Weekly Nifty View: Bulls have to act fast or else time will start running out

If the S&P Nifty stays below 5,714, the bulls will be under pressure


S&P Nifty close: 5,686.25

Market Trend
Short Term: Up              Medium Term: Up               Long Term: Down
After a flat open the Nifty rallied in the first half of the week to hit a high of 5,777 points (on 7 November 2012) after which profit taking coupled with speculative selling saw the market give up its entire gains and close the week in the red. We had warned that 6 November 2012 (21st day from the top of 5,815—a Fibo number) could be the date after which profit taking would take place and the very next day the market obliged. However, we did better than the US markets which tanked after the presidential elections. Volumes were marginally higher as compared to the previous week as the Nifty closed 11 points (-0.20%) in the red. The histogram MACD, which is above the median level, moved still lower indicating that even though the bulls are in control they have to push prices higher and simply cannot let them remain choppy for too long.
The sectoral indices which outperformed were CNX Realty (+5.00%), CNX FMCG (+1.67%), CNX PSU Bank (+0.91%) and CNX Consumption (+0.58%) while the underperformers were CNX Energy (-2.14%), CNX Metal (-2.00%), CNX Commodities (-1.28%), CNX Infra (-1.32%) and CNX PSE (-1.08%).
Some key levels to watch out for this week 
 If the S&P Nifty stays below 5,714 points (pivot) the bulls will be under pressure.
 Support levels in the declines are pegged at 5,650 and 5,614 points. 
 Resistance levels on the upside are pegged at 5,750 and 5,813 points.
Some Observations
1. The Nifty has completed the 61.8% retracement level of the decline from 6,338-4,770 points pegged at 5,740.
2. The 78.6% retracement level of the fall from 6,338-4,770 points is pegged at 5,951 points, which also coincides with the top of the channel (in brown).
3. The Nifty is now moving within a sharp up sloping channel (in blue), support from which is pegged around 5,627 points and resistance is pegged around 6,005 points, this week.
4. We have remained above the previous weekly top of 5,629 points (24 February 2012) which is a sign of strength as long as the index stays above it.
5. The weekly chart above also shows a channel (in brown) which intersects the channel (in blue) the resistance lines of which are pegged around 5,996 points. This should be closely watched in the week ahead.
6. The volumes were higher as compared to the previous week which is sign of struggle for control around the 5,750 points level.
7. One has to closely watch the “gap area” between 5,649-5,682 points. If this gets completely closed the trouble for the bulls will increase.
The bulls failed to capitalize on the advantage they had and let go off all the gains, in fact closing in the red. We can see a long upper shadow in the candlestick of last week which implies that there is stiff resistance coming in at the 5,750-5,815 point area. Unless and until this is taken out the bulls cannot make further headway. One should keep a strict stop loss on longs below 5,629 points on a weekly close. The two-year cycle from the top of November 2010 which also falls in the fourth-fifth week of this month also indicates that a significant top could take place this month. From the above one can conclude that time is running out for the bulls who have to move fast to drive prices higher, otherwise they could be in for serious trouble especially if the Nifty breaks and closes below the channel in blue.
(Vidur Pendharkar works as a consultant technical analyst & chief strategist at


Paris: Discover the road less travelled in the City of Lights


Explore parts of Paris which the guided city sightseeing tours and the crowded...
Premium Content
Monthly Digital Access


Already A Subscriber?
Yearly Digital+Print Access


Moneylife Magazine Subscriber or MSSN member?

Yearly Subscriber Login

Enter the mail id that you want to use & click on Go. We will send you a link to your email for verficiation
Here is proof that Congress is lying about the 700 Indian accounts in HSBC

What Arvind Kejriwal has revealed so far about the 700 Indian accounts in HSBC Switzerland is the tip of the iceberg. The I-T department and therefore the Congress know much more. Here is the proof from a Moneylife Foundation seminar. We suspect Kejriwal knows that the I-T has all the details and is daring the government to sue him, which will nail the Congress’ lie

At a Moneylife Foundation seminar on 13 December 2011, one of India’s best-known tax experts, Anil Harish, explained at length the consequences of the hacked list of 700 Indian bank accounts at HSBC Geneva, handed over to the French government.


What is remarkable about Mr Harish’s talk is that a lot more about the aftermath of that I-T investigation was already in the public domain, than has been revealed by India Against Corruption (IAC) on 9th November.


What comes out clearly from Mr Harish’s talk is this:

1) That the list of 700 persons waved by Arvind Kejriwal and shared with the media is genuine. And, as Mr Harish says in his talk, the account holders who were called in for the investigation would confirm that the details were only accurate and people were advised not to lie and deny the facts. Instead, many found a legal way around the problem.


2) Mr Harish says the money stashed abroad was in individual accounts, in corporate accounts and in trusts. Some were accounts of resident Indians and others were of non-resident Indians (NRIs). The Tax department chose to raid those who were residents with Geneva accounts in HSBC. Mr Kejriwal says only three were raided and all the residents he named in his list were apparently not touched. Those who were NRIs were only called for questioning.


3) Consider the accuracy of the list and how much the I-T department already knows. Mr Harish quotes the example of one NRI client who had been warned to give truthful answers. The officer asked if the person had accounts overseas. He said yes, as an NRI you need overseas accounts for business. He told the tax officer he had accounts in the US, UK and Geneva. When asked how much money he had in the Geneva account he said $2.5 million, at which time the officer politely corrected him and said it was in fact $2.4million—because he already had all the information from the HSBC list.


4) It is hard to believe that smaller accounts in the list were 100% accurate and details of the big fish were wrong!


5) In fact, Mr Harish, in the interactive session, advised people not to lie, because the tax authorities had all the exact details.


6) Clearly, contrary to Abhishek Manu Singhvi’s claims on television, the Income Tax department has full and complete information. It can act; it does not need a complaint to be filed. And since when has the I-T department waited to act only on a complaint?

7) Clearly, contrary to Abhishek Manu Singhvi’s claims on television, the Income Tax department has already started an investigation based on the list and decided to go slow with it.


Based on this proof here are some obvious conclusions:

1. Mr Kejriwal, is a former joint commissioner of Income Tax whose wife is still in the government. He will be able to pin-point exactly which units and officers were in charge of this investigation. But then, it is not Mr Kejriwal’s job to do the work of government. It is the government that needs to account to the people of India, what action has been taken on the 700 names and which few people were targeted for recovery. In fact, the tax returns of some of the big names may also yield some clues. As Kejriwal and Prashant Bhushan correctly say, it is now for the government to explain to us and to the Parliament what action was taken in each of the 700 cases.


2. Arvind Kejriwal is correct when he says that only a few people were selectively raided. But Mr Harish’s talk explains how and why this was done. He says that those who were resident Indians were raided. Those were Non-Resident Indians (NRIs) were only called in for questioning and many of the accounts were in the names of corporates and trusts, which, as the video reveals, dealt with the issue differently.


3. Mr Harish’s illuminating talk clearly shows that all the 700 accounts need not have been dubious. He also indicates that many of them found clever and ingenious ways to set things right. Others had accounts reopened to pay up the tax and escape liability. The line of questioning adopted by the tax authorities was also explained in detail. He said the key was whether income had emanated form Indian transactions and operations or overseas businesses.


4. The final part of Mr Harish’s talk is also very interesting. He shows how tax evasion is not unknown in the developing world and the US. Mr Harish explains in detail the US amnesty scheme which allows people to avoid prosecution by paying up a stiff penalty on a one time basis. But then, the Indian system works for tax evaders and we have had so many amnesty schemes over the 65 years of independence, that the Congress government in its previous stint at power has assured the Supreme Court that there will be no more amnesty. This is a trap that corrupt policy makers had created for themselves, while making no attempt to check the proliferation of black money.


Clearly, there is a lot more that the I-T department knows which it is possibly trying to bury. There is a lot that Mr Kejriwal knows which he possibly trying to keep with himself as a matter of tactics. And the Congress is plainly lying when it acts ignorant about the details of these 700 accounts.

To read yesterday’s coverage about Arvind Kejriwal expose, click here.

You may also want to read: India's silence on US tax evasion cases says it all




nagesh kini

5 years ago

NRIs are legally permitted both by the FERA and FEMA to freely operate overseas bank accounts without any RBI/Regulatory approvals. Calling them even for questioning is only an eyewash. Those called are well within their rights sue for harassment, proves it is selective.

The Additional Solicitor General has rightly brought out all such malpractices in his yet to hit the stand book.


5 years ago

lesser said the better.


5 years ago

The mills of Indian Governance grind very slowly while the grist is some other mill


5 years ago

All efforts need to be made for getting hold of funds in Swiss bank accounts. However, why do we forget that major chunk of illegal funds is in India itself. Real Estate is a prime example. Black money is also routed into stock market operations thru foreign funds.


5 years ago



5 years ago


P M Ravindran

5 years ago

Please tell me only when any Congi tells any truth!



In Reply to P M Ravindran 5 years ago

You want all Congis to remain silent for ever?


5 years ago

Many Thanks For Clearly telling the Whole Issue,which clearly shows that GOI is Protecting Moneyed people in India.SECRECY Tag is MisUtilised by GOI in not Putting 700 People List in IT Web ,Nor telling Presss . MOre Trasperant System is to be adopted by GOI,restricting Secrecy in Defence and External Affairs Ministries only,but not Others.Then only INDIANs can believe GOI.

sohan modak

5 years ago

In one of my earlier comments, I had mentioned how HSBC was involved in
alloqeing transfer of Rupee funds after converting these into Euros and
transferring them to a paris bank in favour of the Alliance Francaise of
Paris, a French Government organization, looting crores of Rupees from
India without transfer permits from RBI and in clear violation of FEMA. We
filed a FIR in Pune but it was managed to have the Police report as non
lieu. We have now lodged a private complaint in the court. HSBC, in India
is, thus also working to promote Hawala transaction in favour of Foreign


5 years ago



5 years ago

This is a terrific piece and a clear indication of what a corrupt government and ineffective and co operative opposition has brought our country to. I do hope that the pressure being created by Kejriwal and company , will be supported by the rest of us and we bring in a change to the system.

Ashok Sood

5 years ago

It is unlikely that the opposition is not aware because if Kejriwal can access infmn oppsn can do so more easily. So far the govt has been sidelining issues and successfully burying them but, with exposes and awareness this will become more difficult. However, there is a silver lining in their concealment, the parties are compelling the aam admi to discontinue supporting them. Parties are fast loosing whatever credibility they had

We are listening!

Solve the equation and enter in the Captcha field.

To continue

Sign Up or Sign In


To continue

Sign Up or Sign In



The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)