These are my personal musings. These are not in any way meant to be trading advise. To view the full chart, right click and open in a new window.At last the Nifty has broken its track record of making new highs everyday. As of the last two trading sessions, it seems to be a short term consolidation pattern.
I can only repeat what I mentioned yesterday. “The chart shows our next expected frontier. Will it or won’t it? No point speculating on this question. That will not earn us money.”
Today was a negative day on the Nifty, but not very significant. However, the only really negative thing which I observe is that the Nifty Futures are priced higher than the Nifty spot.
As we know, there should be a cost of carry for the Future, as the market is financing you to buy a virtual position. This should keep the Future priced higher. We have noticed that, usually, at market bottoms, the sentiment is depressed and the difference between the Cash and the Futures is high, with the Futures being lower priced. The reverse is true at market tops.
At present the difference is not much. However, this would lead to a perfect arbitrage situation, where the larger players could buy the Nifty Components and sell the Future to earn a risk free profit.
We also see a few cycles in time falling between 8 and 11 October. It seems that the attitude now should be of caution.
Plan your trade and trade happy. Suggested to keep the trailing stops intact, and enjoy the ride.
1 comment:
Sirji ur dow theory is mind boggling !! Do u have similar analysis for nifty (it will show how stupid i have been in last 3 yrs !)
can u post it pl ?? i will see it just in case i am tempted to short.....
reg
ketan
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