Weekly Markets For 10th June- 14th June 2013

             I had mentioned in the Fridays' nifty daily that, 

"Bulls have been trying hard to move the market for past two days and has had some success today. Although the last minute sell off has been of some concern. The market has formed an outside bar pattern which indicates a short term reversal. A reversal confirmation will be visible only if nifty starts trading above 5974. A failure to cross this resistance can lead the markets to lower. The nifty has resistance at 5980-6000-6034 and support is at 5855-5800-5750."

              This is exactly what happened the markets opened gap down around the levels of 5900 and then sold of to the lows of 5886. The level of 5880 has been acting as a strong support for past 3 trading sessions. Every time the markets drift down to these levels a smart bounce occurs. I have been expecting the level of 5974 to act as strong resistance and the markets sold off exactly from this level yesterday. The fall was severe in the last 45 minutes and was arrested near the Thursday's lows of 5969. Although it did not break the lows but the broader markets too got sold off. This was not the case during the rest of the weekdays. The mid-cap and small-cap indices were under performing the major indices.

               During the entire week FII's were net sellers to the tune of 25.96Cr in the cash market and 3736.56Cr in Index Futures & 60.05Cr in stock futures. The huge pile up of Index future selling in the falling markets is a cause of concern. In most previous rallies FIIs were net buyer, pumping in huge liquidity in the market.

          Nifty is down 104 points for the week and has formed a hammer on daily charts with big upper wick indicating huge selling pressure at higher levels. Nifty has formed a big black body candle on the weekly charts indicating strong bearishness. The nifty is now trading in the tight range of 5980-5870. The greater the time it spends in this range the greater will be the vicious the move on the breakout. On the daily charts the markets have closed below it 50DMA (at 5887) but is still above 20WMA (at 5875). The 20WMA can provide a support for nifty and it can give a small bounce. Also nifty still trades near the lower trend line of falling wedge. 

             With the bullish closing of Europe and US markets on Friday, the markets are expected to open slightly positive. In past few days I have observed that the Asian markets have been of more influence than Western markets. But nevertheless a 200 point rally in Dow can not be ignored by any market.  The market has a strong support in the range of 5853-5844 which is a gap and 50% Fibonacci retracement. This support can be tested this week, however a breach of this support will open down side to the levels of 5770-5720.

              ROC & MACD continues in Sell mode and has turned negative. RSI (41) continues in Sell mode suggesting the momentum is bearish. MFI continues to fall, suggesting money flowing out. ADX has been reduced to 22, indicating the loss of uptrend momentum. OBV too has given a fresh sell signal by going below previous bottom. So, majority of the oscillators indicates continuation of bearishness.

               The Nifty open interest based PCR has reduced to 1.05. For the June series, highest Open interest build has shifted from 5900 Put to 5800 Put and 6100 Call. This suggesting the market range to be 5800 and 6100 levels. The 5600 Put has started building open interest which is expected to be the next support level. The support for the nifty is at 5853-5770-5720 and resistance is at 5990-6052-6092.

                  This week the markets will be watching the IIP data (on 12th June) and WPI inflation (on 14th June) to take the ques about the possible rate cuts in the RBI mid quarter policy review (on 17th June). RBI has been emphasizing on the CPI inflation more than the WPI inflation, for past several policy review meets. So keep an eye out on this data which is released along with IIP. 

Trading ideas for the week 10th June- 14th June 2013
Script	BUY/SELL	Pattern	cmp	target/s	Stoploss
Asian paints	sell	weeekly trendline Break down	4576.8	4520/4480/4375	4660
Bhartiartl	sell	cup & handle break down	288.3	284.75/282.5/274	295
gail	buy	bullish hammer (trade on gap up opening only)	307.05	311/314.55	306
hdcfbank	buy	bullish hammer (trade on gap up opening only)	676.15	683/688	670
ntpc	buy	support trendline	147.8	148.5/149.7	145.45
powergrid	buy	bullish hammer (trade on gap up opening only)	110.65	111.4/111.9	110
wipro	sell	resistance channel line	334.9	332/329.55	337

UPDATE 14th JUNE 2013
All Trades closed. One lot of each script is traded. Profit booked at first target by me. The entry price is price around 9.30 am for all trades. (Wipro not traded as opened above stoploss & NTPC the risk reward was unfavorable at entry point.)

Script	BUY/SELL	entry	target/s	Stoploss	exit	reached	amount
Asian paints	sell	4593.1	4520/4480/4375	4660	4520	4440	9137.5
Bhartiartl	sell	290.55	284.75/282.5/274	295	284.75	274	5800
gail	buy	307.4	311/314.55	306	306	sl	-1400
hdcfbank	buy	678.45	683/688	670	683	687	2275
ntpc	buy	149.4	148.5/149.7	145.45	No Trade	152.25
powergrid	buy	110.7	111.4/111.9	110	110	sl	2800
wipro	sell		332/329.55	337	No Trade
						NET	18612.5