Nifty for 02 Feb 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 was suggested on Thursday, 1 Feb, that we could have a short term bottom tomorrow, i.e. on Friday, 2 Feb. However, the market refused to allow bulls who were waiting on the sidelines to enter long, and opened with a large gap. As is usual, this type of excessive bullish sentiment again brings the bulls to the profit table. And also spurs bears to short.

As of now, the bulls are still on the offensive, so I expect any selling to be absorbed quickly. The blue zone in the picture between 4130 and 4150 becomes important for the short term health of the market.

Taking a longer term view, the 4030 to 4050 range in green has made a solid base. It therefore seems unlikely, that this base is going to be violated in a hurry. This could make the bears an extinct species in the Indian markets.

We could still conclude that the longer term is intact upwards. The short term has been up also.

What do I feel, going ahead? I still feel bullish. And could use dips to buy. We could have an intermediate term top next week, maybe on Friday, 9 Feb, which is also the weekend. Till then, trade happy.

Nifty for 01 Feb 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 was suggested on Wednesday, 31 Jan, that we could have a short term bottom tomorrow. i.e. on Thursday 1 February. Normally it does happen that when things look gloomy, we have a sharp reaction. But this type of sharp reaction in good enough to unnerve any trader.

If we look at the chart from three time frames, we can still conclude that the longer term is intact upwards. The short term is still sideways. And within this, we see the extreme short term trend is violently volatile.

I repeat what I mentioned on Wednesday, “Unfortunately, a drop of a hundred odd points on the Index is good enough to give the jitters to any trader.” One day bullish, one day bearish, traders have to take these things in their strides. And the only way we can achieve this is to keep the trading time frame in mind, and keep rigid stops.

What do I feel, going ahead? I still feel bullish. We could have a intermediate term top next week, maybe on Friday, 9 Feb, which is also the weekend. Till then, trade happy.

Nifty for 31 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.

I would tend to attribute today’s knee jerk to the news on a major Steel Company regarding its acquisition. Obviously, some learned MBA in some fund suddenly woke up, and found that the particular company in question was a bad buy, and started selling in a hurry.

It was suggested on Monday that the Nifty was looking like making an intermediate top. The major tradable indices, namely the Bank Nifty and the CNXIT are looking weak as of now. Therefore, it may be assumed that we could have a short term bottom tomorrow. i.e. on Thursday 1 February.

If we look at the chart, we see it from three time frames. The longer term is still intact upwards. The short term is sideways. And within this, we see the extreme short term trend is down. Please choose your time frame for trading, and decide where you want to position yourself, in these hugely volatile news based times.

Unfortunately, a drop of a hundred odd points on the Index is good enough to give the jitters to any trader. Further, the short term movement has given a bearish setup, so we could see some more bearish times ahead.

Trade happy.

Nifty for 29 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.

With a holiday on Tuesday, 30 January, it was expected that the market would be a little skittish. And it was. The day’s direction was sideways and tending towards weak. Some kind of mild profit booking also emerged with very low volumes. Even on a mildly weak day, we do see some buying interest, as the advancing volumes outstripped the declining volumes, even though the advance decline ratio was adverse.

The Nifty is looking like a bit toppish. It would be better for extreme short term traders to exercise restraint, rather than go long at tops. We always have the mild reaction to the top. Further, the Bank Nifty is showing weakness, and could move down quite a bit. Which could contribute to weakness in the Nifty too. The CNXIT also could contribute a bit of weakness, if the sentiment reverses.

So … watch out.

Trade happy.

Nifty for 25 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.

Thursday was expected to be a volatile day, and as can be expected, the last minute running of stops was enacted. This was due to two factors. One is the derivatives expiration and the second the long weekend. And we can be sure that the derivative expiration had a greater weight in the last minute shoot in the Index.

This confirms our analysis of 18 January 2007, where we had expected a higher closing for the Nifty for this settlement. Here is the link. Click Here.

Now that the volatility of the derivatives expiry is over, we can only look forward to knee jerk reactions due to some specific results announcements. On the whole, the trend remains up.

Trade happy.