Nifty for 31 Jan 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.

There is absolutely no change in the observations of yesterday. The earlier short term top is marked as the attacking point for the bears.

We had seen good profit booking coming along the ~5400 levels. The previous swing bottom ~5070 could be closely watched for weakness. If that holds, then we could continue to buy on dips.

The market was showing volatility mixed with mild strength overall till yesterday. Today the scene seems to have changed.

Therefore, we could now wait for buying. Stop losses may be strictly adhered to, to preserve capital. Please do not forget the fact that tomorrow is the weekend, and we may see a sharp spurt up, due to short covering.

Trade happy after planning your trade.

Nifty for 30 Jan 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 earlier short term top is marked as the doubt level on the chart.

There is no change from the observations of yesterday. We see good profit booking coming along the ~5400 levels. The previous swing bottom ~5070 could be closely watched for weakness. If that holds, then we could continue to buy on dips.

The market is showing volatility mixed with mild strength overall. In that case, dips may be bought into. Stop losses may be strictly adhered to, to preserve capital.

We have a cycle in time falling tomorrow, that is on 31 January. We could see the Nifty making a short term bottom.

Trade happy after planning your trade.

Nifty for 29 Jan 08 Another Update

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 charts alongside are of the crashes in the Indian market and how the Nifty future reacted to it. The first chart is of May 2004.

The second is of January 2007.

The similarities cannot be ruled out. The May 2004 chart shows how long the market had to wait, till the negative sentiment was negated. On the other hand, we see the same thing happening in a very short time in Jan 2007.

It is assumed that the "doubtful" region shown in my earlier post, would be broken on the upside. Of course, corrections cannot be ruled out. However, if the 5400 level is indeed broken with good volumes and stays above it, we could be looking at heady bullish days.

That does not mean we neglect our stops. Stop losses have preserved capital and locked in profits for us on hundreds of occasions. Give the market the respect it deserves.

Trade happy.

Nifty for 29 Jan 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.

From an intraday view, we had another hugely volatile day. From the end-of-day perspective, it was a nothing day.

The earlier short term top is placing doubts in minds of traders and we see good profit booking coming along the ~5400 levels. Therefore from a short term view point, the swing bottom of yesterday ~5225 could have significance. That is because we have seen good buying coming along at that level.

The previous swing bottom ~5070 could be closely watched for weakness. If that holds, then we could continue to buy on dips.

The market is showing mild strength overall. In that case, dips may be bought into.

Trade happy after planning your trade.

Nifty for 28 Jan 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.

Yesterday it was suggested that we may see another downside. As was also suggested, we are witnessing huge intraday volatility.

There was a large downside opening gap, and an equally sharp upward retracement. So far the previous bottom seems to be holding.

In such a scenario, we could use dips to buy.

Slightly longer term traders could now watch 5080, and long term traders could monitor the previous bottom ~5000.

Nifty for 25 Jan 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 indices continue in the short term bullish pattern. For those among us who have bought, the previous bottom of 5000 becomes important.

As far as the pattern goes, it seems that the rise from ~4450 to 5400 is the upwards correction for the ~1900 points fall in just a fortnight. Therefore, in all probability, we may have another short term down swing. It is also anticipated that the severity of the next downswing may not be as intense as the last week’s.

In such a case, we could use dips to buy.

Slightly longer term traders could continue to keenly watch 4890, and long term traders could monitor the last frontier 4448. I know that the ranges are large, but then it is not everyday, that the indices make a ~10% drop or a ~5% recovery.

Trade happy after planning your trade.

2008 Republic Day Greetings

Nifty for 24 Jan 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.

For prudent traders, we just need to look at the chart. The true deciders of the long term trend would be the levels marked on the chart. The top of 5350 and the bottom of 4450.

Traders with deep memories would be equating this crash to the 17 May 2004 crash. The bounce was equally sharp. The market meandered around for almost a month, and then resumed its upward journey.

However, it is not necessary that the same pattern would be repeated again, but the probability is high. A 900 point difference between the trend deciding levels are enough to unnerve even the best of traders. It is human psychology to buy when the prices suddenly start looking cheap. It is just two weeks and we have seen a 1900 points fall.

As of now, the indices have made a short term bullish pattern. It does make sense to buy at this point. But short term traders could work with tight stops. A drop below 4495 should send out warning signals for short term traders.

Slightly longer term traders could keenly watch 4890, and long term traders could monitor the last frontier 4448. I know that the ranges are large, but then it is not everyday, that the indices make a ~10% drop or a ~5% recovery.

Trade happy after planning your trade.

Nifty for 23 Jan 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.

As can be seen, the Nifty has sliced through several historic supports. The markets are reacting totally on news based items, emanating from the USA. Which is totally logical.

Braver traders would be bottom fishing. For the time being, it does seem that the negative sentiment has been leeched out to some extent. From the chart, it does seem that the Nifty has made a short term bullish formation.

It is my feeling that the Nifty is retracing part of its losses. In other words, this up move of the last few days is just an upwards correction to the fall. However, I may be wrong.

When the short term trend runs contrary to the main trend, volatility is only natural. To avoid getting burns in the pocket, it is suggested to take buy positions, but hedging would be a prudent course of action.

As of now, we may use the last bottom as a benchmark. 4440 on the Nifty would be a decider.

Trade happy after planning your trade.

Nifty for 21 Jan 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 chart needs no commentary. The worldwide sweeping negative sentiment cannot be insulated from the Indian Markets.

If we expect the Nifty to take support at previous support levels, think again. We cannot expect to stop a running train with a feather. It was suggested yesterday that we could short on rises. However, the market did not give adequate opportunity to do even that.

The short term trend is firmly down. The intermediate trend has also moved down. The long term trend also is in danger of turning down. Therefore, take care.

I can only repeat this statement.

Let the negative sentiment be weaned out of the system and then think of buying again. Please wait for a short term bullish formation and then take a risk for buying. As we know very well, bottom fishing burns.

Trade happy after planning your trade.

Nifty for 18 Jan 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.

As we can see the Index is relentlessly slicing through all the supports. If it carries on further like this, then we may see the intermediate term trend turn down too.

The flip side is that the fall is accompanied with very low volumes. Therefore, as soon as some buying interest comes in we are likely to see a good bounce back up. Till we see such a bounce, and a short term bullish pattern, it is suggested to stay out.

Those among us with slightly shorter term horizons may use a rise to short, keeping tight stops. Any move which is against the trend is generally volatile, and we may find ourselves on the wrong side of the trade.

In volatility, it is always prudent to hedge positions. We have a cycle in time falling during the weekend. Let us see what it brings.

Trade happy after planning your trade.

Nifty for 17 Jan 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.

It was suggested yesterday that the Nifty may encounter resistance around the earlier zone. The interplay between the support and the resistance will now determine the future of the Nifty. In fact the Nifty has made a short term bullish formation, but fell back sharply from the high of the day. If the Nifty is able to break 6015 towards the upside, and does not violate 5875, then we could assume that the short term trend has reversed to up.

Going ahead, it is expected that the Index could remain flat to weak for Friday and even Monday, and then consolidate on this short term bullish formation.

I can only repeat yesterday’s statement. Let the negative sentiment be weaned out of the system and then think of buying again. Please wait for a short term bullish formation and then take a risk for buying. As we know very well, bottom fishing burns.

Trade happy after planning your trade.

Nifty for 16 Jan 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.

On today’s chart, we see two aspects, one hugely bearish, and the other, a little encouraging for the bulls. The bearish part is the gap down opening, and the encouragement for the bulls is the bounce from a previous support/resistance level.

Our stop of 6110 has been triggered. In such a case we could be out of the market. The huge gap down opening seems to have been triggered by the negative sentiment worldwide.

Further, the Nifty has also made a short term bearish formation.

Therefore, because the pink support zone box has been violated convincingly, we must assume that this support zone will now offer huge resistance, if and when the Nifty tries its move up. Going ahead, it is expected that the Index could remain weak for another day or so, and then make a short term bullish formation.

Let the negative sentiment be weaned out of the system and then think of buying again. Please wait for a short term bullish formation and then take a risk for buying. As we know very well, bottom fishing burns.

Trade happy after planning your trade.

Nifty for 14 Jan 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.

From the chart pattern, it does seem that the Nifty is attempting to make a short term bullish pattern. In that case, it could continue its secular upward move soon.

Traders could take the risk of buying now, and place a stop at 6100. The short term uptrend would be confirmed if the Nifty moves above 6245 and does not violate 6100.

Trade happy after planning your trade.

Nifty for 11 Jan 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.

It was suggested yesterday ... “Tomorrow being a weekend, we may see support coming in around the 5900 levels, and then short covering may allow the Nifty to recover quickly. The Bank Nifty still indicates to be among the stronger sectors.” The recovery in the Index was largely contributed to by the Banking sector.

Well … the 5900 levels were not achieved but we did come 100 points near it. After today, the questions arises … How do we trade this?

I simple glance at the chart will show us that the short term price is moving down more than it is moving up. On the other hand, if we step back, we still see that the previous bottom of 6060 has not been violated. At this point in time, it is apparent that this is a short term downside move within the secular upside move.

As suggested earlier, today’s upwards retracement could be due to short covering. Thus we could anticipate one more down move. If, however, the Nifty moves higher than 6350, it would mean that the correction is over, and the Nifty has resumed its upward secular trend.

It is also true that the earnings announcements will motivate knee jerk reactions, thereby increasing intra day volatility. Therefore, it would be a good idea to work with hedging.

Trade happy after planning your trade.

Nifty for 10 Jan 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.

According to the analysis yesterday, it was suggested that the market is readying to correct. And it does seem that the correction has started. The cycle in time mentioned earlier was on 13 January. It does seem that the market has jumped the gun by a few days.

Maybe readers would get tired of reading the same words again and again. However, it does seem appropriate as a reminder, that we are in a long term bull market, and we would see many short and intermediate term moves counter to the main trend. These dips may be used to buy in.

Tomorrow being a weekend, we may see support coming in around the 5900 levels, and then short covering may allow the Nifty to recover quickly. The Bank Nifty still indicates to be among the stronger sectors.

Trade happy after planning your trade.

Nifty for 09 Jan 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 was a neither here nor there day. In fact, the Sensex had made a new historic high, but on the other hand, the Nifty did not.

When the market itself is uncertain, it is better to be defensive rather than offensive. Therefore it would be prudent to stay long while maintaining the stop at a closing below 6220, as suggested yesterday.

The overall profit booking seems to have subdued as of now. There has been a major decline in the totally traded volumes on both the exchanges. Which also suggests the uncertainty of the market.

Status Quo.

On the last note ... India is not US, and US is not India. Knee jerk reactions between the USA and India markets will happen on a day to day basis.

I urge readers to look at the long term picture.

Trade happy after planning your trade.

Nifty for 08 Jan 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 potential target zone which I have been carrying for the last few days seems just around the corner. Is it going to be a case of so near yet so far?

Today has been a classic case of overall profit booking on most sectors while the IT sector has witnessed buying interest, which is propping up the Index. Today’s move also validates the support zone which has been carried on the earlier charts. Even though today was a weak day, it still does not show a short term bearish bias on the Index. Therefore it would be prudent to stay long with a stop at a closing below 6220.

However, due to the overall profit booking mood, it does seem that we may see a downside correction for a few days. We notice that during the last three months, all the corrections have been shorter in nature than the earlier ones. It may be expected that this overall trend continues. However, please do not initiate any trades on assumptions but on cold hard facts. Look out for a short term bullish pattern before initiating any long trades.

Trade happy after planning your trade.

Nifty for 07 Jan 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 previous high of ~6200 and the second congestion around that zone now seem to be lending a supporting hand to the Nifty.

In spite of today’s weak opening, that seems to have held out. Therefore, it is logical to assume that this trend should continue. In such a case, this would also be an ideal place to insert a trailing stop, with a close below 6200.

As mentioned earlier, it is always advisable to stay with winning sectors rather than hope that the losing sectors would turn up. There are signs of profit booking showing. That is the reason why we are witnessing higher than usual intraday volatility. It may be a good idea to maintain stops for the present time. Since the uptrend is so strong, shorting seems out of the question as of now.

We are also seeing a cycle in time around 13 January. It is possible that the Nifty may make a decisive move around that date.

Trade happy after planning your trade.

Nifty for 04 Jan 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.

On the last post of the last year, I had mentioned that the Nifty may achieve just 6245. However, as is apparent on the chart, it paused very slightly on that level and then just rushed through.

In any case, it is still hovering around that 6245 level. We see huge sector rotation happening. The Bank Nifty was correcting in a small way today. The CNXIT index is truly weak, while other sectors were pushing the Index up to new heights.

Mainly led by the Metals and the Oil and Gas sectors. The manner in which the Index has shot up today suggests that the next range of targets is not far away. Yet, at this stage, I would inject a word of caution. The Index is showing greater than normal volatility. The reason for this seems the profit booking is on in various sectors. This could burn a few holes in short term trader’s pockets.

On the other hand, from a really longer term perspective, if this rising triangle breaks out, the sky is the limit for the Nifty. Well not exactly the sky, but we could see the 8000 mark on the Index.

Trade happy after planning your trade.

Nifty for 31 Dec 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 has been quite some time since I last posted. In my last post, it was suggested the market could make a short term top due to the cluster of time cycle between 13 to 16 December. It did.

It was also suggested that an up and down roller coaster could continue till 21 December. It did.

Also, as was suggested, that the “warehousing fever” could start around the last week of this month. It did.

It is reward enough for this humble analyst that readers could have made opportune exits and then re-entries based on my earlier suggestions. Looking ahead, the market is pausing at a previous target which provided resistance earlier too.

The market is now poised delicately. It does seem that the previous top will be broken. How far will it break? This time I do not anticipate a large margin. The anticipated level it could achieve is 6245. After that we could see a correction. Be on guard.

Have a good year ahead. Not a greedy one.

Trade happy after planning your trade.

Nifty for 13 Dec 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, we are approaching a cluster of time cycle between 13 to 16 December. It does seem that the market has made a short term top today.

This up and down roller coaster could continue till 21 December.

From a trading perspective, the trailing stop is marked out on the chart. This could be used by readers to lock in profits. This is not an invitation to short. As was suggested some time earlier, let us learn to trade with the trend. Normally at this time of the year, the big players are planning on taking their Christmas vacation.

This leaves markets all over the world, vulnerable to manipulation on small volumes. Therefore, it may be advisable to sit on the sidelines till the “warehousing” fever starts, where our local players begin to accumulate stocks in the anticipation that the FIIs would start their activities after the New Year.

Trade happy after planning your trade.

Nifty for 12 Dec 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, there was some panic buttons hit on the open, with a gap down opening. However, the market was resilient enough to recover right from the word go, and has hit a short term objective which we have been seeing on my charts for a long time.

When a mathematical objective is achieved, it is logical to seek the next probable objective. That falls around the 6400 to 6450 levels. The time cycle of 13 to 16 December is just around the corner. Therefore, we as traders should remain on guard for some volatility.

Maybe … the market may make a short term top around these dates.

The Nifty still does not seem to have peaked. We could retain our long term bullish outlook, and it may be suggested to buy on dips.

Trade happy after planning your trade.

Nifty for 11 Dec 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 precisely a week back that the market is waiting for the news based event viz. the expected rate cut in the USA. And during this week, the market is playing itself out, discounting the expected event. When the news comes in, we can expect one of two things.

The rate cut happens.

The rate cut does not happen.

If the rate cut happens, the market has already expected it and has already factored that expectation in the price. In that case, it will be business as usual. We can expect some profit booking to the “expected” news.

However, if it does not happen, then we can expect some panic buttons to be hit. In such a scenario, it is always advisable to keep tight stops.

It was also suggested last week that …. “we have a short term time cycle falling tomorrow i.e. 5 December. A longer term cycle falls between 13 and 16 December. Let us wait and watch and see what the Index does on these days”.

Maybe … the market may make a short term top around these dates.

The last word. The Nifty still does not seem to have peaked. In such a case, we could retain our long term bullish outlook, and it may be suggested to buy on dips.

Trade happy after planning your trade.

Nifty for 04 Dec 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.

Not much needs to be said of yesterday’s chart. It has broken out from the yellow zone.

It is a sign of bullishness which we have discussed since a fortnight.

Today the Nifty has showed some hesitation at a psychological level which was an earlier target level. The market is hesitating for a very simple news driven event. The rate cut to be announced on 11 December in the USA.

Till then, it is expected that the market could meander a little aimlessly. In any case, the direction is expected to remain upwards. For bullish positions, the trading stop could be suggested at 5600. However, the yellow zone which has been applying resistance earlier could be expected to give a short term support. And may be pierced slightly on the downside.

There is speculation also that the BIG players are buying the Nifty futures and selling stocks. Ultimately, it all boils down to one thing. The tail can wag the dog for a short period. In the final countdown, the dog owns the tail.

We have a short term time cycle falling tomorrow i.e. 5 December. A longer term cycle falls between 13 and 16 December. Let us wait and watch and see what the Index does on these days.

Trade happy after planning your trade.

Nifty for 30 Nov 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 has been a week since I posted on my Blog. On my last post for 23 November, it was suggested to maintain a stop at 5394. Since then, it has not achieved that level.

It was also suggested that the short term trend would be termed as up in case the Nifty moved above 5638. In such a situation, it is assumed that readers would still be comfortably long. The stop could be raised to 5596.

As can be seen on the hourly chart, the short term trend is still up. This suggests that the Nifty may achieve higher numbers and the last peak may also be violated. The yellow zone is exerting a lot of influence due to profit booking. Indeed if we just glance back at the chart, it does show that the yellow zone is a hugely significant psychological level. The odds are now favouring this zone to be broken with conviction on the upside.

Trade happy after planning your trade.

Nifty for 23 Nov 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.

On the face of it, we do see follow up buying to validate Thursday’s bounce. However, the follow up buying is not strong. It may be assumed that the FII’s were absent due to the holiday on Friday in the USA.

On the intraday charts, we saw a short term bullish pattern yesterday. Again, on the intraday charts, it has been validated. But not on the hourly chart. For the short term pattern to be validated, on Monday, the Nifty should move above 5638, and not fall below 5394.

This gives us a large range. To avoid large scale risk, traders could buy keeping the stop at 5394.

Trade happy after planning your trade.

Nifty for 22 Nov 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 bounce for today was strong. It needs to be validated tomorrow. In all probability, this bounce is only due to short covering. This suggests that this up move may be short lived.

However, please remember, this is only an assumption. If the Nifty continues its journey upwards and fails to violate 5390 on the downside then the short term trend would resume upwards.

On the intraday charts, we have seen a short term bullish pattern, which still needs to be validated.

There was a question, why I have not suggested going short. The simple reason is that a trader must learn to sail with the wind. It takes much lesser effort to make profits. The 5070 level was just a mathematical projection. It is not necessary that the market could achieve that level. It could stop before. Just like it has done today.

The main trend is still bullish. We see a bullish pattern on the intraday charts. We may hazard entering long positions. However, this phase is a correction in the main up trend. And as we know, any move which is counter to the trend is volatile. It is, therefore, prudent to stick to the trend.

Trade happy after planning your trade.

Nifty for 21 Nov 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 the market tanks, fast and furious, it catches traders off guard. However, readers would have been warned to take evasive action yesterday.

It was suggested yesterday that we may achieve 5070 levels on the Index. However, the small expected upside did not happen. It was one way street.

For the short term trend to change upwards, the Nifty should violate 5695 on the upside and not break 5530. It seems the short term bulls may take a short vacation till we have a convincing bullish pattern.

The main trend is still bullish. But we could wait for a bullish pattern to enter long positions.

At time like this, bottom fishers come out in droves and usually end up burning big holes in their pockets. To such potential bulls, I suggest patience, and confirmation. Allow the market to confirm before committing capital.

Trade happy after planning your trade.

Nifty for 20 Nov 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.

Contrary to what was expected, the market has gone into a volatility mode rather than breaking out. This normally happens when the market is correcting. With just a week away from derivatives expiry, this market could shake out long positions. In such an event, the Nifty could achieve the 5070 level or thereabouts.

We also see a strange phenomenon. Normally, this type of pattern does not occur at a market high. A potential head and shoulder pattern seems to be emerging on the intraday charts. For this pattern to be validated, the Nifty should not go below 5500 levels.

We could see a small upside tomorrow. However, for the short term trend to change to upwards, the Nifty should move above 5924 and not violate the bottom of 5756.

We could maintain our suggestion of bullish outlook and could continue to buy on dips. At times like this, it is very important to wait for a bullish pattern to emerge on the intraday charts, rather than try and jump ahead of the market. As a reminder, the example of a bullish pattern is already placed on my Blog.

Trade happy after planning your trade.

Nifty for 19 Nov 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 charts it is very obvious that the market is testing the resistance again … and again and again. Normally, when the market tests such a resistance several times and is unable to break it, it collapses fast and furious. However, it has not done so. In such an event, it may be surmised that the market is preparing to break out on the upward direction. And this move also could be fast and furious.

We also notice that the downside movement has not been substantial. Therefore, logically, the market should give another 500 points from this stage IF it breaks out upwards. But please remember the suggestion made last week. That of volatility.

We could maintain our suggestion of bullish outlook and could continue to buy on dips.

Trade happy after planning your trade.

Nifty for 16 Nov 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 may be seen from the charts of this week, the Nifty is pausing at crucial levels. Whether it is on the way up or down. This suggests that the market is behaving rather well, technically.

As frequent readers of my musings would know, my method of technical analysis is not the art of making “forecasts”. I would prefer to take a look at the past movement to make an assumption for the future. However, assumptions should never replace a trading plan, and readers could maintain their plans according to their own time frames and comfort levels.

We can see that the movement for last week has been corrective in nature. Therefore, we could assume that the trend could continue upwards after this corrective phase is over.

The next fortnight has a lot of time cycle clusters, so we may witness higher volatility than normal.

We could maintain our suggestion of bullish outlook and could continue to buy on dips.

Trade happy after planning your trade.

Nifty Charts for Second Week of November

The charts for this week, gone by.

Nifty for 06 Nov 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.

There seems to be no change from the last analysis. On the intraday chart, the Nifty seems to be consolidating. The established support range is again being tested. As a reminder, we need to remember the significance of this support range.

Short term traders could keep their trailing stop at a close just below the support range to avoid large losses.

The traded volumes during the last several trading sessions suggest that the market is very skittish. We see increasing volumes on down days. However, the price pattern on the charts does not suggest that we have seen the end of the Bull Run.

We could maintain our suggestion of bullish outlook and could continue to buy on dips.

Trade happy after planning your trade.

Nifty for 02 Nov 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.

On the intraday chart, the Nifty seems to be consolidating. It has also established a fresh support range. This support range is more significant especially when the Nifty had paused thrice around those levels. Further, it had broken out of that range with a huge gap. That gap has been closed today.

The only discomfort which I can point out is that the overall traded volumes on both the exchanges were not too heavy. That could put a slight shadow of doubt on the recovery of Friday.

Other than that, nothing deters me from suggesting my anthem … buy on dips.

Trade happy after planning your trade.

Nifty for 29 Oct 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.

Sidelined traders may still be rubbing their eyes in disbelief when they see a new top established by the indices. It only seems yesterday that we were looking at the near 5000 levels, and today we are almost near 6000.

The gap through the previous historic top also indicates the bullish frame of mind the market has finally come to terms with.

I really wonder how many readers would have had the guts to buy at these stratospheric levels, even though they have been reading for months on end … “buy on dips”.

That is exactly what the market is all about. When we do not have the guts to buy, the market moves up. When we finally muster up the to buy, the market is ready to shed its weight. The 5700 levels become more significant because of the fact that it has been tested several times, and has finally broken its shackles with a gap.

Trade happy after planning your trade.

Nifty for 24 Oct 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.

Another gap opening, an immediate correction and a neutral closing. The market is really going to test traders’ nerves. It is still hovering around the historical trendline. In all probability tomorrow could be a weak opening.

Our cycle in time could … just could show us an intermediate top tomorrow. As I am fond of saying, I could be wrong, and the market is the ultimate supreme, I could suggest to allow the market to tell us what is wants to do.

Short term traders could monitor 5577 on the top side and 5418 on the lower side. If either of them breaks, we could take a guess at the short term direction. However, the long term and intermediate term trends are still up, and it could be suggested to buy on dips.

A stop could be placed at 5069 for deciding the intermediate trend.

Ultimately, it all boils down to, what time frame you are looking at, and what is your risk appetite. And the final word is, trade happy after planning your trade.

Nifty for 23 Oct 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.

Within a span of two days, historic and short term support and resistance lines have been tested and confirmed. How does the market know where to pause?

After today’s price action, the earlier projected levels do not seem possible now. As we can see, the short term chart has indeed made a bullish pattern. Further, the Index opened with a gap, and failed to close it on the intraday chart. This suggests that the market is indeed bullish and the correction may have been over with Monday’s low.

That brings us to our earlier trading suggestion ... to buy on dips. A stop may be retained at a close below 5070 for the next few days.

The stop must seem a large distance away. However, readers are requested to check out my musings of just last week. The links are given below.
Nifty for 17-Oct-07.
Nifty for 18-Oct-07.
Nifty for 19-Oct-07.

It was suggested that we are in a volatile stage in the market and there could be violent moves either way, as the corrective phase is the most difficult to trade. At times like this, it is also prudent to hedge trades to avoid colossal losses.

Plan your trades and be happy. After all, trading scares are all in the mind.

Nifty for 22 Oct 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.

Today was a nothing day in terms of market movement. Except that a historic support was tested. Today’s session was in the nature of consolidation. That suggests that the market is uncertain of direction. In spite of doomsday “predictions” for “black” Monday the market was rather well behaved.

As of now, the projected levels still stand true. Both for time as well as price.

As was suggested on Friday, I repeat the time and price levels. As of now, ~4765 (~16178 on the BSE) seems to be on the cards. Maybe, we could see a short term bottom on our projected time cycle of 24 October.

I did get some queries about whether the Nifty would hit the 4765 level exactly on 24 October. For such queries, I re-state my philosophy. I do not have a crystal ball, and am not able to see the future. All I can suggest is to … Plan your trade and trade happy.

Nifty for 19 Oct 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 has finally cracked. This move could have the extinct bears of the Indian markets wanting to come out of hibernation. Already I am beginning to hear their grunts.

To such hopeful bears, I may give the suggestion to please go back to sleep. This correction may last for a short time. However, the market seems to be headed for a phase of high volatility, so even if short term bears do become active, it may not give them adequate opportunities. Stops would be triggered, panic buttons would be hit. The risk to reward ratio is not favourable for bears.

We may see selling at every significant rise, but that could be in the shape of smaller profit booking exits, rather than large scale bear selling.

Yes, it is true that we are correcting down. Yes, we could project some down side. But no one can pin point with certainty when the correction is over. As of now, ~4765 (~16178 on the BSE) seems to be on the cards.

Maybe, we could see a short term bottom on our projected time cycle of 24 October.

Plan your trade and trade happy.

Nifty for 18 Oct 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.

Wow, another violent day in the markets. At times like this, I would like to remind readers that it is not necessary to trade everyday. Your broker does not hold a pistol to your forehead, and force you to trade.

So far, the trend is still up, with a higher top higher bottom pattern. I would still continue to retain a bullish outlook. Until a close below 5120.

A corrective phase is the most difficult to trade with huge and unexpected volatility. Though I am not an Elliottician, we could be entering a phase, which could be falling in the corrective Wave 4 category. On 9 October, it was suggested that we are looking ahead to a cycle in time on 24 October. Let us see what next Wednesday has to show us.

Plan your trade and trade happy.

Nifty for 17 Oct 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.

Good God!!! I think I should stop making prophetic statements. Never in my wildest of dreams did I imagine that the market would open on downward circuit.

The biggest question which would arise in a trader’s mind is, what direction is the market headed? I do not have a crystal ball to gaze into the future. But all I can do is to suggest how to trade this market.

Fact One: The long term trend is up.
Fact Two: The intermediate trend is up.
Fact Three: The short term trend is down.

I would choose 5100 as a benchmark for deciding the short term trend. If the Nifty violates 5100 on the downside, then the short term trend would be labelled as continuing down. If it violates 5596 on the upside, then we may label it as a reversal of the short term trend, and may buy on dips. If it does neither, and stays between 5100 and 5596, then we may label it as a sideways movement in a short term downtrend.

I would still not suggest shorts, but then I may be foolish. I would still go with the trends. I may suggest shorts only for short term traders with a strict intraday stop at 5600.

I would buy only after a confirmation of a bullish pattern. A confirmation would mean that the Nifty moves above 5600 and does not violate 5100. That is a 500 points range … agreed. But then, the Index does not move 10 percent everyday.

Plan your trade and trade happy.

Nifty for 16 Oct 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.

Today, the market has indeed achieved the predetermined target. It has also tried to break it, but found some resistance. In all probability, we could see some stronger resistance here. We may use this opportunity to buy on dips. The weakness which was anticipated on Monday may happen on Wednesday.

Where does a trader buy? Obviously, it depends on each person’s individual risk appetite. But always keep in mind to buy only after a confirmation of the bullish pattern.

And if the market does not correct, it is suggested to keep the trailing stops intact, and enjoy the ride.

Plan your trade and trade happy.

Nifty for 15 Oct 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 seems to be in a real hurry to achieve targets. The projection mentioned on Friday has been achieved within one trading session. What more can be added except the old broken record?

Plan your trade and trade happy. It is suggested to keep the trailing stops intact, and enjoy the ride.

It was anticipated that we could see a weak opening but that was not to be. From the interaction I have with some traders, it does seem that bulls are getting anxious to enter the market. In such a scenario, it is always a little dangerous to buy. However, as is always suggested. Keep our stops and enjoy the ride.

Nifty for 09 Oct 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.

Today I wish I had said, I told you so. But it was not my day.

The market does not want to give up at this point in time. As observers, it tells us that it does not want bulls to enter at this point.

In any case, even after having analysed the market for over thirty seven years, I still feel amazed how the market respects certain levels. The Index bounced just from the blue line, which was an earlier price projection, and never looked back from there. Are we now looking at the ~5400 frontier?

The saving grace for is that it was suggested that last week was not the ultimate top. The market has been king to respect that observation. Yesterday, it was suggested that we could witness a cycle in time on 24 October, but from today’s behaviour, we could see a short term top on 11 October itself.

Plan your trade and trade happy. Suggested to keep the trailing stops intact, and enjoy the ride.