Saturday, January 24, 2015

Weekly Review - 27.01.2015

Dear All,


>>> What Exactly is Quantitative Easing :- <<<

The European Central Bank has launched quantitative easing – which will pump huge amounts of cash into the eurozone economy to try to get it growing again.

That money, freshly printed by the ECB, will be used to buy financial instruments called bonds, which are sold by governments, and companies, to raise funds.

Investors buy them, lending that cash for a fixed period, at the end of which they get it back, plus interest, though that’s not guaranteed.

By buying bonds, and getting money into the real economy the ECB also hopes to head off deflation – which is when prices fall and the economy stagnates as people put off purchases waiting for things to get cheaper.

At the moment those bonds are sat in high street banks’ vaults, waiting to mature, the ECB will buy 60 billion euros worth a month from March with the idea that the money freed up will be lent out to households and businesses who need loans.

The ECB pitched its bond-buying programme on the high side at 60 billion a month, going for what some analysts called the “shock and awe” effect.

Mark Haefele, Global Chief Investment Officer with UBS, told euronews: “The size was bigger than people anticipated, but more importantly it is open-ended, so the ECB can do more if they think it is necessary. And the other thing is that there is risk-sharing involved, so in some ways it is a historic announcement.”

Risk sharing means the central banks of eurozone members are on the hook for eighty percent of the value of the bonds if their governments default and do not pay back the money promised when the bonds mature.

German officials, including Finance Minister Wolfgang Schaeuble are not happy, fearing some eurozone governments now will not make essential economic reforms as the pressure will have been taken off them.

The theory is that the effects of QE will mean ordinary Europeans and the region’s businesses will be able to get loans more easily as the banks have more cash to lend.

That is what happened with quantitative easing in the United States, but so far QE has failed to significantly boost the Japanese economy

Plans to pump out more money also pushed down the value of the euro against other currencies which helps the region’s exporters.

But it all depends on the high street banks lending on the money they get from the European Central Bank for those bonds.

If they don’t do that confidence is not restored and the ECB’s plans will have failed.

If the “big bazooka” doesn’t work then the whole single currency experiment is at risk, which will be a massive problem for the region’s leaders.


Obama's visit will not be a big event as far as stock markets, The major trigger for the market early next week will be the outcome of the election results in Greece. Greece election verdict can impact and upset the upward run in the Indian markets and a steep unsustainable fall can be witnessed provided anti Euro government comes in place in Greece.


Once Greece exits, it will create a ripple effect and unrest in other Euro countries like Portugal and Italy which are under severe pressure and unable to revive their economies.

The Indian markets will be shut on Monday on account of Republic Day celebrations. The volatility is likely to be limited to the gap-up or gap-down start on Tuesday.

>>> Nifty Daily Chart - As Posted Last Weekly Review <<<

>>> click the chart to see on full screen <<<

Wrote last week - a possible Target on the upper channel as shown above.

>>> Nifty Daily Chart - Happened and Yet to <<<

>>> click the chart to see on full screen <<<

Made 8866 High. ABC looks completed.

>>> Nifty 5 Mins Chart <<<

>>> click the chart to see on full screen <<<

Above is a 5 mins chart. Its a clear Extension wave, after 8365 and 8550 entire scenario changed. Bulls made a extension wave and trapped the bear and short sellers. No doubt that the continuous flow of many good news from RBI Rate cut to ECB's easing - where a real vitamin for Bull.

Price if breaks below the band, shown above shall be the first sign of weakness. Else we may see some more upside.


>>> Bank Nifty Daily Chart <<<

>>> click the chart to see on full screen <<<

20150 shall be the lakshman Rekha. Though friday high 20167 with a Red colour Hanging man on the top of the daily chart - may give some meaning to smile for the bear. But in past we have such failed candle sticks pattern. So its better to wait and watch.

>>> Bank Nifty Hourly Chart <<<

>>> click the chart to see on full screen <<<

Above hourly chart is really a disturbing one, even after 17512 or 4th wave marked, the upmove looks shaky. Really a Cat on the Wall. Must wait for a meaningful trigger.

>>> Charts of the Week <<<

Lets See some effective charts for next week. We may or may not have positions in the below mentioned chart. We may trigger Entry and Exit as per Index or Stock's price movement.

>>> Ashok Leyland <<<

>>> click the chart to see on full screen <<<

Again AshokLeyland inside our Ring. 64.5 looks as a key resistance. As shown on above chart, final leg has almost retraced 78.6% of previous 1-3 waves. Looks very interesting.

>>> CanBk <<<

>>> click the chart to see on full screen <<<

We have been discussing Canara Bank since last few days. Since then both index - Nifty and Bank Nifty made a remarkable upmove. CanBK also moved up, but still below our Resistance level. As shown on the above chart, Price may move up only if able to close above the key resistance line.

Last two days Price making a Red colored Hanging man. A Raising wedge like pattern also looks bearish, if breaks on the downside may trigger a sell off.

>>> Performance till 23rd Jan, 2015 <<<

>>> Click the image to see on full screen <<<

write to us on niftyforall@yahoo.com for details of our service.