Observations on SSE Composite Index chart

 The SSE Composite has been trading in a small range from the last few months. A decisive break above 3450 is what is required for it to reach the next levels and eventually start a good run.

Monthly MACD is now in the positive territory! Usually, this means a bull run is imminent. Weekly MACD was giving a buy in positive territory but it is now hesitating.

Dow Jones futures crash

At 5 PM ET today, the Dow Jones futures is down nearly 500 points pointing to a huge US markets crash right at the opening. The markets are expected to stay nervous throughout the trading session today mirroring the world markets crash earlier today.

Relation between Cost of Living and GDP (Nominal and PPP)

Sometimes, it is possible to judge the cost of living by comparing the nominal vs PPP GDP of that country. If the GDP based on PPP basis is far higher than the nominal GDP, it generally means that the cost of living is lower in that country.

For example, India has a $8.6 trillion economy GDP on PPP basis but is only about $ 2.4 trillion Nominal GDP. So, India's cost of living is low. Similarly, Switzerland has a PPP GDP of $ 493 Billion and a much higher, $ 651 Nominal GDP. Thus, Switzerland is very expensive on cost of living basis. Since the USA is the base country, at any given moment of time, in theory, US GDP on nominal and PPP terms is always the same.

Medium term Nifty levels and outlook for traders

Nifty has been in quite a long correction after the Modi wave. It is currently at 7928 (Dec 28 2015 closing level). This is a very interesting phase for the Index because for the first time after many months, it is showing a double bottom.

Ideally, a close below 7400-7500 level would make the Nifty healthy and lead to a huge, fast wave up, but the formation of this double bottom needs to be seen very carefully.

Confirmation of this double bottom is quite some time away (8340-8350+). If it crosses, then we are in a huge wave up that could last for many months.

Action: ONLY FOR TRADERS WITH RISK APPETITE
One can take 30% positions now. Watch the upper level and add there. If Nifty crashes to 7500 or below, we will take another look. One can add there. Ideally, according to celebrity traders, it is always better to average in the direction of confirmation. But, since we are only taking 30% positions and expecting a bull move after this bottom, it is alright to add carefully at the lower levels.

Nifty levels for August 19 2015

Important Nifty Index levels for closing session on 19th August 2015

Upper levels - 8535
A break above this level will help the market run

Lower levels - 8490, 8420
Nifty will collapse below these levels

Editor

Important Nifty levels for the day July 09, 2015

Important Nifty levels for the first half of the day (intra-day)

8400

8342

Nifty options and futures

Nifty based derivatives are some of the most popular Securities products in India.

Nifty Options and Futures traded values rank among the highest traded products in the World. Of course, value-wise, Nifty derivates are yet to catch up with Dow Jones, S & P 500, or Nasdaq based futures and options. However, growth and volume-wise, India's ranking is very high.

Nifty Put and Call options are widely used by institutions and individuals to hedge or trade.

Components of the Nifty Index

The current composition of the Nifty Index by companies are as follows:

Company Name	Symbol
ACC Ltd.	ACC
Ambuja Cements Ltd.	AMBUJACEM
Asian Paints Ltd.	ASIANPAINT
Axis Bank Ltd.	AXISBANK
Bajaj Auto Ltd.	BAJAJ-AUTO
Bank of Baroda	BANKBARODA
Bharat Heavy Electricals Ltd.	BHEL
Bharat Petroleum Corporation Ltd.	BPCL
Bharti Airtel Ltd.	BHARTIARTL
Cairn India Ltd.	CAIRN
Cipla Ltd.	CIPLA
Coal India Ltd.	COALINDIA
Dr. Reddy's Laboratories Ltd.	DRREDDY
GAIL (India) Ltd.	GAIL
Grasim Industries Ltd.	GRASIM
HCL Technologies Ltd.	HCLTECH
HDFC Bank Ltd.	HDFCBANK
Hero MotoCorp Ltd.	HEROMOTOCO
Hindalco Industries Ltd.	HINDALCO
Hindustan Unilever Ltd.	HINDUNILVR
Housing Development Finance Corporation Ltd.	HDFC
I T C Ltd.	ITC
ICICI Bank Ltd.	ICICIBANK
IDFC Ltd.	IDFC
Idea Cellular Ltd.	IDEA
IndusInd Bank Ltd.	INDUSINDBK
Infosys Ltd.	INFY
Kotak Mahindra Bank Ltd.	KOTAKBANK
Larsen & Toubro Ltd.	LT
Lupin Ltd.	LUPIN
Mahindra & Mahindra Ltd.	M&M
Maruti Suzuki India Ltd.	MARUTI
NMDC Ltd.	NMDC
NTPC Ltd.	NTPC
Oil & Natural Gas Corporation Ltd.	ONGC
Power Grid Corporation of India Ltd.	POWERGRID
Punjab National Bank	PNB
Reliance Industries Ltd.	RELIANCE
State Bank of India	SBIN
Sun Pharmaceutical Industries Ltd.	SUNPHARMA
Tata Consultancy Services Ltd.	TCS
Tata Motors Ltd.	TATAMOTORS
Tata Power Co. Ltd.	TATAPOWER
Tata Steel Ltd.	TATASTEEL
Tech Mahindra Ltd.	TECHM
UltraTech Cement Ltd.	ULTRACEMCO
Vedanta Ltd.	VEDL
Wipro Ltd.	WIPRO
Yes Bank Ltd.	YESBANK
Zee Entertainment Enterprises Ltd.	ZEEL

Nifty levels for May 4 to 8, 2015

Nifty key levels

Supports:

8190
8118

Resistances:

8480
8505

Are we in a Long Term Bull Market?

Good question!

Although it is a brave stand to take, especially for a long term call, all indications show that we are indeed in a long term trend.

The view can be taken from various standpoints.

Waves
The bottom that we saw in Nifty and Sensex 2008 after the massive fall was actually the start of the 3rd wave on a long term basis. On a slightly lesser time frame, we are currently in the 3rd of 3rd wave, which started in 2011. On a shorter time frame, the Modi victory is another 3rd wave, but on a much more shorter time frame.

Business cycle research by several big MNC research and consultancy companies shows that India is set to grow at a staggering pace from 2015-2035, even beating China in these years. The scenario is slowly playing out. India is on course to be by far the 3rd largest nation on GDP on PPP basis.

Trading Size

What should be your ideal trading size?

There is no standard answer when you are trying to trade shares and stocks. It depends on how much experience you have trading the markets, your education level (trading related), the product you are trying to trade, and so on. In short, this cannot be generalized. But here are some guidelines that you can try to follow:

• Never trade the markets directly. It is a surefire recipe for disaster. Not only will you lose all your money, your ego may tell that you will improve, thus hastening the loss making cycle, which only gets worse as you lose confidence (reason: most beginners keep increasing size to make up for lost money).
• Try to spend at least 6 months under an expert's glare. Trade paper money and carefully analyze performance with your guide
• Start trading real money only when you are getting good results. Even this is not a guarantee. Oftentimes, paper trading results are manipulated!

Sensex MACD in Buy near Positive Territory again

The benchmark Index, moved into a buy again after a lengthy A-B-C type of a correction. The move up on 26th November 2012 is a very typical burst when an important index is in positive territory. The upmove should continue now for quite a while.

Index resuming normal uptrend. Sensex and Nifty well placed before Diwali

The benchmark indexes have indeed turned up just before Diwali. All it needs now is a good push and we are again on the way up. A buy signal here is a powerful one since MACD is in the positive territory and a possible move up will be very strong.

Nifty in corrective mode, to turn up once the MACD curve turns up

Nifty and Sensex are currently in corrective mode. The main reason is that MACD had turned down. Also, there were gaps around 18000-18300 area. The Indexes are currently trying to fill those gaps.

Markets will be dull for a while and will turn up first and then give a buy. This is likely to happen during Diwali.

Sensex, Nifty to confirm Bullishness

Sensex is currently moving up logically after testing the trendline support. It needs confirmation of 18524 to truly head upwards. After that, a lot is possible. Nifty is also similarly placed.

Nifty still strongly placed, MACD buy in positive, huge rally possible

Nifty is still in a strong position. A possibility of a great run is open since MACD is in a buy mode in the positive territory. The chart is weakening somewhat on 3 month charts, but it is quite normal on longer term chart, say 1 year and 3 years. One should stay long with a stop loss of 5130.

Index Futures and Factors for today's trading

DJIA INDEX		13,062.00	+7.00
S&P 500		1,391.30	+2.30
NASDAQ 100		2,682.75	+11.75

 At approximately 5:30 AM

• Mario Monty warns about Euro breakup
• Mixed opening expected for markets today
• European stocks gain on Greek debt news

RBI Policy

The Reserve Bank of India is widely expected to cut rates by 25 bps tomorrow. The markets have rallied a bit on this expectation. It remains to be seen if this happens in reality.

Nifty to resume uptrend after Stochastics goes into buy

Nifty is currently correcting and filling the gap that was formed a couple of weeks back. It will resume sharp uptrend after Stochastics gives a Buy signal. MACD is placed in the positive territory even now. A Buy signal will be a good boost at this point.

Chart courtesy: Yahoo Finance

Trading and Investing factors

 Factors for the day

• Dow, Nasdaq and S and P futures moderately up
• Rajoy spells out budget cut details amounting to 65 Billion Euros to fight crisis
• Peter Sauer, BofA executive and ex-Hoops star dies
• Europe markets down on Earnings worries, Asia markets swinging between losses and profits
• Profit warnings from US companies