Nifty for 29 May 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 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.