NIFTY View For Week 29 Dec -2 Jan
Wish all readers of this newsletter a very Happy, Healthy and Wealthy New Year 2015.
In year 2015 let's resolve to-
1. Learn the way 'Market Expert' trade
2. Trade with good Money Management and Risk Management
3. Trade for Consistent Profits
4. Trade with a proper Trading Plan
Today onwards we are adding a new section to this news letter -
'Learning Curve' - I will be writing on topics that a trader need to adopt to his trading routine. The topics can be quality/ discipline / method / caution / technology. Hope traders would like it and would gain some benefit of it.
We
had hinted at range bound market with negative bias for last week. We
had also hinted at small downside to Nifty. Last week was week of
F&O expiry. World over the traders are in holiday mood due to
Christmas and new year. As expected market have not shown signs of major
movement. This is expected to continue till the end of new year bash.
Technical Overview: Last
week Nifty made high of 8365 and low of 8147. This was roughly a range
of 220 points. Nifty has respected our resistance of 8350 and moved down
from there. On the last trading day of last week Nifty has given a
small sign of recovery. However this recovery may not last long. We keep
our stance, that if Nifty breaks our resistance of 8365 convincingly,
then it can move up to 8500. Support is near 8100-7960. A range bound
market activity on cards for next few days. This range is 8365- 8100.
Short Term (Few days to a Week) : Traders
may like to avoid trading for week to come. Unless Nifty gives us clear
direction. Very aggressive traders may sell Nifty near 8250 for target
for 8150. If Nifty breaks above 8365 convincingly, you may go long in
Nifty future for target of 8500.
Medium Term (Few weeks to a month): I
expect Nifty to remain within the range of 8600-8100 for a month or
two. Medium term Traders are advised to sell Nifty if it moves to 8500
of target of 200 points.
Long Term (Few months to Year): The
bull run in long term is very well intact. The current correction is an
opportunity to accumulate the value stocks at lower level. We are very
positive on Nifty continuing its upward rally this correction is over.
However correction can stay here for some more time to come.
View on Sectorial Indices:
BankNifty
is holding Nifty from fall. It has resistance near 18900. If this
resistance is broken convincingly it may move higher. However, if this
resistance is not broken a dip up to 18300 is quite possible.
CNX IT still not showing strength and may remain range bound
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Recommendations of the week:
Last week Net Profit - 11,875/-
Union Bank (Buy): Buy Union Bank near 241 for a target of 247. Maintain stop loss at 237
CIPLA (Sell): Sell CIPLA near 623 for target of 605. Maintain stop loss at 636
HINDPETRO (Sell): Sell HINDPETRO near 541 for target of 528. Maintain stop loss at 554
- The profit calculations are done considering Futures 1 Lot in each scrip.
Learning Curve:
Start trading
with a small capital. Whether you earn profit or not, ensure that you
do not loose money in trading. Trading is very simple while looking at
it superficially, but has lot to learn about. One of the biggest mistake
traders do is to ignore learning part. As pressing Sell and Buy button
is very easy. To start with do a simple thing. Prepare a trading plan
with fix objective. A trading plan can have following things:
- Reason / Objective for trading
- Amount Invested
- Segment to be traded
- Trades per day
- Max risk/loss per trade. Max loss per day
- Max Profit per trade. Max profit per day
- Max draw down in the capital invested
- Profit loss Ratio
- Amount invested per trade
- Read the plan everyday and fine tune it.
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