Nifty for 15 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.

The market thankfully respected our analysis of yesterday, 14 Feb 07.

The short term bottom for yesterday, 14 Feb, becomes very significant. For two reasons. One is that a previous gap was tested and not penetrated, and the second it that today, 15 Feb 07, the market opened with a significant gap.

From the way the Index is behaving, we could see a new high in a few days to come. In fact, except for a small hiccup towards the end of February, we could see the market remaining strong right till the first week of March.

Please consider trading with caution during the last week of February, due to the expiry of the derivatives settlement and the news flows about the budget.

Nifty for 14 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.

Am I wrong in my analysis of yesterday? I do not think so.

I still feel from the charts, that this fall of the last few days has been a correction. We could still see the short term bottom for today, 14 Feb.

From the chart of the Nifty, we can see that the Nifty has tried to close a large gap, which was in the middle of last month. The earlier support level, which should have been a resistance now, has also been violated on its move up. Further, the candle pattern on both … the BSE as well as the NSE has long lower shadows, which is a suggestion of a significant bottom.

The Bank Index is contributing to the weakness in the Index in a major way. It can be due to the news from RBI. Apart from that, no major weakness is seen.

Nifty for 13 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.

As was suggested yesterday, on 12 February, we are in a correction. It was also anticipated that the correction could last for a week or so. But the speed at which the correction has moved, it must have surprised many market players. I have no qualms in admitting that it has surprised me. Is the correction over? Yes, it does seem so, from the position on the chart.

It was also suggested, that we could see an important support level being tested today. And it has been. Thus, the 4000 level on the Nifty becomes a very important level. If that level breaks, then we could assume that the bear run has started.

Further, on the hourly chart, a higher top higher bottom pattern has emerged which lead me to believe that the correction could be over.

We had also asked a question yesterday – “Does it mean that the Great Bull Run of the Indian stock market is over?” and had answered “It does not seem so. Not as yet.” The fact remains that the next six weeks are going to be news driven, and therefore, volatility is going to be very high.

And as suggested again and again, when volatility is increasing, it is imperative that trading should not be overleveraged and to remain hedged at the same time.

Let wisdom prevail.

Nifty for 12 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.

When analysing the market, I hate to say “I told you so”, but from the messages I received today, it does seem that traders are hoping against hope that their investments will turn out positive. When a trading plan changes from hope to prayer, traders should know that they are in the wrong business, and trading is not for them.

However, if they are in the business of trading, then they should be hearing what the market is telling them, rather than try and beat the market. And the market is telling us that I am weak. It also tells us that such a sharp fall will be met with periodic profit booking of bears, which could push the market back up slightly. It also tells us, that bulls will be euphoric to see such a rise, and try and jump on the bandwagon once again, only to see their hopes dashed to the ground. Because, when we see a rise after such a drastic fall, bigger traders come out and tend to sell, which tends to depress prices further.

Does it mean that the Great Bull Run of the Indian stock market is over?

It does not seem so. Not as yet. It does seem that this fall is the start of a correction, and not the start of a bear market. It also seems that this correction could last till 20 to 23 Feb 07. Which brings us right into the time when the Railway Budget would be announced, and heightened speculation will increase volatility.

Therefore, at a time like this, when volatility is increasing, it also becomes imperative that trading should not be overleveraged and hedged at the same time.

Let wisdom prevail.

Nifty for 09 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.

Regular readers would have noticed my analysis of
(Link) 2 Feb 2007 and (Link) 1 Feb 2007 where it was suggested that we may see an intermediate term top today, on 9 February 2007. Unfortunately, from the messages I have got on my messenger, it does seem that memories of traders are really short.

Whether it is indeed a top, remains to be seen. What is important is that we should trade it according to our plan.

From the way the Nifty collapsed today (9 Feb) in the initial hours, it does seem that the intermediate top has set in. From a trading perspective, I would remain alert if the short term top of 4239 is violated on the upside. Till then, we could assume the short term trend to remain down. We may also assume that any rises from here on could be met with selling, which could depress the sentiment further.

Nifty for 07 Feb 07

As has been labelled on the chart … how boring. Just another day, when a new high has been made.

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’s i.e. 6 February, support has held, thus making the 4170 level as an important short term support level.

The supply line overhead is like a nagging headache which refuses to go away. Traders could be advised here to keep a level head, stay bought and not over-leverage themselves with expectations of runaway profits.

On days like this, I can only repeat my mantra like an old broken record … Keep your profit booking stops according to your comfort levels.

Nifty for 06 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.

Also check yesterday's, i.e. 5 February chart. Click here.

There is not much change from the technical position from yesterday. We do see a consolidation today, 6 February. As they say, one picture is worth a thousand words, please check the chart where I have labelled several short term, and medium term levels, which could be useful in determining the mood of the moment. The market is looking toppish for the last two weeks or so, and when there is a sharp downside reaction, people will be very tempted to buy. I could suggest readers not to be led into such temptation.

Today’s chart shows that a short term support was tested and held. The supply line overhead is still not letting the market move freely upwards.

Keep your profit booking stops according to your comfort levels.

Nifty for 05 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.

From the focus point of the December high, we see many crucial observations. Firstly, we see that the 4060 zone saw much resistance earlier, and then offering support later. Also please check the chart on Friday 2 Feb.

It becomes unnecessary to repeat what I have been saying all of last week. Stay bought, till we see signs of weakness.

Today’s chart shows us that a short term support was tested and held. It also shows that we are nearing a supply line around the 4250 levels, which could be a resistance. As a flashback, may I remind readers that we had projected the expected level of 4170 much earlier? This projection was expected to provide resistance in the form of profit booking. However, we have seen that the market has brushed aside that selling level. Now we also see support coming in at that level.

At these trading times, it becomes very important to keep locking in profits. The reason being, we do not know when the rally will end, and will kick ourselves for having sold out too soon. Trading with hindsight is a great sensation, which we do not have, as we cannot read tomorrow’s newspaper today.

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.

Republic Day Greetings

Nifty for 24 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.

Wednesday was expected to be a weak day, but the sideways movement continued. As can be seen from the chart, in the last few days, we have seen gap openings which are contributing to the fear factor among short term traders. Intermediate and longer term traders would be insulated from these gyrations.

The Index was looking to make a rough head and shoulders pattern till Tuesday. Today, it has not yet confirmed that pattern. If it does not convincingly break down, the trend can actually reverse to up.

The short term trend is giving mixed signals, but the intermediate term and long term trends are still up. In fact, today i.e. Wednesday, the short term trend seems to be indicating to turn up. The short term bullish pattern which could confirm the bottoming of the Index may occur on Thursday.

The main reason for the short term downtrend was the Bank Nifty, which also seems to have turned upward. Complacency is not an option during trading, and this volatility can be attributed to the derivatives expiry on Thursday.

Trade happy.

Nifty for 23 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.

As suggested, Tuesday was another weak day.

The Nifty seems to be making a rough head and shoulders pattern, which could allow it to correct to 3970. It is a rough estimate. That would mean that the previous tops may be penetrated mildly. That could set off some triggers for bulls, who have been holding long positions, with 4030 as a stop.

The short term trend is assumed to be continuing down, and the intermediate term and long term trends are still up. Sharp dips may still be used to enter buy positions. However, please remember to allow a bullish pattern to confirm a bottoming of the Index.

The main culprit for this short term downtrend is the Bank Nifty, which is showing greater weakness than other Indices. As soon as we see support on this Index, we could see some other sector being distributed. This sector churn could allow the weakness to continue for a few more days.

Trade happy.

Nifty for 22 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.

Monday was another rather boring day for traders looking for excitement.

Do we think the correction is over? Well, I still do not think so. I think that the Nifty could correct down to 4020.

The short term trend was assumed down, and the intermediate term and long term trends are still up. Dips may still be used to enter buy positions.

Trade happy.

Nifty for 19 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.

It is really a case of so near yet so far. The Nifty stopped just 30 odd points from a projection. Normally, when we see profit booking at such a high level, and then see a lower low than the past few days, we could assume that the short term trend has turned down.

It was expected that the Nifty would start correcting on Wednesday or Thursday. It seems a day later than what we had expected. This suggests that the long term trend is still intact, and this can only be labelled as a correction. Till we see any evidence to the contrary.

On Friday, the volatility in the Nifty could have scared even the die hard traders.

The short term trend is assumed down, and the intermediate term and long term trends are still up. Dips may still be used to enter buy positions.

Trade happy.

On 11 January, (Click here!) I had shown a chart with a bullish set up.

Today I am showing a chart with a bearish set up.

This week, we had been expecting a short term decline, and here is how we could have remained alert for such an occurrence. As has been suggested earlier, look for the evidence, on any time frame, be it hourly, daily weekly or monthly.

Nifty for 18 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 was watching the Nifty crawl slowly to 4140 today and on an impulse checked my previous projections again. These projections I had posted on my Blog on 4, 5 and 6 December 2006. A lot of water has passed under the stock market bridge since then, almost six weeks. For those interested, check the following link. http://dusant.blogspot.com/search?q=target

It was expected that the Nifty would start correcting on Wednesday or Thursday. It does seem that our expectations have not been met. Frankly, it is unbelievable that such an occurrence is taking place. I have started getting messages asking me when we can expect a correction. This is a dangerous sign for fresh bulls. Bulls who want to enter the market will lose their patience and then enter at higher levels.

On Thursday too, the Nifty moved within a tight range throughout the day. The only difference being that there was a bull shock today, when the Index plunged sharply today. In my very humble opinion, this sharp fall has triggered quite a few stops of bulls, and now these bulls will be waiting to re-enter the market. Which could … just could push prices up higher. In that case, we could have a higher closing on the Nifty Future, this settlement.

The Nifty up move was again capped at the rising trendline. If this trendline is violated convincingly, we could have a massive and quick bull run.

The mood is still bullish. So it is suggested to stay bought. With tight stops, of course.

Trade happy.

Nifty for 17 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.

Wednesday was almost like Tuesday. The Nifty moved within a tight range throughout the day. Consolidation seems to be continuing.

The Nifty move which is pushing at the rising trendline seems to have failed, at least for today.

For Thursday, short term traders could place their profit booking levels at the 4060 levels. Intermediate term traders could watch the 4045 levels, and longer term traders could concentrate on 4032. If by any chance, we see a crash, then a good level to buy the Nifty would be 3935.

The mood is still bullish. So it is suggested to stay bought but keep tight stops.

Trade happy.

Nifty for 16 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.

Tuesday also opened with a gap which reflects the excessive bullish sentiment. However, the gap was closed almost immediately, and the Nifty meandered within a tight range throughout the day. From the looks of it, today’s movement seems like consolidation, like the winding up of a spring.

On Monday, we had shown a chart, which showed the Nifty pushing at the rising trendline. That trendline has again capped the upside movement.

For Wednesday, short term traders could place their profit booking levels at the 4060 levels. Intermediate term traders could watch the 4040 levels, and longer term traders could concentrate on 3970 to 3980. If by any chance, we see a crash, then a good level to buy the Nifty would be 3930.

The mood is still bullish. So it is suggested to stay bought.

Trade happy.

Nifty for 15 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.

Monday’s gap opening on the Nifty, suggests the bullish sentiment is continuing. As was suggested on Friday, we did see players booking profit today.

On the Nifty chart, we see an up-sloping blue dashed trendline, which is inhibiting the free movement of the Nifty. It has had several touch points where supply has been witnessed. Therefore, it is quite possible that we may see some correction. The earlier tops, around the 4030 levels are going to lend solid support.

Bears are probably going to test this level and penetrate it mildly. All I can suggest at this point is to stay bullish. This run may last for another two days, and we may see some short term resistance coming in on Wednesday 17th or Thursday 18th.

I hope readers have noted Friday, the 12th January, chart as a benchmark for staying bought or deciding levels where profits could be booked.

The market sentiment continues in positive territory. On Monday, the volumes recorded are lower than Friday, but are still healthy.

As suggested on Friday, the Bank Nifty did see profit booking at higher levels.

The CNXIT also opened with a gap and witnessed profit booking.

The mood is still bullish. So it is suggested to stay bought.

Trade happy.

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.

Nifty for 04 Jan 06

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 Nifty has finally made a new historical high, as anticipated. It is natural to expect that we witness profit booking, as was warned yesterday. This would allow bulls to exit prematurely, and allow the stronger hands to pick up stock at lower levels.

The Bank Nifty continues trading weak, and the CNXIT also witnessed profit booking, again as expected. As a result, we saw weakness in the Nifty also. It could have been a good time to lock in profits at this stage.

We could continue to see some more weakness during this weekend, as most players like to keep light positions over the weekend. The trend could resume upwards from Tuesday.

Trade happy.

Nifty for 03 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 minor hitch which was warned about yesterday did happen rather like a shock for traders. This sharp fall would have triggered quite a few stops of extreme short term bulls, leaving them stranded out of the market. The short term rising supply line continues to coincide with the historical rising supply line.

The Nifty seems to be preparing for another assault towards a new historical high. I would continue to remain long, rather than try and pick a top.

The Bank Nifty is trading sideways to weak, but the CNXIT is showing even more strength. It is therefore expected that we may see some profit booking come into this sector. The chart displays the various levels where mental stops could be placed for trading, depending on the trading time frame.

It may be suggested to remain long if the close is above 3995. Tomorrow, the Nifty may see resistance between 4046 and 4055.

Trade happy.

Nifty for 02 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 Nifty seems relentless in its pursuit of making a new top. On the charts I see a minor hitch. The short term rising supply line is now almost coinciding with a historical rising supply line.

In such a scenario, I would tend to remain long, rather than try and pick a top.

The Bank Nifty is trading weak, but the CNXIT is more than compensating for it. The charts display the various levels where mental stops could be placed for trading, depending on the trading time frame.

Trade happy.

Nifty for 22 Dec 06

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 volatility is increasing. The Nifty has just encountered another resistance overhead. Normally, on the weekend, positions are closed, so it is quite probable that bears could have exited in the last half hour, giving rise to the Nifty.

I had expected the downside to continue on Friday too, but that did not happen.

I am still of the opinion that we should see one more round of selling. 3770 would be a good level for us to gauge the short term trend. A break on the downside would be a good indicator that the short term trend is indeed down.

Trade happy.

Nifty for 21 Dec 06

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.

Nothing seems to have changed since yesterday. Except for the volatility. The Nifty is struggling with the resistances overhead. At the same time, it is also receiving good support.

There should have been enough strength today, which should have allowed the Nifty to break its shackles. However, it has failed.

Therefore, please expect a downside. This downside could again retest the 3650 levels, and in all probability, it could also be penetrated. This could turn out to be a classic bear trap.

Trade happy.

Nifty for 20 Dec 06

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 of today, it already seems that the bad news of yesterday has been discounted, and the market is readying to make another surge upward.

On the chart, I have marked out the few operative congestion zones established during the last few days. These levels are now going to play a major role in the market movement.

If I am asked to stick my neck out, I would think that the market has made a corrective bottom here, and the trend should resume towards its original direction, that is upwards.

This is assumed by the continuous bounces, not only on the Nifty, but also on the CNXIT and Bank Nifty Futures.

All said and done, in volatile times, it is always advisable to hedge positions rather than being naked long. But those among us who are adventurous, could try their hand at bottom fishing.

Trade happy.

Nifty for 19 Dec 06

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 suggested yesterday, we could see some blood letting on the bourses. And it seems to have happened. The fundamental reason could be the news that Iran wants to shift its trading and reserves to the Euro, instead of the Dollar.

In such a scenario, hedge funds would want to withdraw from uncertainties and speculate on the currencies. This could be a reason why such a sudden fall has happened.

Normally, when such an event happens, the market usually recovers after a gap of a week to a fortnight.

However, we are concerned only about the technicals. And the technicals suggest that the short term trend is down in the longer term uptrend. The lower tops and bottoms do suggest that.

The 3970 zone was not tested at all, as a result of which, we saw a sharp downside. Neither did the 3900 and 3850 levels provide support. So we could assume the trend to be down. In such a scenario, any upsides could be capped by additional selling at higher levels.

A trading plan would be extremely useful at this juncture.

Trade happy.

Nifty for 18 Dec 06

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 Nifty is at a very interesting juncture. The last move up does seem like a correction to the previous fall.

It therefore becomes imperative that we approach this market with a strict view without any scope for complacency. I have marked out several zones on the chart which could be used as placing stops or buying zones, depending on the traders’ time horizon.

The 3970 zone could be tested, and then we may see some downside. If the 3900 and 3850 levels provide support, then we can assume that the trend will continue up. Or else, we could see some bloodshed on the bourses.

Trade happy.

Nifty for 14 Dec 06

The chart says it all.

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.

Watch out ... we may see a few hiccups tomorrow.

But it is my anticipation, that these hiccups could turn into non events.

Nifty for 13 Dec 06

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 does seem that the Nifty has paused here.

The Bank Nifty, which did the most damage in the last two days, has also staged a resurgence. Further, on the chart, I have also included the 5 minutes chart in close-up. It does show a steady upward direction, with higher tops and bottoms. Therefore, in all probability, we have seen a most significant bottom yesterday.

The volumes on the Nifty Future also suggest the same.

On the chart, we see the several resistance zones which the Nifty needs to overcome, so the going is going to be tough. But, as suggested, the trend should continue upwards.

For investors, it could be suggested to take positions in market leaders, and Index components, as they would lead the sentiment. Look as the second rung stocks later.

For speculators, it could be suggested to hedge long positions as the Index may still give a few heart beat skips.

Trade happy.

Nifty for 12 Dec 06

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.

At last an exciting day. There was enough volatility to shock both the bulls as well as the bears. The direction, nonetheless, was downwards.

A trader could be short on the breach of the earlier support zone of 3800. Now the earlier support zones are all going to turn into resistances.

There are two alternatives which present themselves to us. One is that the Nifty has bottomed today at the 3660 level, and we could see a slow retracement upwards. Please appreciate that any rise will be met with more selling, and the going is expected to take a huge effort from the bulls.

The second is that we could see the Nifty meeting resistance at the 3800 zone and then breach today’s bottom.

In that case, this sharp downside correction could terminate at the 3550 level, from which the bull run could resume.

Please plan your trade according to it.

Nifty for 11 Dec 06

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 bottle did break, finally.

Watching from a distance, it does seem that the RBI had something to do with it. The banks seem to have taken a major hit. And that seems to have triggered the negative sentiment.

My stop of 3980 has been triggered, and I would be out.

In most cases, such a sharp fall does have a knee jerk reaction upwards. The bottom fishers would be out, seeking to push the index up. The volumes on the Nifty future are almost close to the May and June bottoms.

Whenever we have seen such high volumes on the Nifty Future, we have always seen a convincing bottom.

How do we trade this? Simple … wait for 3872 to be violated on the upside, wait patiently for a downside move, and then go long, after a higher bottom has been established on the hourly chart.

The thumb rule levels are marked out on the chart.

Nifty for 06 Dec 06

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

A new high looks like becoming a routine.

However, with every new high, profit booking is rearing its head. As a result, we are not seeing any sustained follow through buying. Let the profit booking happen.

For the longer term player, it could be the best possible thing to happen.

The Bank Nifty seems to now have given up its support, and may witness some more weakness. As mentioned earlier, this sector churn could lead to some volatility in the Index.

If we just step back, and see the chart, we do not notice any major weakness in the index, as of now.

The technicals still suggest that we could expect a short term target of 4120. The fib extension target posted earlier still holds at 4170. I would raise my “mental” stop to 3980, from where the Nifty bounced strongly.

Nifty for 05 Dec 06

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.
How boring. A new high has again been achieved, once again.
It really is strange, how traders have doubts in their minds when they are holding positions. There is no evidence of any weakness and yet people ask me for my opinion on the market.
The Bank Nifty seems to have taken support, and about to bounce back. As a result, some sector churn could follow, leading to some volatility in the Index.
The technicals still suggest that we could expect a short term target of 4120. The fib extension target posted earlier still holds at 4170.

Nifty for 04 Dec 06

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 Bull Run still remains intact. A new high has again been achieved.
A convincing support now lies at the support zone marked out on the chart. The Nifty still has maintained its upward trend.
On the other hand, sector indices like the Bank Nifty and the CNX IT show some signs of weakness. Leading us to believe that there could be a minor correction in the Nifty. The correction could be enough to allow bulls to believe that the bull run is over. In that case, the support level of 3970 will be tested.
If I was trading this market, I would maintain a stop of around 3960. If I was to re-enter this market, I would look at 3970, as an entry level, with a strict stop. In any case, the technicals still suggest that we could expect a target of 4120.

Nifty for 01 Dec 06

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 Bull Run remains intact. A new high has been maintained.

A convincing support now lies at the support zone marked out on the chart. The breakout was tested on the resistance zone and has successfully maintained its upward move.

This break also has more significance, because it has occurred on a weekend. Normally, on weekends, traders close their positions. This suggests that bears are still on the back foot, and this move is re-enforcing the might of the bulls.
According to the short term triangle break, we can expect a target of 4120.

Let us see how the next week pans out.

Nifty for 30 Nov 06

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 expected, bears did take a beating, but exactly at the eleventh hour of the expiration.
I have raised my mental stop for the Nifty at 3918, which level saw support. I expect the Nifty to test 3974 level mildly, and then react downward again. 3980 could be a good level where we may see short term resistance.
This is not a suggestion to short at 3980, only a suggestion to monitor that level. If that level is achieved, then a higher top would have been made, and would allow the bull run to be intact.

Nifty for 28 Nov 06

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 warned yesterday, we did see some weakness in the index. Unfortunately, many people could not have taken advantage of it, because of the huge 30 point gap down open. At such a stage, a trader is always in two minds, whether or not the weakness will sustain or not.

In any case, the weakness could persist just for a couple of days, and I find support levels for the Nifty at 3913, 3880 and 3855. These levels would be monitored on a daily basis, as they are dynamic, and change with additional market information.

I would change my bullish view only if the previous bottom of 3794 is violated convincingly. Therefore, bears among us could please exercise caution.

Those among us who have exit long positions, could re-enter at lower levels, once any of these support zones exhibit a convincing bounce.

Nifty for 27 Nov 06

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 has been quite a while since my last post, well, a shade over two weeks. The Nifty has not done anything which was not expected. Still I wonder how many people have made money in this last fortnight.
In a capsule, the previous historic high has been tested and violated. The expected target was achieved, and has been broken. The last deep correction was a shakeout of the bulls, where the previous top was retested.
Since then, all the patterns are still suggesting of good times to come for the bulls. I have yet to see a mad euphoric blow off rise on the index. This is good for the bull. He can still take advantage of the further expected rise.
We have still not seen a meaningful correction for the last rise, in terms of price. Please keep in mind that a correction does not necessarily need to be in price, but can also been in time.
What do I expect? There could be another foray by the bears this settlement expiry, which could be used by amateurs as an excuse to short. This shorting could cost them dearly, as the bulls still seem extremely strong.
By following the Fibonacci extensions, the next logical target for the Nifty Index falls at 4170.
Will it or won’t it? Let us see.
Till then, trade unemotionally, and keep happy.

Nifty for 10 Nov 06

As was suggested in my last post on Saturday, the Nifty has achieved a target of 3840 today, and has tried consistently to retest it.

As is normal, these targets are overshot somewhat.

Therefore, it is only prudent to expect the 3840 levels to be penetrated mildly, and then a minor correction to set in.

Bulls among us can now wait patiently for re-entering the market at lower levels.

Nifty for 03 Nov 06

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.

Fibonacci projections taken from the June bottom suggest that the next likely target for the Nifty could be 3840. The Nifty has respected this particular extension drawn on the chart. As can be seen from the arrows marked out, every level has been tested, and then broken.

Further, those levels have also extended support on the the subsequent downswings, as can also be seen on the chart.

Therefore, it gives additional weight to the levels marked out.

The probability is high, that the Nifty will receive some sort of selling pressure at the 3840 levels, before breaking it on the upside.