Nifty for 14 Feb 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 says it all. This last downswing has been not as large as the previous down moves. Further, on a short term basis, we see a parallel channel moving down. This time the down swing has avoided the downward blue line.

There can be one simple reason for that. That today is a weekend, and normally short positions are unwound to avoid news based volatility over the weekend.

On the other hand, today we see some positive change in sentiment. Normally I would be very enthusiastic with a positive change in sentiment. But for the last few weeks, the market has flattered to deceive.

Today is actually a bottom fishing paradise. If there are some gutsy short term traders reading this, I may be inclined to encourage it. However, for the more conservative, I would suggest waiting for the ~4900 levels to be violated on the upside. For the cautious traders, it may be suggested that we allow the ~5020 levels to be violated and then buy on a dip.

In any case, we could trade with a stop loss at 4560.

Trade happy after planning your trade.

Nifty for 13 Mar 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.

Another level gone. Another one bites the dust.

I have been warning about the high expected volatility for almost two weeks. This type of volatility normally kills the small trader.

The BSE and NSE are not working in tandem now. On the NSE Nifty, I am getting an expected downside of ~4370 whereas according to the same measure the BSE Sensex was expected to achieve ~15400, which has already been breached.

All said and done, the chart shows a battle scarred minefield of upside and downside gaps, which suggest one thing loud and clear. There is no trend, and when there is no trend, it makes no sense to risk capital and play with fire.

It makes no sense saying that the market is deeply oversold. That does not prevent it from becoming more oversold. However, from all indications, the way Puts on the Nifty are so highly overpriced, something must give away.

I would still suggest long term traders to keep a watch for the ~4450 levels.

Also please keep in mind, that the whole of this month is expected to be violently volatile.

Trade happy after planning your trade.

Nifty for 12 Mar 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 market traded exactly as expected. However, the time frame of a few days, which I had anticipated for the bears to get back in action was wrong. The market seems to be so fast and compressed these days.

I suppose it is because of the plethora of information available on the media as well as the internet.

Anyway, from a technical point of view, we see a short term bullish pattern developing. The previous swing top of ~4935 has been violated. Short term traders could now take buy positions on dips, with a strict trailing stop at 4620. I expect the support to come around the 4770 levels.

If the previous swing bottom of 4620 is broken, then it would mean that the bears are stronger than the bulls, and that the bulls would better stay sidelined till the big boys start buying.

I would still suggest long term traders to keep a watch for the ~4450 levels.

Also please keep in mind, that the whole of this month is expected to be violently volatile.

Trade happy after planning your trade.

Nifty for 11 Mar 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.

From the pattern on the chart, the bounce of the last two days seems like an upward correction to the fall of the last fortnight, from ~5350 to ~4600.

It is exactly this type of pattern which allows bulls to trap bears to scurry to cover their shorts. Therefore, in all probability, we may see a gap up opening, which could trip the stops of bears around the 4950 regions, which was the previous short term top.

It would remain to be seen how the trading goes today. If the bulls are stronger than bears, we could see a sharp recovery. After a few days, we could see a renewed bear attack, as there are several resistance levels overhead.

The strongest resistance level is the black box ~5400. Thus, we may see some downside correction from there. In all probability, this correction would be the downside correction, which could be used by sidelined bulls to re-enter the market.

Trade happy after planning your trade.

Nifty for 10 Mar 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.

Today the market seems to have tested the previous bottom of 4450. It almost seems to have scraped the bottom.

From the microscopic short term perspective, we see something positive. It has made a higher top from its immediately previous swing top of 4797. However, please no not read too much into this. The pattern of the chart has still not shown a convincing bottom. For the market to return to its short term up trend, the top of 4815 must be broken on the upside, and the low of 4620 must not be violated.

On Friday, we had a longer lower shadow on the daily candle. Today’s longer lower shadow seems to have more significance than that of Friday. Both on the BSE as well as the NSE, the moves seem to have been positive. Further, both the exchanges show white bodied candles. Bulls would not be advised to break open the champagne bottles as yet. Allow the sentiment to ferment for a few days more and allow the negative sentiment to change to positive. Then only would it make sense to say firmly, that today was indeed a significant bottom.

Trade happy after planning your trade.