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.