Nifty for 25 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 was suggested yesterday 24 May, that the correction does not seem over, the market opened with a downside gap. It was also suggested that “according to calculations, the market could see short term supports at 4170, 4095 and 3980. Allow the market to confirm these short term bottoms, before we change our mind about buying in.”

The market did take support at 4141, between the two calculated levels, and then there was no looking back. Today’s upward move has all the signs of short covering by panicked bears.

Another reason could be the weekend factor, where the bulls have masterfully trapped bears. Very frankly, I am very apprehensive of such a market move. In such an event, normally, we can expect a bear attack soon. Therefore, for any buy action we take, we must keep the low of today at 4141 as a stop, to avoid calamitous losses.

Sometime, we cannot plan for such a situation, where the market tanks at the open, giving the impression of weakness, and carries up all through the day.

After today’s move, the sentiment is fragile, but back in the positive direction.

Plan your trades and trade happy.

Nifty for 24 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 market did pause for a short term at a support zone. It was not strong enough to give enough impetus for buying. Hence, it was quite natural to expect the market to continue further down.

According to calculations, the market could see short term supports at 4170, 4095 and 3980. Allow the market to confirm these short term bottoms, before we change our mind about buying in.

Further, we have not seen enough time elapse for the negative sentiment to build up. And we all know, we should be buying only when the negative sentiment is at its peak. The sudden crash in the last hour or so, must have triggered a lot of stops of bulls.

Plan your trades and trade happy.

Nifty for 23 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.

It is quite possible that the cycle in time of 22 May 2007 is contributing to the weakness today.

Most prudent traders would have had their stops triggered and locked in profit. There comes a time when we could step aside and allow the market to decide on its course. This could possibly be such a time.

It was expected that a short term top could have been registered yesterday. I may be wrong in my projection. It could have been today. In any case, we are stepping into the last week of derivatives expiry. Always it is a time to be prudent rather than rash.

Plan your trades and trade happy.

Nifty for 22 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.

We have finally arrived at our D-Day of the cycle in time of 22 May 2007. From today’s trading it seems to have turned out like a non-event.

Quite a few friends have either written to me or asked me on chat what they should do. Exit all longs? Go Short? Buy on Dips? To all such queries, I have a very simple answer. Please get out of the habit of trying to pick tops and bottoms. Treat trading like any other business, rather than like a casino.

A cycle in time is just that … a cycle in time. Allow the market to tell us what the price is doing. Tomorrow, either of three things can happen.

The market can continue up.

In that case, it is suggested to just keep tightening stops on the bought position.

The market can move sideways.

In that case, the stops are always there to allow the traders a profitable exit.

The market can move down.

In that case, the stops are always there to allow a profitable exit.

The common thing among all the three scenarios is the stop. And that is what will keep our profit intact.

The Nifty is making historic highs, and bulls are worried? I find that very strange.

From today’s move, it does not seem that the bull run is over, not as yet. We may have a short term top today. But then, I repeat, allow the market to tell us that, rather than jump the gun.

Even though the price is banging away at the historic supply line, why are we worried, when the supply line is rising? A rising line means added profit. It is that simple.

Plan your trades and trade happy.