Nifty for 29 May 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 bottom fishers would have had a small bad day. The stop to be placed at 4835, which was suggested yesterday, would have allowed an exit with a tiny loss.

Whether today’s fall was due to expiration stop loss running, or it was due to a genuine tanking; only time can tell. From the pattern, it does suggest that the sharks wanted the Nifty to close lower, in order to take advantage of options which expire worthless.

The sentiment is still negative. Though, it does seem that it is changing mildly to positive.

Further, I present the long term charts of both the Indices.

The Nifty seems poised at a very interesting juncture on the long term chart. The Sensex, however, is showing weakness in its trend. As I have mentioned earlier, I would follow the Nifty, as its Future is the largest traded derivative on the Indian bourses.

According to this long term chart, it does seem that the Nifty may take support on its long term trendline, and then move back up.

This brings us back to the short term chart. And as has been repeated time and again, for those who have exhibited patience to buy, it is suggested to wait just a little longer. A short term bullish pattern has still not formed. The long term perspective is still showing bullishness, though the intermediate trend is exhibiting sideways to weak trend.

We may still have upward corrections for the drop of this month. These upward corrections will attract profit booking as well as bears. Therefore, it is suggested to be nimble footed at this stage. If you do not monitor the market on a daily basis, it is better to stay away.

It is an old saying that “any fool can buy at anytime, he must find a bigger fool to buy later for profit.” Profit in the market is all about timing when to buy. Stay tuned.

Trade happy after planning your trade.

Nifty for 28 May 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 was suggested yesterday, the Index did test the blue down-sloping trendline. As expected, we did have a solid bounce back up.

From the pattern of the chart, it does seem that this downside move has exhausted, and it may now resume its upward trend. However, the correction from ~5250 to ~4835 has been rather steep. That has allowed some negative sentiment to build up.

That will contribute to some anticipated resistance around the 5050~5100 levels. As of now, we can term this bounce as a correction to the previous fall. If the Indices make a good base here, and exhibit a short term bullish pattern to emerge, than only will we label this as a fresh move up.

For those who have exhibited patience to buy, it is suggested to wait just a little longer. A short term bullish pattern has still not formed. For bottom hunters, this could be an ideal opportunity to buy. However, prudence suggests that the stop may be placed at 4835.

Trade happy after planning your trade.

Nifty for 27 May 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 banking sector continues to lead the Index down. It has again contributed to the fall in a big way. Other sectors were mixed.

The scenario anticipated for today did not allow traders to enter comfortably. And in any case, the Index has moved below our stop loss level. Therefore, it makes no sense to be long at this stage.

The Index is again testing the blue down-sloping trendline. With such a large price move, it is expected to provide support. But as mentioned yesterday, the move up is likely to be met by selling, so I do not expect the negative sentiment to change in a hurry.

For those who are a little more conservative, it is suggested to wait patiently to buy. A short term bullish pattern has still not formed.

Trade happy after planning your trade.

Nifty for 26 May 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 was suggested on the weekend, we did see panic. As a result, we did see the indices opening with a downside gap, and continuing to stay down.

The banking sector contributed to the fall in a big way. Had it not been for the technology sector, the Indices would have taken a larger beating.

It is on panic days like this, that bottom fishing is very tempting.

I expect a minor downside tomorrow, and then, we could see a rebound. This rebound would entice traders to think that the short term bear phase is over. However, we can expect renewed selling at higher levels, not only for profit booking, but also by bears.

As of now, the Index has given up all semblances of bullishness. We could buy tomorrow after the 10:30 am, only if we have guts of steel, and place a strict stop loss at 4790. But it may be suggested to book profits quickly also.

For those who are a little more conservative, it is suggested to wait patiently to buy.

It is expected that the global cues are going to be mixed, due to the trading holiday in USA. That is also the reason why the market was traded thinly today.

Trade happy after planning your trade.