Nifty for 08 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.

Well. The first cluster of supports is broken. It should tell us that the market is in no hurry to be bullish.

The last hour rush up may again be attributed to week-end short covering.

At this stage, the previous support ~4996 may also be broken. Therefore, we should be careful of our long positions. In fact on the intraday chart, we see a technical pattern called an island reversal. Purists would argue that this is not a classic island reversal, and it should happen only at market peaks. So … what the hell? It is not a classic pattern, but it is a pattern nonetheless.

The market has peaked for the short term at around ~5550 levels. I would advise bullish positions only after that high is violated. Till then, we could even short the market on rises, keeping the previous cluster of ~5400 as a stop.

The only silver lining in the dark clouds is the IT sector, which may just have bottomed.

Trade happy after planning your trade.

Nifty for 07 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.

In spite of the huge down day today, the technical position still has not changed.

The blue circled supports still stand good.

Short term traders could well stay out, while longer term traders could monitor the previous cluster of supports around ~5100 for signs of strength or weakness. If these clusters of supports are broken, then we may well see the index testing the previous bottom around the 5000 levels. If that too does not hold, then the next bottom of ~4450 may be tested.

That is a large number of points from here, so it is suggested to avoid the temptation of bottom fishing. Please wait for the emergence of a short term bullish pattern to buy.

It has stood us well over time, so let us not tempt the demons of capital loss.

Trade happy after planning your trade.

Nifty for 06 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.

We seem to be back to square one. A huge gap up one day and a larger gap down the next. The extra bullish scenario which we talked about just yesterday has been nullified.

The other blue circled supports still stand good. It is some measure of the volatility, where online trading brokers do not allow intraday trading. In fact, maybe because of that very reason, the market is unable to seek its true price discovery.

Short term traders could well stay out, while longer term traders could monitor the previous cluster of supports around ~5100 for signs of strength or weakness.

Trade happy after planning your trade.

Nifty for 05 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.

Today we saw a nothing day. But technically speaking, the market has indeed stayed above the danger levels on a short term basis. We could continue with the levels mentioned for yesterday.

Short term traders could now do well to raise their stop to the 5385 level to lock in loss of capital. Longer term traders could wait for a close below 5385.

If in the next few days, this gap is left open, we could be seeing a short term runaway gap, which signals an extremely bullish scenario for the market. Further, if the Nifty moves up higher than 5546, that too would be a bullish signal.

Nifty for 04 Feb 2008

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 an ideal buying opportunity, both for short term and longer term traders. The market behaved, giving us a buy signal, as was suggested on Friday.

The market gapped through the previous swing tops, and then corrected enough to take support at the same precise level.

Short term traders could now do well to raise their stop to the 5385 level to lock in loss of capital. Longer term traders could wait for a close below 5385.

If in the next few days, this gap is left open, we could be seeing a short term runaway gap, which signals an extremely bullish scenario for the market.

Trade happy after planning your trade.