Nifty for 18 May 07

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.

The first tick of the morning closed the gap which was created on Thursday 17 May, technically. However, I would not give much cognisance to the first tick, as it could be just a small trade registered. Two short term zones marked in grey are those showing the gaps. In the tussle between bulls and bears, normally the market respects such gaps. That is because the bulls do not want the bears to cover their short positions which have been created prior to the gaps. The short covering then adds impetus to the bull phase, allowing bulls to exit at higher levels.

The Nifty is just a whisker away from a historic high. Normally, we do not expect the weekend to be such a non-event day, with flat trading.

When volatility tightens, we could expect some explosive move either way. I could be wrong, but the probability of an up move still remains. Till then … Plan your trades and trade happy.

Nifty for 17 May 07

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.

Today’s move with a rising window would not have allowed traders to enter at the open. This type of market move normally frustrates traders and then they jump in at any price. They then end up holding stocks at high prices.

The Nifty future has made a historic high today. Whereas, the underlying Nifty index has yet to make a new high. This suggests that some element of excessive speculation is slowly entering the market. The future is now trading almost at par with the Index.

Under normal circumstances, this always rings a warning bell. We are fast approaching our time target of 22 May.

Plan your trades and trade happy.

Nifty for 16 May 07

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.

On 15 May, it was suggested “if the gap is not closed, then we may see a runaway gap, which could reinforce the bullish sentiment.” The market did open with a gap, but we did not really see a runaway gap. In any case, the bullish sentiment has reflected well in today’s sharp move up.

Today, the short term trend has changed as up. From the way the market is behaving, it is my expectation, that this up move may be short lived. In fact, as stated earlier, we have a cycle in time on 22 May, which could be a short term top. If the market behaves itself, then we may see the trend continue up till 22 May.

Plan the trade and trade happy.

Nifty for 15 May 07

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.

On Friday, 11 May, it was suggested to “wait for a break above 4095, and then buy on a dip, with an appropriate stop.” Again on Monday, 14 May, it was suggested “the gap of today may be tried to be closed. This down move may be utilised to buy.”

Today has been a non event day … almost. Except that yesterday’s gap has not been closed. Therefore, we could be alert tomorrow for such an event. However, if the gap is not closed, then we may see a runaway gap, which could reinforce the bullish sentiment.

The candles are still small. The short term trend has still not changed as up, but has not confirmed the down either. The likelihood of it changing to up is highly probable.

Plan the trade and trade happy.

Nifty for 14 May 07

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.

On Friday, 11 May, it was suggested to “wait for a break above 4095, and then buy on a dip, with an appropriate stop.”

The break above 4095 has happened, and we could use any correction to buy in.

Further, the low of 3981 seems to have taken support on a tested trend, which validates it, further. Therefore, we may label this bottom as a significant one. The gap up opening may not have allowed traders to buy in, but these are the hazards to real live trading.

In any case, the gap of today may be tried to be closed. This down move may be utilised to buy.

The candles are still small. This tells us that even after such a positive opening for the week, the market continues to be uncertain about the direction. The short term trend may change as up from today, provided the bottom of 3981 is not violated. The likelihood of that happening is highly probable.

Plan the trade and trade happy.

Nifty for 11 May 07

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.

As of Friday, 11 May, we can term the short term trend to be down. This is strictly from a technical point of view. However, if we separate the black and white from the grey, the freak tick on the Nifty at the opening registered the low, without actually having really traded through. This suggests computerised basket selling.

I already hear whispers of market manipulation and conspiracy. I would suggest readers to forget those conspiracy theories, as the market is not conspiring against each of you as individuals. It is just a matter of some fund manager or managers assuming that the market is going to trade lower.

There is a popular saying in the West, “sell in May and go away”. As we see the market getting more correlated with world markets, we also notice that we have had major corrections in May 2004, March 2005, May 2006 and now possibly May 2007. Now that the earnings season is over, it is pragmatic to expect some profit bookings.

From a trading point of view, where are we in the trend? The long term is up, the intermediate is up, and the short term is down.

In any case, the low of Monday 30 April (4028), which was suggested as a stop, would have been triggered. We see the Nifty taking support on another zone with the low at 3981. For the adventurous among us, who are tempted to buy, the low of 3981 may be used as a stop.

However, for the conservative among us, who wish to follow our bullish set up example (see link on the right), it would be advisable to wait for a break above 4095, and then buy on a dip, with an appropriate stop.

The candles are still small and the shadows are large. This tells us that even though the trading range for the day is large enough, the market continues to be uncertain about the direction.

And as I am fond of repeating … now is the actual time to Plan the trade and trade happy.