Mkts continue bull run, expect weak GDP data to trigger rate cut

P K Chaudhary
CEO Nifty T3 Terminal



The Indian equity markets extended their bull run for a fourth consecutive day today on expectations that a weak GDP growth of 5.3 percent in the second quarter will put pressure on the RBI to cut interest rates.

On the other hand, India’s fiscal deficit during the April-October period rose to Rs3.68 trillion, or 71.6% of the budgeted full fiscal year 2012/13 target. During the same period in the previous fiscal year, the deficit was 74% of the budget target.

Battling with weak consumer demand in overseas and domestic markets, the economy’s growth figures although has come more or less in line with estimates, but are still stuck near three year low. The slowing economy has already battered government revenues, leaving the government scrambling for ways to balance the budget and avert a credit rating downgrade threatened by ratings agencies Standard & Poor’s and Fitch.

“The growth is below the Reserve Bank of India’s trend growth expectation, and I think the central bank will cut rates further from here. I expect a repo rate cut in January and there could possibly be another cash reserve ratio cut in December,


After Goldman Sachs upgraded Indian equities to overweight, investment bank Citigroup today raised the Sensex target to 20,800 for end 2013 based on premise of 9.6/12 percent earnings growth for FY13/FY14 and a valuation multiple of 14.5 times —a slight discount to its 15-16 times longer-term average.

Even  BlackRock is aiming to go overweight on India. Andrew Swan, who manages about $3 billion as the head of Asian equities for the world’s biggest money manager, told the Reuters Global Investment 2013 Outlook Summit on Friday that Indian politicians will push reforms and economic growth will tick up.

What might be Govt. next move ?

The Nifty closed in the positive today. It is now expected to bounce till 5,642 before it heads ower for a target of 5,500 in the short term. The key supports in the immediate run will be around 5,581 and resistance will be at 5,642.The Nifty has broken a channel trend line on the downside by closing below the 40-daily moving average (DMA), which indicates weakness in the short term. The Nifty’s shortterm bias would remain negative until it closes above 5,660 for a target of 5,440. The medium-term outlook has also changed to negative, as the index has started forming lower tops and lower bottoms on the daily chart. It has also formed a bearish i sland with resistance around 5,660.On the daily chart, the index is trading below the 20-DMA and the 40-DMA, ie 5,660 and 5,642 respectively. On the daily chart, the momentum indicator is trading in the negative. On the hourly chart, the Nifty is trading above the 20-hourly moving average (HMA) and the 40-HMA, ie 5,581 and 5,610 respectively, which are crucial intra-day levels. The hourly momentum indicators have turned into positive. 


To meet its disinvestment target of Rs 30,000 crore in the current fiscal,  the government is likely to approve 9.5% stake sale in state-run NTPC, according to reports. The stock was down 3.46 percent. Additionally,  World Bank will also give India a record $70 billion  in remittances in the year 2012, topping the list of developing countries which are expected to receive a total of $406 billion this year.

To get the reform drive going, the government aims to pass bills opening up the insurance and pension sectors to foreign investors in the upcoming winter session of parliament, a minister said on Tuesday.

While the Winter Session of Parliament, beginning tomorrow, will be a key gauge of the way some recently announced economic reforms are to be implemented, worries over FDI in multi-brand retail could derail their implementation.

Our worry is that even a discussion on FDI in multi-brand retail will lead to heated debates and could lead to disruption in parliamentary proceedings. If the debate on FDI in multi brand retail is put to rest soon, we would hope that other reforms will also be passed.

P K Chaudhary
CEO Nifty T3 Terminal

IS IT SIMPLE PULL BACK ?

Dated 21-11-2012 trading analysis : As I predicted earlier we are not going so easily 5450 in near term nifty is still moving according to my calculation neither  it has given close below 5560 in future nor 5528 is tested sofor. 
So my dear friend what will be next move of nifty future I think in intraday again we will nifty future level 5581-90 then first target should be atleast 5684, 5702.
But ultimately my nifty future target in nov 2012 series is 5794 minimum & if mulayam singh takes U tern in FDI matter then who know 5915 in nifty spot is also posible.

Happy Trading
P. K. Chaudhary

100 billion question in every one mind what will be next move of nifty. If you analyzed past of nifty movement has never given easy profit in down side / upside.
I research past & found 5558 nifty spot was break out level in year 2010 and as you know history repeat itself.
What my seance is saying if nifty future take support at 5537-5546 & bounce back to 5788 in coming trading session there should not be surprised . The IInd reason of giving this arguments technically nifty spot should had not been broken 5808.94 (if it was simple replacement from 4531.15 to 5815.50 in nifty spot). And if my view is right then nifty could go attest 6123 in nifty spot in next or this month. Lot of option writer will be trapped who has sold 6000,5900,5800 call in this series.
IInd factor if 5540 in future is broken derisively broken & close below 5540 then serious downfall will be seen.
My trade will be if nifty future take support at 5540 & bounce back to above 5560 then long trade  can be initiated with stop loss 5539 for intraday target of 5623 (and positional target will be 5785)

Intraday channel is for Monday is 5458-------5537-------5623
                                                                      5546

BALASAHEB WILL ALWAYS REMAIN IN OUR HEART

When we loose such a special person in our life, time seems to stop. However, it is important that we start to live again with a smile on your face so that we can make his soul happy, as he is still looking at us even if we can’t.

Memory can tell us only what we were,
In company with those we loved;
It cannot help us find out what each of us,
Alone, must now become.
Yet, no person is really alone;
Those who live no more still echo
Within our thoughts and words,
And what they did has become
Woven into what we are.

Sri. Balasaheb was king of this world.  we can never forget Sri balasaheb in billions of years.

P K Chaudhary

CATCH STOCK MARKET MOVEMENT JUST LIKE SHIKARI

by - P K Chaudhary (ceo nifty t3 terminal)

Dear all Nifty T3 Terminal reader,
                                                     Today my view is not based on any technicality only based on sentiment basis. As i promised  last week market movement how to catch up will be my main agenda in next week. First of all we will have to understand why market moves in certain range in very long span of time. 

If you all people just imagine for example today potato is CMP is Rs. 20.00 per kg when new fasal is cut it is sold upto Rs. 7.00 per kg. but during nov to jan it is sold upto Rs. 20.00 per kg and if calculate average rate of potato that will around Rs. 12.00 per kg.

Just think this factor what will happen if you find rage Rs. 3.00 per kg that is never happened in past lower range is not broken 99% time.

If we consider upper range it is broken after a certain period of time not every year if you analyzed with past data you will found upper range is almost broken approximately after 4 year.

Now very important factor in how should trade index? 
                                                                                   Very simple analyze past 4 years data try to catch up lower & upper range just calculate average price of index number. For example if we analyze last 4 year index data we found 2250 (low of 2007-2008) in lower side & 6338 upper side if you calculate average rate of index that will be around 4200 is fare value of index plus one more think is also very important on a historical basis 10% annual return is also to be added. Approximately 400 point per year 400X4  1600 point & add 4200+1600 = 5800 is fare value in EOY 2012.

Now the question should you buy at 5800 nifty No…..No……No……. why because again here you have to calculate next 4 year average simply add 2000 point upside & 2000 point in down side. So next 4 year your fare range will be 3800 to 7800. 

Try to buy Index if you get opportunity 25% discount from right value of index which is 5800 & 4000 is your volatility range so simply subtract  1000 point from current fare value 5800 – 1000 = 4800 & safe exit level is 6800.

So simply we can say :

if buy at 4800 then downside risk in any situation is 3800 menace 1000 point risk.

If we buy at 5800 that will not be losing trade but you will get less return of your investment & waiting period will be longer.

If you are buying above 5800 simply you are paying little extra of average price of index on average basis.

Now very important factor will you get to buy nifty at 4800 I think yes because in index can move from 6338 to 2257 & IInd time 6338 to 4551. So why not 5670 to 4800 ?

One more things we should not miss where we can short the index. I always believe shoring index always risky trade for any index in world. In my opinion 5800 is center level of index for next 4 years average we can see 2000 plus minus point from CMP so some trader want to execute risky trade at 5800 place stop loss above .618% of range 4000 point that will approximately 6250 & wait for level 4800 to come.

If same method is done in nifty monthly level you people can get success 90% time.

I hope my view will help lot of trader all over world. 

Happy Diwali & Trading to all Nifty T3 Terminal readers. 

Waiting for your comments.


disclaimer

Again Break out still not 100% confirmed ?

P K Chaudhary (ceo Nifty T3 Terminal)
 
S&P CNX Nifty (5,697.70): The month-long range-bound trading seems to have been finally resolved during the week gone by. As observed in recent weeks, the immediate target of the Nifty is 6,000 and the price action this week indicates that the journey towards this target is underway.

The short-term bullish view would be invalidated if the Nifty falls below the recent swing low of 5,580. While a breach of this swing low would be a sign of short-term weakness, it would not affect the view of a rally to the 6,000-mark.

A fall below 5,580 would be a pointer that the index is still in a downward corrective phase and the rally to the 6,000-mark and beyond would be delayed. The index has to fall below 5,200 to invalidate the chances of a rally to 6,000.

In my view until nifty future  hold 5650  nifty future can go up 5870-5890 range in upward. & watch nifty future very closely at 5762 once nifty future crosses 5763 in upside it must hold this level to reach above 5850 plus. but technically my view is some think different in real situation comming monday nifty future will hit 5753 then suddenly drag down up to 5668 in down side watch here very very care fully 5650 must be hold.

COMMING SUNDAY 11-11-2012
THERE WILL BE TRADING STYLE IN DESI STYLE HOW U SHOULD UNDERSTAND INDIAN STOCK MARKET ?
WHY MARKET MOVE IN RANGE SOME TIME 5050, 5850, 5350, 6338, 4532 ETC ?

FIND ALL ANSWER THIS WILL BE MY 100% PERSONAL OPINION.

Intraday Trading Strategies Formulae - Day Trading For Beginners

Trading the financial markets has become extremely rewarding, for those investors that have mastered the intricacies of intra-day and other short-term trading techniques. Day-traders focus on rapid or short-term day-to-day methods to potentially profit from market movements. The markets traded are usually highly liquid index futures, currencies or stocks. Traders use either intra-day strategies designed to generate buy and sell signals within the same trading session, or short-term strategies designed to be open for a period of up to three days.

If you wish to day-trade then you must develop a strategy, for trading volatile markets that has historically demonstrated the required intra-day or short-term price ranges needed for success. The results from your testing should provide a reasonable expectation of profitability from your chosen market. The best financial markets to trade, in my opinion, are index futures or index forward contracts, which are tradable financial instruments that mimic the movements of stock market indexes.


I have developed a NTTRML strategy, for trading the NIFTY forward contract that is currently producing 46% annual compound return. The strategy is designed to exploit short-term market inefficiencies resulting from regular over-reactions to the Indian equities market. Mechanical trading is an automated method that uses pre-determined entry and exit techniques. Traders that have eliminated human decision making from entry and exit levels are usually more successful than other traders that do not uses these proven methods. It is well documented that professional traders have used mechanical trading, for well over 30 years, ever since the advent of cheap computing technology. 

The reason why mechanical trading works is because it is unemotional and forces the trader to apply the rules of good trading that we all know, but find hard to apply. The rules that you consistently read in investment books such as "run with profits, and quickly cut losses" are absolutely correct. The real skill is to consistently stay true to those rules. The average author of an investment book usually likes to quote that "90% of futures traders will lose their trading capital", but they always neglect to tell their readers that the 10% of individuals consistently making big returns are the people using mechanical trading strategies. It makes logical sense that if you test multiple trading ideas then you will eventually develop complete strategies that consistently work.

My trading strategy can be traded long or short in any market environment. Trading long is the process of buying to open and then selling to close a market position, similar to any normal share market transaction. Short-selling is the process of selling to open a market position in the expectation to buy-back later to close that market position to potentially profit from a fall in the market price. I use a gap entry method combined with a 13 & 34 WMA calculation to determine the initial entry signal. The gap is the difference between today's opening price relative to yesterday's closing price, which must be within a specific pre-determined price range on market open.

The stop-loss and profit-target methods are derived from a Standard Deviation calculation, which is a very common mathematical formula. The calculation is a statistic used as a measure of the dispersion or variation in a distribution, equal to the square root of the arithmetic mean of the squares of the deviations from the arithmetic mean. I have used the Standard Deviation calculation to determine stop-loss and profit-target levels, which I have tied into the lot-sizing calculation that balances the leverage, thus producing consistent compounding returns. These methods of money management are universal to all good short-term or long-term profitable trading applications.

The final component of this particular strategy is that I am only in the trade for a maximum of two trading sessions. This reduces market exposure, while taking adequate advantage of the short-term over-reaction to the Nifty index. I enter at "market-on-open" for my initial trade, and if the stop-loss or profit-target is not hit then I will exit at the end of the following session, usually with a profit. Exiting the following session allows for additional time to benefit from any strong favorable price movement.

I have tested my complete mechanical trading strategy over a three year period using computer code that I personally developed, and I have traded live funds to make sure the complete strategy produces my expected results. I now have a complete fully automated trading strategy that can produce consistent income, for both my retail clients and my own account. If you wish to generate a part-time or full-time trading income, then you should consider intra-day or short-term trading as a new entrepreneurial home-based opportunity.