Nifty for 12 Jan 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.

Friday’s gap opening on the Nifty, suggests a huge bullish sentiment. In such cases, normally, there is an element of profit booking, as players who have bought at lower levels exit.

After the churn of the last month or so, some levels have become firmly established, which can be used as benchmarks to decide whether a trader would like to remain bought, or to book profit.

The market sentiment continues hugely in positive territory. On Friday, the volumes recorded are lower than Thursday, but still good.

The Bank Nifty must have surprised traders even on Friday, with the speed at which it has shot through the resistance levels. The CNXIT went through its resistances on Thursday itself.

On Thursday, I had illustrated a bullish set up and how to trade it. When the occasion arises, I will also illustrate a bearish set up. Till we see a bearish set up, the Nifty could be treated as bullish and traders could remain bought

Nifty for 11 Jan 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.

Is the Nifty my slave? No ... only subject to common sense, and a little maths.

The condition suggested yesterday that the Nifty goes above 3890, and does not violate today’s low of 3840 was fulfilled today. So short term speculators could be long.

The market sentiment has turned up in positive territory. Today, volumes recorded are solid, which will give confidence to bulls.

Volatility is a part of this trade. As I am fond of reminding readers, allow the Index to confirm the direction and then enter the trade.

The Bank Nifty must have surprised traders, while the CNXIT was expected to show strength.

The Nifty seems to confirm the bottom, and long positions could be the order of the day.

I have received some queries as to how to decide the direction. Here is a simple method. When we anticipate a change in direction for the positive, look for a rising top and bottom formation. Similarly, if we expect a downward change, look for a falling top and bottom formation. This simple thumb rule allows traders to enter long or short trades with greater confidence, and eliminates false triggers of stop losses.

Here is a chart to illustrate what I mean.

This thumb rule would remain true in whatever time frame we trade, whether intraday, daily or weekly.

And the key always is … Trade happy.

Nifty for 10 Jan 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.

Speculators could take a risk and go long tomorrow. The only condition is that the Nifty goes above 3890, and does not violate today’s low of 3840.

The market sentiment surprisingly is still positive, but just barely. Today, volumes recorded are pretty high, which suggests that a bottom may be forming.

With the results season on, the volatility will continue. As suggested earlier, allow the Index to confirm the bottom and then only go long.

The Bank Nifty as well as the CNXIT are still showing weakness. But the CNXIT futures show some buying interest. If we see a turnaround in the CNXIT, the sentiment may well turn positive.

Therefore, as suggested earlier, allow the Nifty to confirm the bottom, and then think of long positions.

Nifty for 09 Jan 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 stop of yesterday’s low has been triggered, and we could be out of our long positions. Now the significant barrier would be the 3960 high recorded yesterday.

The market sentiment still positive, suggesting that the bulls are going out from the Index components into the second rung stocks. This still suggests that weak bulls are being forced out of their long positions.

The volatility will continue, it goes without saying. The market may have bottomed today. However, we would not be good traders if we jump into long positions immediately. Allow the Index to confirm the bottom and then only go long.

The Bank Nifty as well as the CNXIT showed weakness. But more significantly, we see that the volumes are increasing when the Index Futures are making new lows. Suggesting that there still is buying interest.

Therefore, as suggested earlier, we could see the trend for the Nifty could resume upwards from tomorrow. Allow the Nifty to confirm the bottom, and then think of long positions.

Trade happy.

Nifty for 08 Jan 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.

A gap down opening is an ominous sign for the Nifty. If I was trading this market, I would keep yesterday’s low as my stop, if the Nifty closes below.

Yet, why is it that the market sentiment still remains buoyant? Very surprising? Not really. It all boils down to trading.

The results season is on and this volatility can be attributed to pure speculation. I had expected this phase of the market to bottom on Tuesday, and it still is possible. However, I would tend to draw my trading plan to limit losses to a manageable level.

The Bank Nifty had made a bullish formation on the intraday charts on Friday. Today that level has been broken, which tends to allow for some more weakness. The CNXIT did witness weakness, which mainly contributed to the weakness in the Nifty.

Therefore, as suggested earlier, we could see the trend for the Nifty could resume upwards from Tuesday. However, due to the volatility and news based trading, I could suggest very tight stop losses depending on the time frame of the trades.

Trade happy.

Nifty for 05 Jan 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.

Astute traders will notice that there was a small gap open on 27 December 06 on the Nifty. I have marked out the rising gap on the chart in blue. That gap is now being tested in the congestion range, also marked out on the chart.

Which suggests that the strong hands do not want the gap to be filled, and want the weaker bulls to enter the market at higher levels. Therefore, it is logical to expect that the market could move higher.

The Bank Nifty has made a bullish formation on the intraday charts, and we could see some strength coming back into this Index. On the other hand, the CNXIT could witness some more weakness, purely due to profit booking, and not due to any bear strength.

Therefore, as suggested earlier, we could see the trend for the Nifty could resume upwards from Tuesday.

Trade happy.