Nifty for 01 Feb 08

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

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

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

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

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

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

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

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

Nifty for 24 Jan 08

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

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

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

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

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

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

Trade happy after planning your trade.

Nifty for 23 Jan 08

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

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

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

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

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

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

Trade happy after planning your trade.

Nifty for 21 Jan 08

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

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

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

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

I can only repeat this statement.

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

Trade happy after planning your trade.

Nifty for 18 Jan 08

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

As 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

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

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

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

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

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

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

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

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.