Indian Stock Market Musings

Nifty for 23 Jul 08

2008-07-23T09:01:00.002+05:30

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.

Take a close look at the chart. First of all, point 1 and 2 are at a lesser steeper angle when compared to the earlier trend. Next, take a look at point 4, which is supporting a rising trendline. Point 3 has violated the down sloping trend line. Point 5 is higher than point 4.

This can mean one of two things. Either the market is preparing to be bullish. Or this is a relief rally for the fall of the last six and a half months. If the market corrects downwards from here, and takes support around the 3950~4050 levels, then we are preparing to have a new bull move.

If however, the market does not pause here, then it would mean that this is just a relief rally, and bulls may get trapped at higher levels.

Let us analyse the other aspects one by one.

This chart is used to measure time cycles based on the moon phases. It has been noticed that a count of 12 usually brings about a change in trend, as can be seen from the chart. Can this time also bring about a change? The probability is high.

Now, a measure of price. The Price has been bouncing about various Fibonacci levels, and possibly this could be the end of this bear move. The 100% level of around 14570 on the BSE of the previous bottoms is a crucial test. This could be easily surpassed, given the mood of the moment.

In any case, the bottom recorded in mid July is a very important level, and long trades could be initiated using that as a stop. Please keep in mind, that there would be concerted selling at higher levels, suggesting bulls may be trapped, therefore, extreme caution is suggested at higher levels.

Trade happy after planning your trade.

I am attaching the various charts of the tradable indices which should allow a trader to judge what levels to decide for (him)herself depending on their comfort levels.

The Bank Nifty seems to be ready to assume the mantle of leadership for the Index once again. This large move up can be discounted as a relief rally to the bear phase. For such an extended move, it is prudent to expect a correction.

The chart shows the Future pushing through the recent resistances. It also can be seen that they have been offering support too.

The increase in volumes also suggests conviction in this up move.

Therefore, dips may be utilised to buy, retaining the stop at ~4700 levels.

The Nifty Future also is pushing through the resistances, while receiving support after pushing through.

The same strategy could be used. Buying on dips may be profitable.

And finally, the Nifty itself.

After a long time, we see a convincing more back into positive territory. The volumes are slightly higher than average. We see quite a few positive volume bars in this last week up move.

This encourages us to take long positions on dips.

Further, the chart also shows us that the last bottom is not accompanied by stronger negative sentiment. Another plus point for the bullish case.

Nifty for 26 Jun 08

2008-06-26T18:45:00.000+05:30

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.

I am posting the charts for yesterday and today.

In my last post, it was suggested that we may see a short term downside target of 4185. The Nifty did achieve a brief bottom at 4093.

As of now, given that we have a derivative expiration, the event based short covering has provided a relief rally to the upside.

Yesterday’s chart shows the touch points of the short term and the obstacles which the Nifty bull would need to face in the recovery of the Index.

Looking one day into the future, we will also notice, that if the Nifty closes above 4325, then a bullish hammer will form on the weekly chart. This is a very powerful reversal signal.

Thus we may see some substantial recovery. However, as a guideline, we may use the first chart to anticipate the points of resistance.

There has been an increase in volumes but the volumes are not entirely bullish. Therefore, even though the Index is rising, the sentiment is still not totally bullish. I expect some short term resistance between 4370 and 4390. The Index may fall slightly. But to keep the fragile bullish sentiment intact, the Index must stay above the last bottom of 4093.

Trade happy after planning your trade.

Nifty for 20 Jun 08

2008-06-21T17:50:00.000+05:30

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 has been quite some time since I posted last. I have had some engagements which prevented me to do an in-depth analysis. It is very apparent from the chart that the trends on all time frames are down. The market does not have enough strength to be able to pierce the previous swing top.

The first question which comes to my mind is … where would it stop? First we take the short term perspective. Taking the Fibonacci calculations into account, we have a probable downside target of 4185. This is based on the last downside leg starting from the swing high of ~5299. Will this be the last of the downside? We cannot be sure of that at the present point in time. Only time will tell whether 4185 would be the bottom or not.

Further, within the months of June and July, we are having cycles in time falling on 21 June, 2 July, 6 July and 21 July. That suggests that this may be a volatile trading period. As the market is deep in oversold zone, I expect a lot of upside retracements, which would attract the attention of profit booking as well as new bears.

The last leg on this journey may attract a lot of shorting, which would trap the bears. Then only would we find the market in a position to resume its long term journey upward. So far we do not see any evidence of fear in bears, and shorting is resulting in sizable profits.

Where does the reader, the ordinary stock market investor enter? It is simple, wait for a base to be made. Let the negative sentiment be weaned out and then make your move.

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

The last time I posted this simple chart, the Nifty was poised at a very interesting juncture. As of now, the Nifty too has given up any semblance of being able to stand against the bear onslaught.

This weekend, I also present another chart, which I normally use to judge the market condition. This is a simple trend following chart, which I rely on to get the feel of the market.

The trick to successful trading is to determine the trend, and once the trend is in place, to take trades in the direction of the trend. This is the time tested safe strategy to the market.

Unfortunately, 99% of the small traders do not follow this principle. Rather, they try to hunt for the bottoms and sell at the tops. That is where they fail. And who makes money? The sharks.

This brings us back to the short term chart. Has the short term down trend terminated. Not yet. The short term bullish pattern which we normally look for has still not formed.

I find that my observations of the end of last month need not be changed.

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.

Nifty for 29 May 08

2008-05-30T08:47:00.000+05:30

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

2008-05-28T18:56:00.000+05:30

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

2008-05-27T17:45:00.000+05:30

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

2008-05-26T18:41:00.000+05:30

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.

Nifty for 23 May 08

2008-05-24T15:11:00.000+05:30

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. The steady uptrend of the last two odd months has finally been broken. This break is unhealthy for the longer term trend of the Index.

The sentiment has indeed turned sharply negative in the last two trading sessions alone. What was looking like a correction now seems to be a fresh downward move. This may allow the Nifty to move to the lower end of the short term down-sloping channel ~4850. If that is true, then our earlier check points of ~4934 and ~4923 would be violated.

It is now advisable to give up bullish hopes for some time. Wait patiently until we see a definite bull pattern, and then only take long positions. For those who are already long, it is suggested to place stops as each trader’s comfort level allows.

Last week, it was suggested that we have a cycle in time falling on 25 May 08. Let us see what this cycle brings.

We may even see panic.

Trade happy after planning your trade.

Nifty for 21 May 08

2008-05-22T09:17:00.001+05:30

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.

Is the correction over? From today’s sharp retracement up, it would seem so. In any case, we had expected the correction to be mild. However, the market will soon tell us. If it violates 5050 on the downside, we may assume that the correction is still continuing. If it violates 5168 on the upside, then it is over.

Today, the low has just kissed our monitoring level of 5066 as was mentioned yesterday, and retraced dramatically. This is a point in favour of the bulls.

As on today, the probability of a mild downside move seems more. It is quite possible that the Nifty may test the ~5050 levels once again. The market has presented both the bullish and bearish scenarios.

The market sentiment is still bullish. This allows us to suggest that dips may be used to buy.

The only chink in the Nifty’s armour seems the banking sector. If we have any positive stock or sector specific news relating to the banking sector, we could see the Nifty fly.

Trade happy after planning your trade.

Nifty for 20 May 08

2008-05-20T18:08:00.000+05:30

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.

After a few strong bull days, it is quite natural to expect a correction due to profit booking.

As of now the sentiment remains mildly positive. This correction is expected to be mild. As of now, the technical position suggests that it may correct to the orange zone. However, the previous swing low of 4935 should be significant. Therefore, it may be expected that the Nifty could stop anywhere above that level.

However, if the Nifty remains above the previous swing top of 5066, then it will signal to us stronger days ahead for the Index.

Trade happy after planning your trade.

Mahavir Jayanti

2008-05-19T14:59:00.000+05:30

Wish all readers a pious and peaceful Mahavir Jayanti.

Nifty for 16 May 08

2008-05-16T17:06:00.000+05:30

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 was suggested to maintain uneasy longs while adhering to strict stops. Readers who would have followed that suggestion would now be extremely comfortable and sitting on a small nest of profits.

Even though the sentiment is mildly positive, nevertheless, it is not one of reckless abandon. Therefore, depending on the trading time frame of individual readers, it is suggested to keep raising trailing stops to lock in profits.

We may have a couple of up days next week, and then we could see a correction. As of now, this anticipated dip may be utilised to buy.

Trade happy after planning your trade.

Nifty for 14 May 08

2008-05-14T17:37:00.000+05:30

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 short term bullish pattern is still holding. As mentioned yesterday, for this pattern to be validated, the market should move above 5066 and not violate the low of 4913.

The sentiment is creeping up, but not too convincingly.

Readers who have guts of steel could hazard buying at this stage. For those who venture to buy, we could place the stop at a close below 4940. Also a trailing stop to exit may be maintained at 4912. These stops may be adhered to ruthlessly.

It is only the IT sector which is really propping the Index up, due to the sops for the sector and also the rising dollar against the Rupee.

Trade happy after planning your trade.

Nifty for 13 May 08

2008-05-14T08:21:00.002+05:30

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 moved exactly the reverse of what was anticipated for today. It opened with an upside gap, and then steadily lost ground through the day. The net result however, is almost the same. There seems to be a short term bullish pattern emerging. For this pattern to be validated, the market should move above 5066 and not violate the low of 4913.

In such a case, a short term bullish scenario may be utilised to buy. This is purely from the technical point of view. However, from a personal view, I am not too convinced about the anticipated formation of the bullish pattern. We may see further profit booking at higher levels. As a result, we may see further weakness in the stocks, even though the Index may show bullish signs.

Therefore, I may suggest extreme caution at this stage.

We have revised the orange band slightly to accommodate the new data from the market. During times of uncertainty, it is always advisable to stay away rather than burn holes in the pocket.

Trade happy after planning your trade.

Nifty for 09 May 08

2008-05-10T09:56:00.000+05:30

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 mentioned yesterday, “the orange band around the 4970~5000 should now come into play”. It has hit our target bang on. Whether the Index will hold this level or not remains to be seen. Normally, after such a sharp dip, we do see some pull back.

Therefore, we could expect Monday to test the rising blue line, and then make a move up. How strong would it be is anybody’s guess. But short term trader may take advantage of this expected up move. It also goes with without saying to keep stops intact.

This suggestion is akin to bottom fishing, and readers must be tired of hearing me … warning of the hazards of catching a falling knife with open hands.

The chart still shows a steady uptrend, as is apparent by the upwards sloping blue channel. This last down move has been rather sharp, and later we could see selling at higher levels. If we witness strong buying at higher levels, enough to counter profit booking, we could see even higher tops on the Index.

The scenario which I expect on Monday is that the Index could open with a downside gap, and then strong hands may step in to start buying, which could push the Index upwards.

Even now, the suggestion to buy on dips still remains valid. Traders with a longer term horizon could wait for a formation of the short term bullish pattern to enter long positions.

Trade happy after planning your trade.

Nifty for 08 May 08

2008-05-08T18:10:00.000+05:30

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 market still is uncertain. Readers could have closed their long positions.

As of now, the market still does not seem bearish, but there is no harm to keep locking in profits and try a re-entry at a later date when the technical position is healthier.

Even now, the suggestion to buy on dips still remains valid. I would still suggest waiting for a formation of the short term bullish pattern to enter long positions.

The orange band around the 4970~5000 should now come into play.

Trade happy after planning your trade.

Nifty for 07 May 08

2008-05-08T07:43:00.000+05:30

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.

Traders could now raise their stops to 5101 which is the low for today. Long positions may be closed if the market remains uncertain.

As of now, the market does not seem bearish, but there is no harm to keep locking in profits.

As of now, the suggestion to buy on dips still remains valid. However, I would now wait for a formation of the short term bullish pattern to enter long positions. The market sentiment suddenly seems to have weakened.

We could keep monitoring the market, and take a position only when the market suggests it. I always keep cautioning readers against bottom fishing.

Trade happy after planning your trade.

Nifty for 06 May 08

2008-05-06T19:13:00.000+05:30

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, we seem to be in a correction. Had it not been for the IT and FMCG sectors, the fall could have been worse. This sector rotation keeps the sentiment bullish from a longer term perspective. We may see an up day tomorrow and the day after, but the profit booking could drag the correction down later.

The healthier aspect of this correction is that when there is profit booking in one sector, others prop the Index. So the general mood remains buoyant.

We have had a good 28 calendar days up move for this last leg from 4 April. It means that the sentiment has been generally bullish for about one month. It is unrealistic to assume that the bullish sentiment for a month can be corrected in a day or two.

The new orange box is the level now to watch for. That is why we suggest that stops may be retained at a close below 4971.

The suggestion to buy on dips still remains valid.

Trade happy after planning your trade.

Nifty for 05 May 08

2008-05-06T08:07:00.001+05:30

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.

Not much to change the mood. As was suggested last week, the market is still looking toppish for the short term, but is still not weak. The bulls would take heart from the fact that there still seems to be steam left in the market.

Stops may be retained at a close below 4971.

The suggestion to buy on dips still remains valid.

Trade happy after planning your trade.

Nifty for 02 May 08

2008-05-04T13:00:00.000+05:30

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 did have a gap up open, as can be expected after a holiday, when the market tends to play catch up with the trend. The market does seem to be topping out for the short term. There are evident signs of profit booking. The profit booking is not as intense to turn the mood bearish. It is just plain profit booking.

As mentioned a few days back, if the Index does not violate 4971 on the downside, we could see a sizeable and extended bull run.

There seems no cause for bulls to panic. Only there seems to be sector rotation, and at times like this, we need to be a little choosy in picking stocks. Stops may be raised to a close below 4971.

The suggestion to buy on dips still remains valid.

Trade happy after planning your trade.

Nifty for 25 Apr 08

2008-04-26T09:58:00.000+05:30

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.

With the derivatives out of the way, the market came back on its track. The market does seem to be topping out for the short term. There are evident signs of profit booking. The profit booking is not as intense to turn the mood bearish. It is just plain profit booking.

As mentioned a few days back, if the Index does not violate 4971 on the downside, we could see a sizeable and extended bull run.

This expected correction may touch around the 4860 levels and that could be a good re-entry point. In such a case, stops may be retained at 4628.

At the beginning of this month, it was mentioned that the whole month of April could be a period of consolidation with relatively lesser volatility and steady trending. The market has indeed behaved true to book. In such a case, we see a cycle in time falling on 1 May 08. Since that date is a holiday, we could see the final signs of profit booking next week.

How deep down would it take the market? That remains to be seen. In any case, the suggestion to buy on dips still remains valid.

Trade happy after planning your trade.

Nifty for 24 Apr 08

2008-04-25T08:41:00.000+05:30

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.

I am really satisfied that readers of my musings could have protected themselves from the vagaries of the market.

As expected, the market was mildly weak, and volatile.

If the market is behaving as expected, then we could anticipate it to behave as we analyse it, in the future too.

I expect it to take real support around the 4860 levels around the end of this month, and then take its journey upwards. It could also be possible that it could take support at a higher level. In such a case, I would suggest alertness to be able to join the party when it just starts.

And as always suggested, keep our stops strict and intact.

Trade happy after planning your trade.

Nifty for 23 Apr 08

2008-04-24T08:04:00.000+05:30

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 suggested yesterday, the Nifty seems to be topping out for the short term. The levels of the previous short term tops would not now into play, and could provide support.

From the longer term perspective, if the Nifty does not violate the previous swing high of 4971, then we could see much greater glory for the Nifty. If it does violate 4971, then it is expected that the rise may not be as rapid.

Now, a point which I want to forcefully make. These are my judgements based on the previous chart history. I could be wrong, and the market could turn bearish. In such a case, only trailing stops can protect our trades. Therefore, it is strongly suggested to keep trailing stops as each trader’s comfort level would dictate. So far there is no hint that the market could be bearish.

Tomorrow is the end of the derivatives cycle, which could contribute to some intraday volatility. Day traders could well stay away.

Trade happy after planning your trade.

Nifty for 22 Apr 08

2008-04-22T19:32:00.000+05:30

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 has been a long time since I last wrote, but it really does not matter, as the market has been bullish as expected and the hedged positions could have been removed.

Carrying on from the last post, people may ask me … am I a wholesale bull. I would answer that with an unqualified yes.

From the way the last fortnight has shaped out it does seem that my suggestions of last fortnight are standing good. If things happen according to plan, then we may see a pause for this leg at around ~5440 levels. This coincides with the big black box which is looming overhead. Will the Nifty have enough strength to break through? That remains to be seen.

For the short term, the Nifty seems to be topping out presently, and we may have a few mild downside corrections. But the overall trend is expected to remain bullish.

As a bonus for the long absence, I give the suggested levels which traders could monitor either for profit booking or for supports.
5131~5182
5281
5441

Trade happy after planning your trade.

Nifty for 11 Apr 08

2008-04-12T16:17:00.002+05:30

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 down sloping trendline has been retested. The normal weekend profit booking did pull the index down a bit. On the whole the bulls should be satisfied as we have seen a normal bullish day.

The Index is still struggling to break out from the congestion zone, even though the sentiment is turning mildly bullish after this fortnight.

The suggested stops for yesterday have still held, and the short term trend still seems bullish.

I can only repeat myself on what I have been saying all week. I would still retain my declared stance for the market. I would wait to see the short term tops of ~4800, ~4900 and ~4980 to be unequivocally violated, and then declare myself as a wholesale bull. Till then I would remain a cautious hedged bull.

Short term traders may retain their stops at ~4627. Long term traders may also retain their stops at 4627.

Next week is going to be a very short trading week. We may see some heightened volatility. But the trend is still expected to remain bullish.

Trade happy after planning your trade.

Nifty for 10 Apr 08

2008-04-10T19:45:00.001+05:30

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 volatile intraday trading day. The high for today has hit the down sloping trendline bang on as can be seen from the chart. The previous bottom is still holding and we can see the extreme short term trendline inching up.

The suggested stops for yesterday have still held, and the short term trend still seems bullish.

From today’s price movement, it does seem that the market is pausing at the right places and behaving in a technically correct way. The efforts to turn to positive sentiment still seem on. If or when, the short term down sloping trendline is also violated to the upside, it would be a point in favour of the bulls.

It is expected that the whole of April will be a period of consolidation with more traders coming back to the market after some bullish confidence is restored.

I would still retain my declared stance for the market. I would wait to see the short term tops of ~4800, ~4900 and ~4980 to be unequivocally violated, and then declare myself as a wholesale bull. Till then I would remain a cautious hedged bull.

Short term traders may retain their stops at ~4627. Long term traders may also retain their stops at 4627.

Trade happy after planning your trade.

Nifty for 09 Apr 08

2008-04-09T19:25:00.002+05:30

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.

Quite a volatile day on the intraday chart. The previous bottom is still holding and we can see the extreme short term trendline inching up.

The suggested stops for yesterday have still held.

Though the market has not done something spectacular, it is heartening to see that it is indeed making efforts to turn to positive sentiment. If the short term down sloping trendline is also violated to the upside, it would be a point in favour of the bulls.

It is expected that the whole of April will be a period of consolidation with more traders coming back to the market after some bullish confidence is restored.

I would still retain my declared stance for the market. I would wait to see the short term tops of ~4800, ~4900 and ~4980 to be unequivocally violated, and then declare myself as a wholesale bull. Till then I would remain a cautious hedged bull.

Short term traders may retain their stops at ~4627. Long term traders may also retain their stops at 4627.

Trade happy after planning your trade.

Nifty for 08 Apr 08

2008-04-08T18:44:00.003+05:30

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.

Even with a mildly bearish day the market does seem to have made a significant short term bottom on Monday.

In technical terms, today was a nothing day. The suggested stops for yesterday have still held.

Looking at the negative aspects first, if the stops suggested for yesterday are violated, then we may see extended bearishness. The previous swing bottom of 4468 may be tested.

Now looking at the positive aspects. The previous swing tops still to be violated. I would wait to see the short term tops of ~4800, ~4900 and ~4980 to be unequivocally violated, and then declare myself as a wholesale bull. Till then I would remain a cautious hedged bull.

Short term traders may keep their stops at ~4627. Long term traders may also retain their stops at 4627.

Trade happy after planning your trade.

Nifty for 07 Apr 08

2008-04-08T07:42:00.003+05:30

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 was suggested on Friday that … “the Index must make a short term bottom around Monday or Tuesday and should not violate 4468. If it does, then we may assume another extended period of bearishness”.

After today’s price move it does seem that the market does not seem to want to give up its gains of the last two weeks.

From the market action today, it does seem that this is a significant short term bottom.

Short term traders may keep their stops at ~4627. Long term traders may also raise their stops to 4627.

Trade happy after planning your trade.

Nifty for 04 Apr 08

2008-04-06T13:09:00.002+05:30

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 had another week of constant bad news from the USA. As a result of which the market is mainly bearish. The trend for the short term still seems to be up, but is now in the danger of breaking down.

The Index must make a short term bottom around Monday or Tuesday and should not violate 4468. If it does, then we may assume another extended period of bearishness.

From the face of it, the market does not seem to want to give up its gains of the last two weeks.

That is because the previous swing bottom of 4628 is intact. From the short term perspective, if 4628 is violated, then we could watch 4468.

Long term traders may continue their stops at 4460.

Trade happy after planning your trade.

Nifty for 02 Apr 08

2008-04-03T00:10:00.001+05:30

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 was open to wide manipulation, due to the thin volumes happening. It was expected, after the rush of huge intraday volatility in the last month, that things would calm down relatively. It seems that the market is out to prove me wrong on this count too.

Anyway, from the cursory glance of the chart of last week, we see that every major rise is being met with selling. At present the bears seem to have the stronger hand. But please keep in mind that it is very simple to manipulate the market with low volumes.

The downside violation of the horizontal red line around the 4720 level is weighing in favour of the bears. The rising red line is weighing in favour of the bulls. Where does it leave the small trader? In the zone of uncertainty. The previous swing top of 4971 has still not been violated on the upside. So also, the previous swing bottom of 4628 is intact.

From such a long discourse, what is the capsule? Stay out when uncertain.

For those readers who still have open positions, I can suggest only one thing … Just adhere to the stops.

Long term traders may continue their stops at 4460. Short term traders may watch 4538.

Trade happy after planning your trade.

Nifty for 31 Mar 08

2008-03-31T18:07:00.002+05:30

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 as if the market has overheard my comments of Friday…. “There is no certainty in the market, or else I would have said slowly but surely”.

With a slew of negative news emanating from the USA, we see the sentiment getting fractured badly. And it seems that there is going to be even worse news tomorrow.

Which allows bulls among us to be prepared for more pain tomorrow? Quite possibly. In fact, from the movement of last week, it did seem that the market was finally shrugging off the USA news flows, but it seems I was wrong.

Which leads us to the importance of the stops. It is suggested to take nothing for granted. Just adhere to the stops.

Long term traders may continue their stops at 4460. Short term traders may also watch 4538.

Trade happy after planning your trade.

Nifty for 28 Mar 08

2008-03-29T08:58:00.001+05:30

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 for the whole of this week, the Nifty indeed seems to be on a sound footing now. The trend seems to be heading up now, slowly. There is no certainty in the market, or else I would have said slowly but surely.

The only apprehension I have at this stage is that volumes are not too heavy. I would have felt much more comfortable had we seen rising volumes but I assume that it is because of the P Notes issue.

These are just a few fundamental thoughts. Capital inflows do not seem as buoyant as earlier, and no fresh inflows. The news is out and known to all. So the market is reacting now purely on technicals, and has factored in this news.

Till the time this P-Note issue is weaned out of the market, the market may not react to it. Unless, of course, the Government reconsiders its decision on winding up of the P-Notes.

Long term traders may now place stops at 4460. Short term traders may monitor 4538.

Trade happy after planning your trade.

Nifty for 27 Mar 08

2008-03-27T17:40:00.001+05:30

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 was nothing much to write home about. It was a day of consolidation. After today, it may be expected that the Nifty resumes its short term trend upwards.

The levels were mentioned yesterday, so it makes no sense to repeat them.

From tomorrow onwards, it could be expected that the Nifty makes a normal move for the whole of April, without the volatility of the last two months.

Trade happy after planning your trade.

Nifty for 26 Mar 08

2008-03-26T20:30:00.001+05:30

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 breakout from the short term downward sloping channel is still holding.

As was suggested yesterday, we may see a profit booking day after such a huge rise of yesterday. It should be encouraging for bulls that the breakout from the down sloping channel is still holding.

For tomorrow, we should monitor the ~4718 level for a possible sign of weakness. The next level would be ~4530. If that too does not hold, look for ~4470. Now for some explanations. The ~4718 level should hold in case this short term move is to sustain. If ~4530 does not hold, then we should have the alarm bells ringing. If ~4470 does not hold, then short term traders may look for the longer term trend.

And, as we have already been reading constantly, the intermediate term decider may be placed at ~4440.

Trade happy after planning your trade.

Nifty for 25 Mar 08

2008-03-26T16:34:00.002+05:30

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 reasons beyond my control, I could not upload this yesterday. For whatever it is worth, I am doing it today, to provide continuity to my regular readers.

Has the market surprised me? Yes I would say. It was anticipated that the up move would come around the expiration date. But it seems to have started at least two days in advance.

The market may now try and close this large gap of today, but the bulls may try and not allow that to happen. In any case, the short term bullish pattern which was suggested has occurred. Now the only condition to be fulfilled is that the previous bottom of ~4468 must not be violated.

As of now, I do not anticipate that even if this short term bullish pattern holds, it would lead to great things. We may see a good up move, but I expect the bears to regroup around the 5400 levels once again.

Once this whole cycle of news driven knee jerk reactions are out of the way, we may see a relatively smooth move for the month of April.

Trade happy after planning your trade.

Nifty for 24 Mar 08

2008-03-24T18:49:00.002+05:30

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.

Bulls, keep holding your breath. The previous bottom is still holding. As suggested last week and as was anticipated, we did see a bounce, but was met with immediate selling.

I did make a mistake in my musings last week, calling Monday as tomorrow.

Again, as stated last week, I reiterate that this up move may be viewed with a little scepticism, and not much weight may be placed on today’s gap up move.

For a short term bullish pattern, the Nifty must violate the swing peak of ~4716. The previous bottom of ~4468 must not be violated. As of now, I do not anticipate that even if this short term bullish pattern holds, it would lead to great things.

We have entered the last week of the derivatives cycle. Therefore, I do anticipate this week to be choppy.

I was asked a question, what I meant by stops being run, at the end of this cycle. It simply means that depending on the technical overweight positions, whether bullish or bearish, the opposite camps will attempt to run each other’s stops. As of now, the bears seem to be overweight, so it may be expected that the bulls will run the stops of the bears, and drive them out. Then we may see a relatively smooth move for the month of April.

Trade happy after planning your trade.

Nifty for 19 Mar 08

2008-03-19T21:54:00.002+05:30

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.

Bulls, hold your breath. The previous bottom is still holding.

The indices are attempting to make a short term bullish pattern. But have still not been able to. As is the norm nowadays, the Index opened with a gap, and then traded as it wished.

The sentiment is still not positive. We may see a bounce back up tomorrow, but it may be viewed with scepticism.

Tomorrow is the weekend.

Another reason why this move may be viewed with scepticism is that the Nifty Future seemed more bullish than the Nifty Index. All said and done, the Nifty Future is a derived trading product based on the Nifty Index.

It is my guess that the market may run stops near the derivatives expiry next week, and that could be a decisive bottom.

Therefore, it makes no sense to suggest trading levels for tomorrow either.

Trade happy after planning your trade.

Nifty for 17 Mar 08

2008-03-17T20:29:00.003+05:30

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 mentioned a few days back, we see there is a divergence between the BSE and the NSE Indices. The Sensex has already violated the previous panic swing bottom, whereas the Nifty is still holding out.

This brings us to the ultimate question. Which is more reliable? The Sensex or the Nifty! This simple question cannot be answered in a simple sentence. However, I will try.

The Sensex has more followers because of its age. However, the Nifty is more accurate because of its trading. The Nifty Future is traded reflecting the NSE Index, and therefore, I would place more reliability on the Nifty rather than the Sensex.

In any case, whether the Sensex or the Nifty, the sentiment is really fractured, as of now. On both the indices, we do not see any meaningful move, which can allow us to conclude that the short term trend is changing to up.

If the short term trend does not change to up, so will the intermediate trend also remain flat.

Therefore, for bulls, I can only suggest patience. I am still of the opinion that the market could swing from here. I may be wrong, as I have been wrong several times earlier. The market is so oversold, that something has to break. We could see a move up. And this anticipated move may be viewed by the so-called extinct bears of the Indian Stock Market as an opportunity to return. How strong will the bulls be? That remains to be seen.

But I know only one thing about the market, and that is a true age old adage. It takes a lot of money to push the market up because it needs real money to buy, whereas the market can collapse on its own weight because it does not need money to sell. Buy when there is “blood on the streets”.

Trade happy after planning your trade.

Nifty for 14 Feb 08

2008-03-15T19:12:00.003+05:30

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

2008-03-13T20:39:00.001+05:30

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

2008-03-12T19:43:00.003+05:30

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

2008-03-12T07:50:00.000+05:30

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

2008-03-11T07:49:00.002+05:30

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.

Nifty for 07 Mar 08

2008-03-08T11:06:00.001+05:30

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 does seem that my anticipation for the market turned out horribly wrong.

The previous intermediate bottom has been broken with a gap. This is not a good sign for bulls.

It does seem now that the market may test the previous bottom of 4450. Whether it does or not, remains to be seen.

One thing is sure. The market is not trending either upwards or downwards, from the intermediate term perspective. It has been sideways. The short term trend is down, of course. The long term trend is still up.

However, the long term trend also looks in danger of turning down. It could be prudent to hedge at this stage.

The longer lower shadow of today may be attributed to weekend short covering, and may not be significant, unless we have strong follow up buying on Monday.

Trade happy after planning your trade.

Nifty for 05 Mar 08

2008-03-06T16:41:00.001+05:30

Wish all readers a very pious Mahashivratri.

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.

So far so good for the Index. The ~4800 level has still not been violated as yet. In fact, due to the mid week holiday, we could probably see listless trading, even on Friday.

If indeed this bottom of 4th holds, we could be back on bullish track.

This is both from the price and time view.

However, as mentioned yesterday, we are still not out of the bear woods. There are many strong resistances built up over the last two trading months, which would be exerting their influence. The first major level would be the black box zone ~5400-5450.

The previous bottom of around 4450 is still alive, which is circled in blue.

Volatility could remain increased all through this month.

If we have gutsy bottom fishers, this could be an appropriate time to get into the act. As is always prudent, stops must strictly be adhered to and small losses cut ruthlessly, before they become unmanageable.

Trade happy after planning your trade.

Nifty for 04 Mar 08

2008-03-05T10:19:00.002+05:30

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 reached precariously close to the ~4800 level which could give us a hint of the intermediate term trend.

In fact, tomorrow, i.e. 5 March 2008, we come across a major cycle in time, from a long term perspective. In all probability, we could see the index bottoming either today or on 5th.

If indeed it does form a short term bottom, bulls would indeed be relieved. However, it is not that we are our of the bear woods. There are many strong resistances built up over the last two trading months, which would be exerting their influence. The first major level would be the black box zone ~5400-5450.

The previous bottom of around 4450 is still alive, which is circled in blue.

Volatility could remain increased all through this month.

Trade happy after planning your trade.

Nifty for 03 Mar 08

2008-03-04T08:12:00.002+05:30

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 trailing stop at 5090, which was suggested for short term traders, would have exited them from the market.

The short term trend has turned sharply down. However, the intermediate term trend has still retained some semblance of bullishness while being flat. Intermediate term traders are also cautioned that this is not an invitation to buy. For the intermediate term trend to turn down, we should monitor ~4800.

With such a sharp fall, it is expected that we may have some sort of short covering, which would allow partial recovery. However, this partial recovery could be viewed by bigger bears as an opportunity to short, and we may see selling at higher levels.

A word of caution. It is assumed that readers of these musings are small traders, who do not have a large capital base. Therefore, smaller traders are not suggested to short either, unless they are looking for scalping trades.

As had been suggested earlier, there are many clusters of cycles in time, which could allow volatility to increase all through this month.

Trade happy after planning your trade.

Nifty for 29 Feb 08

2008-03-01T12:06:00.001+05:30

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 makes no sense trying to analyse the market when sentiment are being driven from minute to minute by the news. However, it does seem that the market has not received the Annual Budget too well.

It would take another two or three trading sessions for the MBAs of the Financial Institutions to work out the implications of the Budget and devise their strategies towards the market. Therefore, it is suggested for the reader to stay away rather than risk capital. Short term traders could now place their trailing stop at 5090.

Allow the news to be assimilated and let the market tell us what it feels. Then only it would be prudent to enter the market, either way. So far the short term trend is still up, while the intermediate term trend is sideways.

Trade happy after planning your trade.

Nifty for 28 Feb 08

2008-02-28T20:29:00.001+05:30

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 seems to be making another try at the black resistance zone overhead. Today has been a damp squib as far as an expiration day is concerned.

There is not significant change from the technical position as of yesterday. Short term traders could raise their stops to a close below 5170.

Trade happy after planning your trade.

Nifty for 25 Feb 08

2008-02-26T09:55:00.002+05:30

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 Nifty did try to close the gap. The bounce back up is also very evident on the chart. It suggests that the bulls have an upper hand as of now.

The short term bottom which was formed today may turn out to be significant, if we see a short term bullish pattern emerge today. The short term correction seems to be over, both in terms of time as well as price.

Therefore, I suggest bulls to be prepared to take advantage of this.

On the flip side, we have been seeing the sentiment has been fluctuating wildly. Therefore it is suggested to adhere to s strict trading plan. Short term traders may retain ~4990 as a trailing stop for long positions.

Longer term traders may continue to buy on dips. The stop may be retained at a close below ~4950 for long positions.

Trade happy after planning your trade.

Nifty for 22 Feb 08

2008-02-23T17:58:00.001+05:30

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 again tried to close the gap between ~4950 and ~5050, as was suggested this week. It was expected that we may see a weak day with a bounce up towards the end. However, the expected bounce did not materialise.

The short term bullish pattern which was emerging yesterday has been negated.

As we are seeing almost on a daily basis, the sentiment is fluctuating wildly. Therefore it is suggested for short term traders to buy only after a short term bullish formation is complete.

Longer term traders may continue to buy on dips. The stop may be retained at a close below ~4950 for long positions.

Trade happy after planning your trade.

Nifty for 21 Feb 08

2008-02-21T19:10:00.002+05:30

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 tried to close the gap between ~4950 and ~5050, as was suggested yesterday. It was also suggested that we may see a weak day with a bounce up towards the end.

As of today, we do see some change in sentiment. We also see the earlier gap not being closed. Anyway, as of now, a short term bullish pattern may be emerging.

This would be valid if the Nifty breaks above 5242 on the upside and does not violate 5115 on the downside.

Short term traders may wait to buy after this short term bullish formation is complete.

Longer term traders may continue to buy on dips. The stop may be retained at a close below ~4950 for long positions.

Trade happy after planning your trade.

Nifty for 20 Feb 08

2008-02-20T20:53:00.003+05:30

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 challenge zone has had its effect as anticipated. As of now, the market seems to be looking to close the gap between ~4950 and ~5050.

Tomorrow may continue to be weak and we may some intraday short covering towards to end of the day. The short term trend may continue to be weak for another week. The bulls would be hoping for some sort of bounce back, but it is expected that they may not be strong enough.

In such a case, it would be advisable to allow the news driven negative sentiment to drive itself out.

Short term traders may wait to buy after a short term bullish formation.

Longer term traders may continue to buy on dips. The stop may be retained at a close below ~4950 for long positions.

Trade happy after planning your trade.

Nifty for 19 Feb 08

2008-02-19T18:34:00.001+05:30

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 suggested yesterday, the market has reached the real challenge zone. The black box still is not violated.

A gap open, a sharp retest of the “zone” and a closing of the opening gap. All in a day’s work.

The candle for today suggests a breaking of the upward momentum. It could be wise to be cautious at this stage. Stops may be raised, either to lock in profits or to protect losses, depending on what time frame of trading the reader chooses.

Longer term traders may continue to buy on dips. The stop may be retained at a close below ~4950 for long positions.

Trade happy after planning your trade.

Nifty for 18 Feb 08

2008-02-18T18:31:00.000+05:30

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 suggested yesterday, the market did try and close the gap. It was unsuccessful, and therefore, we see a sharp spurt up.

The black box overhead is going to be a real challenge zone, both for the bulls as well as the bears. The bulls will try their hardest to pierce that range whereas the bears are going to try and protect it. The odds are at present in favour of the bulls. Monday could be lacklustre as USA is going to have a long weekend.

Traders may continue to buy on dips. The stop may be retained at a close below ~4950 for long positions.

Trade happy after planning your trade.

Nifty for 15 Feb 08

2008-02-16T15:31:00.002+05:30

Nifty for 14 Feb 08

2008-02-14T21:05:00.002+05:30

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 was suggested yesterday that the market may be bottoming here. But the huge gap open has taken me by surprise. I am sure it would have taken a lot of traders by surprise too.

The market may attempt to close this gap of today. If it does, then we could see the emergence of a bullish pattern.

Therefore is may be suggested for traders to buy now on dips. The stop may be retained at ~4800 for long positions.

Trade happy after planning your trade.

Nifty for 13 Feb 08

2008-02-13T19:13:00.001+05:30

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.

A close study of today’s intraday chart shows that the market is attempting to make a short term bottom here.

But it also shows that there is no trend. We see large hourly bullish and bearish ticks side by side. This suggests that the market may be bottoming here, but is still undecided.

The banking sector is the frontrunner if we are indeed to see a short term bottom here.

The negative sentiment is slowly being weaned out of the system, even though we do not see a full scale positive mood.

Short term traders could buy after a short term bullish pattern emerges from the trading. A stop may be placed at ~4800 for long positions.

Trade happy after planning your trade.

Nifty for 08 Feb 08

2008-02-09T14:40:00.000+05:30

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.

Well. The first cluster of supports is broken. It should tell us that the market is in no hurry to be bullish.

The last hour rush up may again be attributed to week-end short covering.

At this stage, the previous support ~4996 may also be broken. Therefore, we should be careful of our long positions. In fact on the intraday chart, we see a technical pattern called an island reversal. Purists would argue that this is not a classic island reversal, and it should happen only at market peaks. So … what the hell? It is not a classic pattern, but it is a pattern nonetheless.

The market has peaked for the short term at around ~5550 levels. I would advise bullish positions only after that high is violated. Till then, we could even short the market on rises, keeping the previous cluster of ~5400 as a stop.

The only silver lining in the dark clouds is the IT sector, which may just have bottomed.

Trade happy after planning your trade.

Nifty for 07 Feb 08

2008-02-07T18:48:00.000+05:30

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.

In spite of the huge down day today, the technical position still has not changed.

The blue circled supports still stand good.

Short term traders could well stay out, while longer term traders could monitor the previous cluster of supports around ~5100 for signs of strength or weakness. If these clusters of supports are broken, then we may well see the index testing the previous bottom around the 5000 levels. If that too does not hold, then the next bottom of ~4450 may be tested.

That is a large number of points from here, so it is suggested to avoid the temptation of bottom fishing. Please wait for the emergence of a short term bullish pattern to buy.

It has stood us well over time, so let us not tempt the demons of capital loss.

Trade happy after planning your trade.

Nifty for 06 Feb 08

2008-02-06T20:21:00.000+05:30

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 seem to be back to square one. A huge gap up one day and a larger gap down the next. The extra bullish scenario which we talked about just yesterday has been nullified.

The other blue circled supports still stand good. It is some measure of the volatility, where online trading brokers do not allow intraday trading. In fact, maybe because of that very reason, the market is unable to seek its true price discovery.

Short term traders could well stay out, while longer term traders could monitor the previous cluster of supports around ~5100 for signs of strength or weakness.

Trade happy after planning your trade.

Nifty for 05 Feb 08

2008-02-05T18:09:00.000+05:30

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 we saw a nothing day. But technically speaking, the market has indeed stayed above the danger levels on a short term basis. We could continue with the levels mentioned for yesterday.

Short term traders could now do well to raise their stop to the 5385 level to lock in loss of capital. Longer term traders could wait for a close below 5385.

If in the next few days, this gap is left open, we could be seeing a short term runaway gap, which signals an extremely bullish scenario for the market. Further, if the Nifty moves up higher than 5546, that too would be a bullish signal.

Nifty for 04 Feb 2008

2008-02-04T19:43:00.000+05:30

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 was an ideal buying opportunity, both for short term and longer term traders. The market behaved, giving us a buy signal, as was suggested on Friday.

The market gapped through the previous swing tops, and then corrected enough to take support at the same precise level.

Short term traders could now do well to raise their stop to the 5385 level to lock in loss of capital. Longer term traders could wait for a close below 5385.

If in the next few days, this gap is left open, we could be seeing a short term runaway gap, which signals an extremely bullish scenario for the market.

Trade happy after planning your trade.

Nifty for 01 Feb 08

2008-02-02T15:23:00.000+05:30

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, we did see a sharp spurt up due to short covering. Even though we see intraday swings of 3 to 5% the trend is still undecided.

The tops of ~5400 still hold. However, the bulls will take heart with the higher bottoms too.

Short term traders could buy on dips with a strict stop at the previous swing low of ~5100. Longer term traders could do well to wait for the previous swing top of ~5400 to be broken on the upside. That would exhibit enough strength in the market. After that is broken, then we could buy on dips.

Till then, it is better to stay out.

Nifty for 31 Jan 08

2008-02-01T09:49:00.000+05:30

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.

There is absolutely no change in the observations of yesterday. The earlier short term top is marked as the attacking point for the bears.

We had seen good profit booking coming along the ~5400 levels. The previous swing bottom ~5070 could be closely watched for weakness. If that holds, then we could continue to buy on dips.

The market was showing volatility mixed with mild strength overall till yesterday. Today the scene seems to have changed.

Therefore, we could now wait for buying. Stop losses may be strictly adhered to, to preserve capital. Please do not forget the fact that tomorrow is the weekend, and we may see a sharp spurt up, due to short covering.

Trade happy after planning your trade.

Nifty for 30 Jan 08

2008-01-31T09:42:00.000+05:30

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 earlier short term top is marked as the doubt level on the chart.

There is no change from the observations of yesterday. We see good profit booking coming along the ~5400 levels. The previous swing bottom ~5070 could be closely watched for weakness. If that holds, then we could continue to buy on dips.

The market is showing volatility mixed with mild strength overall. In that case, dips may be bought into. Stop losses may be strictly adhered to, to preserve capital.

We have a cycle in time falling tomorrow, that is on 31 January. We could see the Nifty making a short term bottom.

Trade happy after planning your trade.

Nifty for 29 Jan 08 Another Update

2008-01-30T10:52:00.000+05:30

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 charts alongside are of the crashes in the Indian market and how the Nifty future reacted to it. The first chart is of May 2004.

The second is of January 2007.

The similarities cannot be ruled out. The May 2004 chart shows how long the market had to wait, till the negative sentiment was negated. On the other hand, we see the same thing happening in a very short time in Jan 2007.

It is assumed that the "doubtful" region shown in my earlier post, would be broken on the upside. Of course, corrections cannot be ruled out. However, if the 5400 level is indeed broken with good volumes and stays above it, we could be looking at heady bullish days.

That does not mean we neglect our stops. Stop losses have preserved capital and locked in profits for us on hundreds of occasions. Give the market the respect it deserves.

Trade happy.

Nifty for 29 Jan 08

2008-01-30T09:07:00.000+05:30

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 an intraday view, we had another hugely volatile day. From the end-of-day perspective, it was a nothing day.

The earlier short term top is placing doubts in minds of traders and we see good profit booking coming along the ~5400 levels. Therefore from a short term view point, the swing bottom of yesterday ~5225 could have significance. That is because we have seen good buying coming along at that level.

The previous swing bottom ~5070 could be closely watched for weakness. If that holds, then we could continue to buy on dips.

The market is showing mild strength overall. In that case, dips may be bought into.

Trade happy after planning your trade.

Nifty for 28 Jan 08

2008-01-29T08:22:00.000+05:30

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.

Yesterday it was suggested that we may see another downside. As was also suggested, we are witnessing huge intraday volatility.

There was a large downside opening gap, and an equally sharp upward retracement. So far the previous bottom seems to be holding.

In such a scenario, we could use dips to buy.

Slightly longer term traders could now watch 5080, and long term traders could monitor the previous bottom ~5000.

Nifty for 25 Jan 08

2008-01-27T01:00:00.000+05:30

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 indices continue in the short term bullish pattern. For those among us who have bought, the previous bottom of 5000 becomes important.

As far as the pattern goes, it seems that the rise from ~4450 to 5400 is the upwards correction for the ~1900 points fall in just a fortnight. Therefore, in all probability, we may have another short term down swing. It is also anticipated that the severity of the next downswing may not be as intense as the last week’s.

In such a case, we could use dips to buy.

Slightly longer term traders could continue to 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.

2008 Republic Day Greetings

2008-01-26T17:26:00.000+05:30

Nifty for 24 Jan 08

2008-01-25T10:01:00.000+05:30

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

2008-01-24T09:16:00.000+05:30

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

2008-01-21T21:39:00.000+05:30

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.

Nifty for 18 Jan 08

2008-01-19T15:03:00.000+05:30

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 we can see the Index is relentlessly slicing through all the supports. If it carries on further like this, then we may see the intermediate term trend turn down too.

The flip side is that the fall is accompanied with very low volumes. Therefore, as soon as some buying interest comes in we are likely to see a good bounce back up. Till we see such a bounce, and a short term bullish pattern, it is suggested to stay out.

Those among us with slightly shorter term horizons may use a rise to short, keeping tight stops. Any move which is against the trend is generally volatile, and we may find ourselves on the wrong side of the trade.

In volatility, it is always prudent to hedge positions. We have a cycle in time falling during the weekend. Let us see what it brings.

Trade happy after planning your trade.

Nifty for 17 Jan 08

2008-01-18T05:41:00.000+05:30

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 was suggested yesterday that the Nifty may encounter resistance around the earlier zone. The interplay between the support and the resistance will now determine the future of the Nifty. In fact the Nifty has made a short term bullish formation, but fell back sharply from the high of the day. If the Nifty is able to break 6015 towards the upside, and does not violate 5875, then we could assume that the short term trend has reversed to up.

Going ahead, it is expected that the Index could remain flat to weak for Friday and even Monday, and then consolidate on this short term bullish formation.

I can only repeat yesterday’s 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.

Nifty for 16 Jan 08

2008-01-16T22:20:00.000+05:30

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 today’s chart, we see two aspects, one hugely bearish, and the other, a little encouraging for the bulls. The bearish part is the gap down opening, and the encouragement for the bulls is the bounce from a previous support/resistance level.

Our stop of 6110 has been triggered. In such a case we could be out of the market. The huge gap down opening seems to have been triggered by the negative sentiment worldwide.

Further, the Nifty has also made a short term bearish formation.

Therefore, because the pink support zone box has been violated convincingly, we must assume that this support zone will now offer huge resistance, if and when the Nifty tries its move up. Going ahead, it is expected that the Index could remain weak for another day or so, and then make a short term bullish formation.

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.

Nifty for 14 Jan 08

2008-01-15T05:24:00.000+05:30

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 chart pattern, it does seem that the Nifty is attempting to make a short term bullish pattern. In that case, it could continue its secular upward move soon.

Traders could take the risk of buying now, and place a stop at 6100. The short term uptrend would be confirmed if the Nifty moves above 6245 and does not violate 6100.

Trade happy after planning your trade.

Nifty for 11 Jan 08

2008-01-12T08:58:00.000+05:30

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 was suggested yesterday ... “Tomorrow being a weekend, we may see support coming in around the 5900 levels, and then short covering may allow the Nifty to recover quickly. The Bank Nifty still indicates to be among the stronger sectors.” The recovery in the Index was largely contributed to by the Banking sector.

Well … the 5900 levels were not achieved but we did come 100 points near it. After today, the questions arises … How do we trade this?

I simple glance at the chart will show us that the short term price is moving down more than it is moving up. On the other hand, if we step back, we still see that the previous bottom of 6060 has not been violated. At this point in time, it is apparent that this is a short term downside move within the secular upside move.

As suggested earlier, today’s upwards retracement could be due to short covering. Thus we could anticipate one more down move. If, however, the Nifty moves higher than 6350, it would mean that the correction is over, and the Nifty has resumed its upward secular trend.

It is also true that the earnings announcements will motivate knee jerk reactions, thereby increasing intra day volatility. Therefore, it would be a good idea to work with hedging.

Trade happy after planning your trade.

Nifty for 10 Jan 08

2008-01-11T07:07:00.000+05:30

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.

According to the analysis yesterday, it was suggested that the market is readying to correct. And it does seem that the correction has started. The cycle in time mentioned earlier was on 13 January. It does seem that the market has jumped the gun by a few days.

Maybe readers would get tired of reading the same words again and again. However, it does seem appropriate as a reminder, that we are in a long term bull market, and we would see many short and intermediate term moves counter to the main trend. These dips may be used to buy in.

Tomorrow being a weekend, we may see support coming in around the 5900 levels, and then short covering may allow the Nifty to recover quickly. The Bank Nifty still indicates to be among the stronger sectors.

Trade happy after planning your trade.

Nifty for 09 Jan 08

2008-01-09T18:21:00.000+05:30

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 was a neither here nor there day. In fact, the Sensex had made a new historic high, but on the other hand, the Nifty did not.

When the market itself is uncertain, it is better to be defensive rather than offensive. Therefore it would be prudent to stay long while maintaining the stop at a closing below 6220, as suggested yesterday.

The overall profit booking seems to have subdued as of now. There has been a major decline in the totally traded volumes on both the exchanges. Which also suggests the uncertainty of the market.

Status Quo.

On the last note ... India is not US, and US is not India. Knee jerk reactions between the USA and India markets will happen on a day to day basis.

I urge readers to look at the long term picture.

Trade happy after planning your trade.

Nifty for 08 Jan 08

2008-01-09T07:27:00.000+05:30

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 potential target zone which I have been carrying for the last few days seems just around the corner. Is it going to be a case of so near yet so far?

Today has been a classic case of overall profit booking on most sectors while the IT sector has witnessed buying interest, which is propping up the Index. Today’s move also validates the support zone which has been carried on the earlier charts. Even though today was a weak day, it still does not show a short term bearish bias on the Index. Therefore it would be prudent to stay long with a stop at a closing below 6220.

However, due to the overall profit booking mood, it does seem that we may see a downside correction for a few days. We notice that during the last three months, all the corrections have been shorter in nature than the earlier ones. It may be expected that this overall trend continues. However, please do not initiate any trades on assumptions but on cold hard facts. Look out for a short term bullish pattern before initiating any long trades.

Trade happy after planning your trade.

Nifty for 07 Jan 08

2008-01-07T18:13:00.000+05:30

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 previous high of ~6200 and the second congestion around that zone now seem to be lending a supporting hand to the Nifty.

In spite of today’s weak opening, that seems to have held out. Therefore, it is logical to assume that this trend should continue. In such a case, this would also be an ideal place to insert a trailing stop, with a close below 6200.

As mentioned earlier, it is always advisable to stay with winning sectors rather than hope that the losing sectors would turn up. There are signs of profit booking showing. That is the reason why we are witnessing higher than usual intraday volatility. It may be a good idea to maintain stops for the present time. Since the uptrend is so strong, shorting seems out of the question as of now.

We are also seeing a cycle in time around 13 January. It is possible that the Nifty may make a decisive move around that date.

Trade happy after planning your trade.

Nifty for 04 Jan 08

2008-01-04T19:59:00.000+05:30

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 the last post of the last year, I had mentioned that the Nifty may achieve just 6245. However, as is apparent on the chart, it paused very slightly on that level and then just rushed through.

In any case, it is still hovering around that 6245 level. We see huge sector rotation happening. The Bank Nifty was correcting in a small way today. The CNXIT index is truly weak, while other sectors were pushing the Index up to new heights.

Mainly led by the Metals and the Oil and Gas sectors. The manner in which the Index has shot up today suggests that the next range of targets is not far away. Yet, at this stage, I would inject a word of caution. The Index is showing greater than normal volatility. The reason for this seems the profit booking is on in various sectors. This could burn a few holes in short term trader’s pockets.

On the other hand, from a really longer term perspective, if this rising triangle breaks out, the sky is the limit for the Nifty. Well not exactly the sky, but we could see the 8000 mark on the Index.

Trade happy after planning your trade.

Nifty for 31 Dec 07

2007-12-31T17:26:00.000+05:30

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 has been quite some time since I last posted. In my last post, it was suggested the market could make a short term top due to the cluster of time cycle between 13 to 16 December. It did.

It was also suggested that an up and down roller coaster could continue till 21 December. It did.

Also, as was suggested, that the “warehousing fever” could start around the last week of this month. It did.

It is reward enough for this humble analyst that readers could have made opportune exits and then re-entries based on my earlier suggestions. Looking ahead, the market is pausing at a previous target which provided resistance earlier too.

The market is now poised delicately. It does seem that the previous top will be broken. How far will it break? This time I do not anticipate a large margin. The anticipated level it could achieve is 6245. After that we could see a correction. Be on guard.

Have a good year ahead. Not a greedy one.

Trade happy after planning your trade.

Nifty for 13 Dec 07

2007-12-13T22:17:00.001+05:30

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, we are approaching a cluster of time cycle between 13 to 16 December. It does seem that the market has made a short term top today.

This up and down roller coaster could continue till 21 December.

From a trading perspective, the trailing stop is marked out on the chart. This could be used by readers to lock in profits. This is not an invitation to short. As was suggested some time earlier, let us learn to trade with the trend. Normally at this time of the year, the big players are planning on taking their Christmas vacation.

This leaves markets all over the world, vulnerable to manipulation on small volumes. Therefore, it may be advisable to sit on the sidelines till the “warehousing” fever starts, where our local players begin to accumulate stocks in the anticipation that the FIIs would start their activities after the New Year.

Trade happy after planning your trade.

Nifty for 12 Dec 07

2007-12-12T23:34:00.000+05:30

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, there was some panic buttons hit on the open, with a gap down opening. However, the market was resilient enough to recover right from the word go, and has hit a short term objective which we have been seeing on my charts for a long time.

When a mathematical objective is achieved, it is logical to seek the next probable objective. That falls around the 6400 to 6450 levels. The time cycle of 13 to 16 December is just around the corner. Therefore, we as traders should remain on guard for some volatility.

Maybe … the market may make a short term top around these dates.

The Nifty still does not seem to have peaked. We could retain our long term bullish outlook, and it may be suggested to buy on dips.

Trade happy after planning your trade.

Nifty for 11 Dec 07

2007-12-11T22:47:00.000+05:30

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 was suggested precisely a week back that the market is waiting for the news based event viz. the expected rate cut in the USA. And during this week, the market is playing itself out, discounting the expected event. When the news comes in, we can expect one of two things.

The rate cut happens.

The rate cut does not happen.

If the rate cut happens, the market has already expected it and has already factored that expectation in the price. In that case, it will be business as usual. We can expect some profit booking to the “expected” news.

However, if it does not happen, then we can expect some panic buttons to be hit. In such a scenario, it is always advisable to keep tight stops.

It was also suggested last week that …. “we have a short term time cycle falling tomorrow i.e. 5 December. A longer term cycle falls between 13 and 16 December. Let us wait and watch and see what the Index does on these days”.

Maybe … the market may make a short term top around these dates.

The last word. The Nifty still does not seem to have peaked. In such a case, we could retain our long term bullish outlook, and it may be suggested to buy on dips.

Trade happy after planning your trade.

Nifty for 04 Dec 07

2007-12-04T21:08:00.000+05:30

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.

Not much needs to be said of yesterday’s chart. It has broken out from the yellow zone.

It is a sign of bullishness which we have discussed since a fortnight.

Today the Nifty has showed some hesitation at a psychological level which was an earlier target level. The market is hesitating for a very simple news driven event. The rate cut to be announced on 11 December in the USA.

Till then, it is expected that the market could meander a little aimlessly. In any case, the direction is expected to remain upwards. For bullish positions, the trading stop could be suggested at 5600. However, the yellow zone which has been applying resistance earlier could be expected to give a short term support. And may be pierced slightly on the downside.

There is speculation also that the BIG players are buying the Nifty futures and selling stocks. Ultimately, it all boils down to one thing. The tail can wag the dog for a short period. In the final countdown, the dog owns the tail.

We have a short term time cycle falling tomorrow i.e. 5 December. A longer term cycle falls between 13 and 16 December. Let us wait and watch and see what the Index does on these days.

Trade happy after planning your trade.

Nifty for 30 Nov 07

2007-12-01T17:12:00.000+05:30

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 has been a week since I posted on my Blog. On my last post for 23 November, it was suggested to maintain a stop at 5394. Since then, it has not achieved that level.

It was also suggested that the short term trend would be termed as up in case the Nifty moved above 5638. In such a situation, it is assumed that readers would still be comfortably long. The stop could be raised to 5596.

As can be seen on the hourly chart, the short term trend is still up. This suggests that the Nifty may achieve higher numbers and the last peak may also be violated. The yellow zone is exerting a lot of influence due to profit booking. Indeed if we just glance back at the chart, it does show that the yellow zone is a hugely significant psychological level. The odds are now favouring this zone to be broken with conviction on the upside.

Trade happy after planning your trade.

Nifty for 23 Nov 07

2007-11-24T08:36:00.001+05:30

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 the face of it, we do see follow up buying to validate Thursday’s bounce. However, the follow up buying is not strong. It may be assumed that the FII’s were absent due to the holiday on Friday in the USA.

On the intraday charts, we saw a short term bullish pattern yesterday. Again, on the intraday charts, it has been validated. But not on the hourly chart. For the short term pattern to be validated, on Monday, the Nifty should move above 5638, and not fall below 5394.

This gives us a large range. To avoid large scale risk, traders could buy keeping the stop at 5394.

Trade happy after planning your trade.

Nifty for 22 Nov 07

2007-11-23T08:36:00.000+05:30

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 bounce for today was strong. It needs to be validated tomorrow. In all probability, this bounce is only due to short covering. This suggests that this up move may be short lived.

However, please remember, this is only an assumption. If the Nifty continues its journey upwards and fails to violate 5390 on the downside then the short term trend would resume upwards.

On the intraday charts, we have seen a short term bullish pattern, which still needs to be validated.

There was a question, why I have not suggested going short. The simple reason is that a trader must learn to sail with the wind. It takes much lesser effort to make profits. The 5070 level was just a mathematical projection. It is not necessary that the market could achieve that level. It could stop before. Just like it has done today.

The main trend is still bullish. We see a bullish pattern on the intraday charts. We may hazard entering long positions. However, this phase is a correction in the main up trend. And as we know, any move which is counter to the trend is volatile. It is, therefore, prudent to stick to the trend.

Trade happy after planning your trade.

Nifty for 21 Nov 07

2007-11-21T21:09:00.000+05:30

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.

When the market tanks, fast and furious, it catches traders off guard. However, readers would have been warned to take evasive action yesterday.

It was suggested yesterday that we may achieve 5070 levels on the Index. However, the small expected upside did not happen. It was one way street.

For the short term trend to change upwards, the Nifty should violate 5695 on the upside and not break 5530. It seems the short term bulls may take a short vacation till we have a convincing bullish pattern.

The main trend is still bullish. But we could wait for a bullish pattern to enter long positions.

At time like this, bottom fishers come out in droves and usually end up burning big holes in their pockets. To such potential bulls, I suggest patience, and confirmation. Allow the market to confirm before committing capital.

Trade happy after planning your trade.

Nifty for 20 Nov 07

2007-11-21T08:16:00.001+05:30

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.

Contrary to what was expected, the market has gone into a volatility mode rather than breaking out. This normally happens when the market is correcting. With just a week away from derivatives expiry, this market could shake out long positions. In such an event, the Nifty could achieve the 5070 level or thereabouts.

We also see a strange phenomenon. Normally, this type of pattern does not occur at a market high. A potential head and shoulder pattern seems to be emerging on the intraday charts. For this pattern to be validated, the Nifty should not go below 5500 levels.

We could see a small upside tomorrow. However, for the short term trend to change to upwards, the Nifty should move above 5924 and not violate the bottom of 5756.

We could maintain our suggestion of bullish outlook and could continue to buy on dips. At times like this, it is very important to wait for a bullish pattern to emerge on the intraday charts, rather than try and jump ahead of the market. As a reminder, the example of a bullish pattern is already placed on my Blog.

Trade happy after planning your trade.

Nifty for 19 Nov 07

2007-11-20T08:16:00.000+05:30

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 charts it is very obvious that the market is testing the resistance again … and again and again. Normally, when the market tests such a resistance several times and is unable to break it, it collapses fast and furious. However, it has not done so. In such an event, it may be surmised that the market is preparing to break out on the upward direction. And this move also could be fast and furious.

We also notice that the downside movement has not been substantial. Therefore, logically, the market should give another 500 points from this stage IF it breaks out upwards. But please remember the suggestion made last week. That of volatility.

We could maintain our suggestion of bullish outlook and could continue to buy on dips.

Trade happy after planning your trade.

Nifty for 16 Nov 07

2007-11-17T07:26:00.001+05:30

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 may be seen from the charts of this week, the Nifty is pausing at crucial levels. Whether it is on the way up or down. This suggests that the market is behaving rather well, technically.

As frequent readers of my musings would know, my method of technical analysis is not the art of making “forecasts”. I would prefer to take a look at the past movement to make an assumption for the future. However, assumptions should never replace a trading plan, and readers could maintain their plans according to their own time frames and comfort levels.

We can see that the movement for last week has been corrective in nature. Therefore, we could assume that the trend could continue upwards after this corrective phase is over.

The next fortnight has a lot of time cycle clusters, so we may witness higher volatility than normal.

We could maintain our suggestion of bullish outlook and could continue to buy on dips.

Trade happy after planning your trade.

Nifty Charts for Second Week of November

2007-11-17T05:21:00.000+05:30

The charts for this week, gone by.

Nifty for 06 Nov 07

2007-11-07T09:25:00.000+05:30

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.

There seems to be no change from the last analysis. On the intraday chart, the Nifty seems to be consolidating. The established support range is again being tested. As a reminder, we need to remember the significance of this support range.

Short term traders could keep their trailing stop at a close just below the support range to avoid large losses.

The traded volumes during the last several trading sessions suggest that the market is very skittish. We see increasing volumes on down days. However, the price pattern on the charts does not suggest that we have seen the end of the Bull Run.

We could maintain our suggestion of bullish outlook and could continue to buy on dips.

Trade happy after planning your trade.

Nifty for 02 Nov 07

2007-11-03T23:38:00.000+05:30

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 the intraday chart, the Nifty seems to be consolidating. It has also established a fresh support range. This support range is more significant especially when the Nifty had paused thrice around those levels. Further, it had broken out of that range with a huge gap. That gap has been closed today.

The only discomfort which I can point out is that the overall traded volumes on both the exchanges were not too heavy. That could put a slight shadow of doubt on the recovery of Friday.

Other than that, nothing deters me from suggesting my anthem … buy on dips.

Trade happy after planning your trade.