2008 Republic Day Greetings

Nifty for 24 Jan 08

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.

For prudent traders, we just need to look at the chart. The true deciders of the long term trend would be the levels marked on the chart. The top of 5350 and the bottom of 4450.

Traders with deep memories would be equating this crash to the 17 May 2004 crash. The bounce was equally sharp. The market meandered around for almost a month, and then resumed its upward journey.

However, it is not necessary that the same pattern would be repeated again, but the probability is high. A 900 point difference between the trend deciding levels are enough to unnerve even the best of traders. It is human psychology to buy when the prices suddenly start looking cheap. It is just two weeks and we have seen a 1900 points fall.

As of now, the indices have made a short term bullish pattern. It does make sense to buy at this point. But short term traders could work with tight stops. A drop below 4495 should send out warning signals for short term traders.

Slightly longer term traders could keenly watch 4890, and long term traders could monitor the last frontier 4448. I know that the ranges are large, but then it is not everyday, that the indices make a ~10% drop or a ~5% recovery.

Trade happy after planning your trade.

Nifty for 23 Jan 08

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 can be seen, the Nifty has sliced through several historic supports. The markets are reacting totally on news based items, emanating from the USA. Which is totally logical.

Braver traders would be bottom fishing. For the time being, it does seem that the negative sentiment has been leeched out to some extent. From the chart, it does seem that the Nifty has made a short term bullish formation.

It is my feeling that the Nifty is retracing part of its losses. In other words, this up move of the last few days is just an upwards correction to the fall. However, I may be wrong.

When the short term trend runs contrary to the main trend, volatility is only natural. To avoid getting burns in the pocket, it is suggested to take buy positions, but hedging would be a prudent course of action.

As of now, we may use the last bottom as a benchmark. 4440 on the Nifty would be a decider.

Trade happy after planning your trade.

Nifty for 21 Jan 08

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 chart needs no commentary. The worldwide sweeping negative sentiment cannot be insulated from the Indian Markets.

If we expect the Nifty to take support at previous support levels, think again. We cannot expect to stop a running train with a feather. It was suggested yesterday that we could short on rises. However, the market did not give adequate opportunity to do even that.

The short term trend is firmly down. The intermediate trend has also moved down. The long term trend also is in danger of turning down. Therefore, take care.

I can only repeat this statement.

Let the negative sentiment be weaned out of the system and then think of buying again. Please wait for a short term bullish formation and then take a risk for buying. As we know very well, bottom fishing burns.

Trade happy after planning your trade.