Week Ema Chart :

An interesting news article in Business Standard ( Click Here ) few days ago tells us about increasing bets on Nifty by FII's at Singapore Exachange and that the corresponding Volumes at NSE have been overtaken by the SGX Nifty .

SGX Nifty Futures is currently trading for 16 hours and it opens before NSE Nifty starts trading. Due to its long trading hours, SGX Nifty has seen volume increased by more than ten folds over the recent few years.There are many reasons to trade SGX Nifty Futures besides the long trading hours:
  • Bellwether Benchmark is used to measure the performance of NSE.
  • it is denominated in US dollar.
  • the commission rates are negotiable, hence low transaction cost. ( The  Transaction costs at SGX work out to less than half the levels in the Indian market ).
  • trade on an electronic trading platform.
  • permit to use MSCI Taiwan, Nikkei 225, MSCI Singapore to offset margins;
  • it can be offered and sold in the US (CETC Approved).
  • qualified members can pre-negotiate prices of large volume transactions (minimum 100 contracts) with SGX .
Trading Nifty futures on the SGX would also have saved global investors from the costs involved in transacting in rupees instead of their default currency, the dollar. The other reason for the popularity of the SGX is that it allows investors to take speculative bets on the Indian index, without registering with SEBI ensuring anonymity.

Now the important question is - does the analysis of Index futures eod data now onwards will be a futile exercise or may even give contrary signals ??

" Often, a rise in trading volumes of Indian indices in the foreign markets is viewed critically. Higher offshore volumes than the local market may disturb the equilibrium, as domestic traders are at a loss. In 2008, it was noticed that FIIs decided the direction of Indian markets in Singapore and took advantage of major events even before the Indian markets opened for trading. "


Kumar Technicals said...

Dear RV!

As usual fantastic work, keep continue.

Thanx & regards,


AAR VEE said...

Thanks Kumarji


Nilesh Patil said...

As usual fantastic analysis.
Thanks a lot.

Dharmendra said...



AAR VEE said...

Lots of Thanks Nilesh and MD Dharmendra for going through the analysis and leaving ur comments.

AAR VEE said...

A positive diversion in RSI in daily charts wrt lows of 4788 and todays 4770. Close above 4880 tmrw may bring a rally to 200dma.

As per an EW probability also the move from 4778 can be an X wave (after completing A-B-C from 5630) where A-X =4778-5020 and now in B-X (irregular)either a-B-X complete today or B-X complete and now in C-X. A complex corrective retarce of 5630-4778 may unfold now upwards.

Trade cautiously with low position size as chances of whipsaws in this move are high.

Prabakar said...

Thanks RV for giving a clear picture. I am visiting your site after a long gap and as always you continue to provide the crisp analysis.

AAR VEE said...

sorry Typo in my last comment -
4778= 4788 .

AAR VEE said...

Thanks Prabakar for ur visit and leaving a postive comment .

Cheers !!!

adamsmith said...

I read your post on Nifty Updates. That was amazing. Your thought processing is wonderful. The way you tell the thing is awesome. They are inspiring and helpful.

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