Nifty for 31 May 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 hate to say, I told you so. But the market has proved this humble analyst correct. And also proved how media hype can affect the sentiment on certain days.

Going ahead, the Index is showing a consolidation pattern. The psychological supply line still is bothering the market. But if this breaks, then we will have a no holds barred bull market. This is not a trading suggestion but a suggestion to plan your trades and trade happy.

Nifty for 30 May 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, “the chart also shows a long term psychological supply line which is extending short term resistance. Short term traders could do well by raising their stop to 4240, which is slightly below the previous historic peak.” The supply line seems to have had its effect today. There is nothing in today’s chart which suggests panic.

In fact, it was the media which was hyping the Shanghai effect. Whereas, if we just step back in time, we will see how the Shanghai Index has outperformed the Indian bourses. Here are some comparative charts, courtesy Yahoo!.

As usual, please right click on the charts, and open in a new window.

Here is a three month comparison, where the Shanghai Index is up in the high 55% region, whereas the Nifty has moved less than 20%.

Now take a look at the six months comparison. As they say, one picture is worth a thousand words.








But wait a moment, take a look at the next chart, over one year.

A whopping 150+%. And the media hypes a six percent fall.

Had it not been for the Capital Goods and the Consumer Durables sectors, the effect on the Indices would have been worse. Longer term traders could still maintain 4140 as their stop. The derivatives expiry will contribute to volatility, so partial hedging also may be advisable. Short term traders may decide their own level of comfort for absorbing a loss, but as oft repeated, a stop is a must.
Plan your trades and trade happy.

Nifty for 29 May 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’s chart shows a steady bullish action, where there has been steady buying, keeping the prices moving higher. This establishes a wide 50 point support range for the short term.

If this support is tested and holds, then we could see continued buying support and historic highs being made on a regular basis.

The chart also shows a long term psychological supply line which is extending short term resistance. Short term traders could do well by raising their stop to 4240, which is slightly below the previous historic peak.

Longer term traders could still maintain 4140 as their stop. The derivatives expiry will contribute to volatility, so partial hedging also may be advisable.

Plan your trades and trade happy.

Nifty for 25 May 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 24 May, that the correction does not seem over, the market opened with a downside gap. It was also suggested that “according to calculations, the market could see short term supports at 4170, 4095 and 3980. Allow the market to confirm these short term bottoms, before we change our mind about buying in.”

The market did take support at 4141, between the two calculated levels, and then there was no looking back. Today’s upward move has all the signs of short covering by panicked bears.

Another reason could be the weekend factor, where the bulls have masterfully trapped bears. Very frankly, I am very apprehensive of such a market move. In such an event, normally, we can expect a bear attack soon. Therefore, for any buy action we take, we must keep the low of today at 4141 as a stop, to avoid calamitous losses.

Sometime, we cannot plan for such a situation, where the market tanks at the open, giving the impression of weakness, and carries up all through the day.

After today’s move, the sentiment is fragile, but back in the positive direction.

Plan your trades and trade happy.

Nifty for 24 May 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 did pause for a short term at a support zone. It was not strong enough to give enough impetus for buying. Hence, it was quite natural to expect the market to continue further down.

According to calculations, the market could see short term supports at 4170, 4095 and 3980. Allow the market to confirm these short term bottoms, before we change our mind about buying in.

Further, we have not seen enough time elapse for the negative sentiment to build up. And we all know, we should be buying only when the negative sentiment is at its peak. The sudden crash in the last hour or so, must have triggered a lot of stops of bulls.

Plan your trades and trade happy.

Nifty for 23 May 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 quite possible that the cycle in time of 22 May 2007 is contributing to the weakness today.

Most prudent traders would have had their stops triggered and locked in profit. There comes a time when we could step aside and allow the market to decide on its course. This could possibly be such a time.

It was expected that a short term top could have been registered yesterday. I may be wrong in my projection. It could have been today. In any case, we are stepping into the last week of derivatives expiry. Always it is a time to be prudent rather than rash.

Plan your trades and trade happy.

Nifty for 22 May 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.

We have finally arrived at our D-Day of the cycle in time of 22 May 2007. From today’s trading it seems to have turned out like a non-event.

Quite a few friends have either written to me or asked me on chat what they should do. Exit all longs? Go Short? Buy on Dips? To all such queries, I have a very simple answer. Please get out of the habit of trying to pick tops and bottoms. Treat trading like any other business, rather than like a casino.

A cycle in time is just that … a cycle in time. Allow the market to tell us what the price is doing. Tomorrow, either of three things can happen.

The market can continue up.

In that case, it is suggested to just keep tightening stops on the bought position.

The market can move sideways.

In that case, the stops are always there to allow the traders a profitable exit.

The market can move down.

In that case, the stops are always there to allow a profitable exit.

The common thing among all the three scenarios is the stop. And that is what will keep our profit intact.

The Nifty is making historic highs, and bulls are worried? I find that very strange.

From today’s move, it does not seem that the bull run is over, not as yet. We may have a short term top today. But then, I repeat, allow the market to tell us that, rather than jump the gun.

Even though the price is banging away at the historic supply line, why are we worried, when the supply line is rising? A rising line means added profit. It is that simple.

Plan your trades and trade happy.

Nifty for 18 May 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 first tick of the morning closed the gap which was created on Thursday 17 May, technically. However, I would not give much cognisance to the first tick, as it could be just a small trade registered. Two short term zones marked in grey are those showing the gaps. In the tussle between bulls and bears, normally the market respects such gaps. That is because the bulls do not want the bears to cover their short positions which have been created prior to the gaps. The short covering then adds impetus to the bull phase, allowing bulls to exit at higher levels.

The Nifty is just a whisker away from a historic high. Normally, we do not expect the weekend to be such a non-event day, with flat trading.

When volatility tightens, we could expect some explosive move either way. I could be wrong, but the probability of an up move still remains. Till then … Plan your trades and trade happy.

Nifty for 17 May 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’s move with a rising window would not have allowed traders to enter at the open. This type of market move normally frustrates traders and then they jump in at any price. They then end up holding stocks at high prices.

The Nifty future has made a historic high today. Whereas, the underlying Nifty index has yet to make a new high. This suggests that some element of excessive speculation is slowly entering the market. The future is now trading almost at par with the Index.

Under normal circumstances, this always rings a warning bell. We are fast approaching our time target of 22 May.

Plan your trades and trade happy.

Nifty for 16 May 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 15 May, it was suggested “if the gap is not closed, then we may see a runaway gap, which could reinforce the bullish sentiment.” The market did open with a gap, but we did not really see a runaway gap. In any case, the bullish sentiment has reflected well in today’s sharp move up.

Today, the short term trend has changed as up. From the way the market is behaving, it is my expectation, that this up move may be short lived. In fact, as stated earlier, we have a cycle in time on 22 May, which could be a short term top. If the market behaves itself, then we may see the trend continue up till 22 May.

Plan the trade and trade happy.

Nifty for 15 May 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 Friday, 11 May, it was suggested to “wait for a break above 4095, and then buy on a dip, with an appropriate stop.” Again on Monday, 14 May, it was suggested “the gap of today may be tried to be closed. This down move may be utilised to buy.”

Today has been a non event day … almost. Except that yesterday’s gap has not been closed. Therefore, we could be alert tomorrow for such an event. However, if the gap is not closed, then we may see a runaway gap, which could reinforce the bullish sentiment.

The candles are still small. The short term trend has still not changed as up, but has not confirmed the down either. The likelihood of it changing to up is highly probable.

Plan the trade and trade happy.

Nifty for 14 May 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 Friday, 11 May, it was suggested to “wait for a break above 4095, and then buy on a dip, with an appropriate stop.”

The break above 4095 has happened, and we could use any correction to buy in.

Further, the low of 3981 seems to have taken support on a tested trend, which validates it, further. Therefore, we may label this bottom as a significant one. The gap up opening may not have allowed traders to buy in, but these are the hazards to real live trading.

In any case, the gap of today may be tried to be closed. This down move may be utilised to buy.

The candles are still small. This tells us that even after such a positive opening for the week, the market continues to be uncertain about the direction. The short term trend may change as up from today, provided the bottom of 3981 is not violated. The likelihood of that happening is highly probable.

Plan the trade and trade happy.

Nifty for 11 May 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 of Friday, 11 May, we can term the short term trend to be down. This is strictly from a technical point of view. However, if we separate the black and white from the grey, the freak tick on the Nifty at the opening registered the low, without actually having really traded through. This suggests computerised basket selling.

I already hear whispers of market manipulation and conspiracy. I would suggest readers to forget those conspiracy theories, as the market is not conspiring against each of you as individuals. It is just a matter of some fund manager or managers assuming that the market is going to trade lower.

There is a popular saying in the West, “sell in May and go away”. As we see the market getting more correlated with world markets, we also notice that we have had major corrections in May 2004, March 2005, May 2006 and now possibly May 2007. Now that the earnings season is over, it is pragmatic to expect some profit bookings.

From a trading point of view, where are we in the trend? The long term is up, the intermediate is up, and the short term is down.

In any case, the low of Monday 30 April (4028), which was suggested as a stop, would have been triggered. We see the Nifty taking support on another zone with the low at 3981. For the adventurous among us, who are tempted to buy, the low of 3981 may be used as a stop.

However, for the conservative among us, who wish to follow our bullish set up example (see link on the right), it would be advisable to wait for a break above 4095, and then buy on a dip, with an appropriate stop.

The candles are still small and the shadows are large. This tells us that even though the trading range for the day is large enough, the market continues to be uncertain about the direction.

And as I am fond of repeating … now is the actual time to Plan the trade and trade happy.

Nifty for 10 Mar 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 situation is getting too close for comfort. We did see a bounce today. However, the market could not sustain the gains and crashed. The positive thing about today is that the earlier bottom is still holding.

Traders could continue to keep the low of Monday 30 April (4028), as a stop to protect from losses.

For the last few days, we notice that the candles are small but the shadows are large. This tells us that even though the trading range for the day is large enough, the market is uncertain about the direction. Also we notice from the chart that the price is squeezing, with lower tops and higher bottoms.

When the market itself is uncertain about the direction, why risk capital and try and catch the bottom? Wait for the trend to establish.

And as I am fond of repeating … Plan and trade happy.

Nifty for 07 May 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 is continues to follow the technical pattern. It is still respecting earlier established supports and resistances. Traders could still keep the low of Monday 30 April (4028), as a stop to protect from losses.

Readers must be getting tired of reading the same thing over and over again, but nothing dramatic has happened to change that belief.

Today’s small candle again is in the nature of a likely correction. The Nifty could take support around the 4070 to 4100 region.

Plan and trade happy.

Nifty for 04 May 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 Thursday, 3 May, we had mentioned, “We could see a small downside correction, which may be utilised to buy in.” I am sure, readers could utilise these opportunities.

The market is still following an orderly pattern. It is still respecting earlier established supports and resistances. Traders could still keep the low of Monday 30 April (4028), as a stop to protect from losses.

Today, even on a down day, on the Index, we see some buying going on “behind the scenes.” This reinforces my belief that this minor downside is a correction, and could be used to buy in.

Plan and trade happy.

Nifty for 03 May 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.

We had pent up energies for two days, and as a result, we see a gap up opening. This was only to be expected. And as with any gap up opening, we could expect some mild profit booking to come along. We could see a small downside correction, which may be utilised to buy in.

The market is still following an orderly pattern. Traders could still keep the low of Monday 30 April, as a stop to protect from losses.

Those among us, who have not bought, could wait for an upside violation of the high of 27 April, and keep an appropriate stop. For traders with a slightly longer term horizon, we could wait for a marginal dip after the expected upside violation of the 27 April high. However, it is my feeling that this could be a last leg up for the market, on an intermediate term. We could see a deep correction towards this month end. The next cluster of cycles in time occurs on 22 May.

As of now, we could expect the market to make an intermediate term high around that time.

Plan and trade happy.

An Aside

Did you relax on Labour Day? An oxymoron if I ever heard of one.

Click here ...


Have a pious Buddha Purnima.

Nifty for 30 Apr 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 did not achieve our short term price objective, but has indeed bounced from our time frame objective. As of now, the bounce does seem convincing enough.

The market is also following an orderly pattern so far. Short term traders could have bought this bounce as was suggested on Friday, 27 April. (Click Here) . Those among us, who have bought, could keep the low of Monday 30 April, as a stop to protect from losses.

Those among us, who have not bought, could wait for an upside violation of the high of 27 April, and keep an appropriate stop. For traders with a slightly longer term horizon, we could wait for a marginal dip after the expected upside violation of the 27 April high.

Plan and trade happy.

Nifty for 27 Apr 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.

At this point in time, I can only say one thing, with great humility. I am indeed gratified that readers could have made some profitable use of my personal musings.

As of Friday evening, I can only repeat what I said yesterday … “Then a question again is asked … what next? Frankly, I cannot answer that question now. However, I can just state what I expect. I think that Monday, 30 April will show us a short term bottom, and the uptrend is going to resume up once again.”

The Nifty could stop at around the 3950 levels. But please … I can only suggest not to rush and buy at that level. Wait for a confirmation of a short term bullish pattern, and then buy. For new readers, here is the link once again (click here).

Wait for a bounce, allow the market to confirm the bottom, and then buy.

Plan and trade happy.