Nifty for 13 Jun 07

These are my personal musings. These are not in any way meant to be trading advise. To view the full chart, right click and open in a new window.

As explained yesterday, we continue to label the intermediate trend to be down.

For the short term trend to reverse, the levels for the Nifty are a breakout on the upside of 4164 and not violating 4100 on the downside.

For the intermediate term trend to reverse to up, we need a breakout on the upside of 4206, and the Nifty should not cross 4100 on the downside.

Continue to wait for a confirmation of the end of the short term downtrend, and then readers could buy.

I still maintain that within a day or two we may see a short term reversal. Whether it is strong enough to change the intermediate trend remains to be seen.

Plan your trades and trade happy.

Nifty for 12 Jun 07

These are my personal musings. These are not in any way meant to be trading advise. To view the full chart, right click and open in a new window.

As has been suggested, earlier, the historic rising trendline has been tested and violated. There was a sharp bounce from those levels today. This goes to confirm the validity and the importance of this support zone.

If the bottom of today at 4100 is not held, then we could continue to see some more weakness going ahead. Because the earlier bottoms have been violated on the hourly chart, we also label the intermediate trend to be down.

For the intermediate term trend to reverse to up, we need a breakout on the upside of 4206, and the Nifty should not cross 4100 on the downside.

Continue to wait for a confirmation of the end of the short term downtrend, and then readers could buy.

Bulls could take heart from the fact that on the daily charts, the intermediate trend to be down is at 3980. This is just some points away. Which could happen in a day or two.

Plan your trades and trade happy.

Nifty for 08 Jun 07

These are my personal musings. These are not in any way meant to be trading advise. To view the full chart, right click and open in a new window.

The chart says it all. The Nifty is still hovering around the support zone. We also see it testing the lower rising trendline, which has been tested several times historically. The short term trend is still down. The intermediate term trend is now showing signs of being vulnerable. Please remember, this is on the hourly chart. The long term trend is still up.

As suggested again and again, wait for a confirmation of the end of the short term downtrend, and then readers could buy. The levels for Monday could be, when the Nifty violates 4196 on the upside, and then does not violate 4128 on the downside.

Plan your trades and trade happy.

Nifty for 07 Jun 07

These are my personal musings. These are not in any way meant to be trading advise. To view the full chart, right click and open in a new window.

The short term trend is still down. The intermediate term trend is still up. Please remember, this is on the hourly chart. If we look at the daily chart, we have to follow the same principle. The long term trend is still up.

Today, the Nifty has re-tested and confirmed a support zone. As was suggested yesterday, we did see a gap down opening, in the first hours of trading. We also did see some buying support coming in, by the way of short covering.

As suggested yesterday, wait for a confirmation of the end of the short term downtrend, and then readers could buy. This would be tomorrow, when the Nifty violates 4230 on the upside, and then does not violate 4161 on the downside.

Plan your trades and trade happy.

Nifty for 06 Jun 07

These are my personal musings. These are not in any way meant to be trading advise. To view the full chart, right click and open in a new window.

The Index has surprised me by its sharp downward move. The tight movement of the last few trading sessions was suggesting a sharp move. However, the direction was unanticipated. But then, that is what stops are for.

Please take a look at the hourly chart. The red circles are the intermediate bottoms. The blue circles are the short term bottoms.

After today’s action, the short term trend is down. The intermediate term trend is still up. Please remember, this is on the hourly chart. If we look at the daily chart, we have to follow the same principle.

And in any case, the long term trend is still up.

Today, the Nifty has rested on a support zone. With the hugely negative sentiment, we may see some follow up selling tomorrow too, in the first hours of trading. We may then see some buying support coming in, by the way of short covering.

Please do not assume anything and do not try bottom fishing. Allow the index to confirm the support at whatever level it chooses, and then buy.

Therefore, please revisit the link on my blog for the bullish set up. As of now, shorting could be hazardous. Here is the link for convenience. http://dusant.blogspot.com/2007/01/nifty-for-11-jan-07.html

The next short term cycle in time falls on June 11. So we may see this downtrend continue till then.

Plan your trades and trade happy.

Nifty for 05 Jun 07

These are my personal musings. These are not in any way meant to be trading advise. To view the full chart, right click and open in a new window.

The Nifty is continuing its consolidation pattern. We still have a higher bottoms scenario in place. The bounce for today seems very convincing. However, the Nifty is moving in a very tight range over the last few trading sessions. This is like a spring being coiled.

Which way will it jump? The probability remains up. Today’s bounce is accompanied with slightly better volumes. Which leads me to believe that the direction could continue up. That means we can still buy on dips. The crucial test will be 4140, as has been mentioned several times earlier too.

Plan your trades and trade happy.

Nifty for 01 Jun 07

These are my personal musings. These are not in any way meant to be trading advise. To view the full chart, right click and open in a new window.

The Nifty has again proved the psychological supply line true. It really does not matter as of now. The market still seems to be in bullish mode. We also see a rising support line. The short term support may be tested. If it breaks the rising support, we have to do a rethink, depending on the technical position as of then.

Till then it is suggested to continue to maintain a bullish frame of mind.

The Index is continuing a well defined consolidation pattern.

Plan your trades and trade happy.

Nifty for 31 May 07

These are my personal musings. These are not in any way meant to be trading advise. To view the full chart, right click and open in a new window.

I hate to say, I told you so. But the market has proved this humble analyst correct. And also proved how media hype can affect the sentiment on certain days.

Going ahead, the Index is showing a consolidation pattern. The psychological supply line still is bothering the market. But if this breaks, then we will have a no holds barred bull market. This is not a trading suggestion but a suggestion to plan your trades and trade happy.

Nifty for 30 May 07

These are my personal musings. These are not in any way meant to be trading advise. To view the full chart, right click and open in a new window.

As was suggested yesterday, “the chart also shows a long term psychological supply line which is extending short term resistance. Short term traders could do well by raising their stop to 4240, which is slightly below the previous historic peak.” The supply line seems to have had its effect today. There is nothing in today’s chart which suggests panic.

In fact, it was the media which was hyping the Shanghai effect. Whereas, if we just step back in time, we will see how the Shanghai Index has outperformed the Indian bourses. Here are some comparative charts, courtesy Yahoo!.

As usual, please right click on the charts, and open in a new window.

Here is a three month comparison, where the Shanghai Index is up in the high 55% region, whereas the Nifty has moved less than 20%.

Now take a look at the six months comparison. As they say, one picture is worth a thousand words.








But wait a moment, take a look at the next chart, over one year.

A whopping 150+%. And the media hypes a six percent fall.

Had it not been for the Capital Goods and the Consumer Durables sectors, the effect on the Indices would have been worse. Longer term traders could still maintain 4140 as their stop. The derivatives expiry will contribute to volatility, so partial hedging also may be advisable. Short term traders may decide their own level of comfort for absorbing a loss, but as oft repeated, a stop is a must.
Plan your trades and trade happy.

Nifty for 29 May 07

These are my personal musings. These are not in any way meant to be trading advise. To view the full chart, right click and open in a new window.

Today’s chart shows a steady bullish action, where there has been steady buying, keeping the prices moving higher. This establishes a wide 50 point support range for the short term.

If this support is tested and holds, then we could see continued buying support and historic highs being made on a regular basis.

The chart also shows a long term psychological supply line which is extending short term resistance. Short term traders could do well by raising their stop to 4240, which is slightly below the previous historic peak.

Longer term traders could still maintain 4140 as their stop. The derivatives expiry will contribute to volatility, so partial hedging also may be advisable.

Plan your trades and trade happy.

Nifty for 25 May 07

These are my personal musings. These are not in any way meant to be trading advise. To view the full chart, right click and open in a new window.

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

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

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

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

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

Plan your trades and trade happy.

Nifty for 24 May 07

These are my personal musings. These are not in any way meant to be trading advise. To view the full chart, right click and open in a new window.

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

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

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

Plan your trades and trade happy.

Nifty for 23 May 07

These are my personal musings. These are not in any way meant to be trading advise. To view the full chart, right click and open in a new window.

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

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

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

Plan your trades and trade happy.

Nifty for 22 May 07

These are my personal musings. These are not in any way meant to be trading advise. To view the full chart, right click and open in a new window.

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

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

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

The market can continue up.

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

The market can move sideways.

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

The market can move down.

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

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

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

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

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

Plan your trades and trade happy.

Nifty for 18 May 07

These are my personal musings. These are not in any way meant to be trading advise. To view the full chart, right click and open in a new window.

The first tick of the morning closed the gap which was created on Thursday 17 May, technically. However, I would not give much cognisance to the first tick, as it could be just a small trade registered. Two short term zones marked in grey are those showing the gaps. In the tussle between bulls and bears, normally the market respects such gaps. That is because the bulls do not want the bears to cover their short positions which have been created prior to the gaps. The short covering then adds impetus to the bull phase, allowing bulls to exit at higher levels.

The Nifty is just a whisker away from a historic high. Normally, we do not expect the weekend to be such a non-event day, with flat trading.

When volatility tightens, we could expect some explosive move either way. I could be wrong, but the probability of an up move still remains. Till then … Plan your trades and trade happy.

Nifty for 17 May 07

These are my personal musings. These are not in any way meant to be trading advise. To view the full chart, right click and open in a new window.

Today’s move with a rising window would not have allowed traders to enter at the open. This type of market move normally frustrates traders and then they jump in at any price. They then end up holding stocks at high prices.

The Nifty future has made a historic high today. Whereas, the underlying Nifty index has yet to make a new high. This suggests that some element of excessive speculation is slowly entering the market. The future is now trading almost at par with the Index.

Under normal circumstances, this always rings a warning bell. We are fast approaching our time target of 22 May.

Plan your trades and trade happy.

Nifty for 16 May 07

These are my personal musings. These are not in any way meant to be trading advise. To view the full chart, right click and open in a new window.

On 15 May, it was suggested “if the gap is not closed, then we may see a runaway gap, which could reinforce the bullish sentiment.” The market did open with a gap, but we did not really see a runaway gap. In any case, the bullish sentiment has reflected well in today’s sharp move up.

Today, the short term trend has changed as up. From the way the market is behaving, it is my expectation, that this up move may be short lived. In fact, as stated earlier, we have a cycle in time on 22 May, which could be a short term top. If the market behaves itself, then we may see the trend continue up till 22 May.

Plan the trade and trade happy.

Nifty for 15 May 07

These are my personal musings. These are not in any way meant to be trading advise. To view the full chart, right click and open in a new window.

On Friday, 11 May, it was suggested to “wait for a break above 4095, and then buy on a dip, with an appropriate stop.” Again on Monday, 14 May, it was suggested “the gap of today may be tried to be closed. This down move may be utilised to buy.”

Today has been a non event day … almost. Except that yesterday’s gap has not been closed. Therefore, we could be alert tomorrow for such an event. However, if the gap is not closed, then we may see a runaway gap, which could reinforce the bullish sentiment.

The candles are still small. The short term trend has still not changed as up, but has not confirmed the down either. The likelihood of it changing to up is highly probable.

Plan the trade and trade happy.

Nifty for 14 May 07

These are my personal musings. These are not in any way meant to be trading advise. To view the full chart, right click and open in a new window.

On Friday, 11 May, it was suggested to “wait for a break above 4095, and then buy on a dip, with an appropriate stop.”

The break above 4095 has happened, and we could use any correction to buy in.

Further, the low of 3981 seems to have taken support on a tested trend, which validates it, further. Therefore, we may label this bottom as a significant one. The gap up opening may not have allowed traders to buy in, but these are the hazards to real live trading.

In any case, the gap of today may be tried to be closed. This down move may be utilised to buy.

The candles are still small. This tells us that even after such a positive opening for the week, the market continues to be uncertain about the direction. The short term trend may change as up from today, provided the bottom of 3981 is not violated. The likelihood of that happening is highly probable.

Plan the trade and trade happy.

Nifty for 11 May 07

These are my personal musings. These are not in any way meant to be trading advise. To view the full chart, right click and open in a new window.

As of Friday, 11 May, we can term the short term trend to be down. This is strictly from a technical point of view. However, if we separate the black and white from the grey, the freak tick on the Nifty at the opening registered the low, without actually having really traded through. This suggests computerised basket selling.

I already hear whispers of market manipulation and conspiracy. I would suggest readers to forget those conspiracy theories, as the market is not conspiring against each of you as individuals. It is just a matter of some fund manager or managers assuming that the market is going to trade lower.

There is a popular saying in the West, “sell in May and go away”. As we see the market getting more correlated with world markets, we also notice that we have had major corrections in May 2004, March 2005, May 2006 and now possibly May 2007. Now that the earnings season is over, it is pragmatic to expect some profit bookings.

From a trading point of view, where are we in the trend? The long term is up, the intermediate is up, and the short term is down.

In any case, the low of Monday 30 April (4028), which was suggested as a stop, would have been triggered. We see the Nifty taking support on another zone with the low at 3981. For the adventurous among us, who are tempted to buy, the low of 3981 may be used as a stop.

However, for the conservative among us, who wish to follow our bullish set up example (see link on the right), it would be advisable to wait for a break above 4095, and then buy on a dip, with an appropriate stop.

The candles are still small and the shadows are large. This tells us that even though the trading range for the day is large enough, the market continues to be uncertain about the direction.

And as I am fond of repeating … now is the actual time to Plan the trade and trade happy.