Nifty for 08 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.

I hate to say, I told you so.

Readers are requested to just go back and read my analysis for Friday. It was repeated again and again during the whole of last week, to remain cautious with trailing stops, and I assume that those musings of mine would have been heeded.

All I can repeat at this stage is my “feeling” about the market. “I can confidently say that this short term top which could occur or already has occurred around ~5250 is not the ultimate peak.” Again, I repeat … this is my feeling … and not trading advice.

The final opportunity for bulls may just be around the corner. This may be around the 24th of this month. The suggestion to buy on dips remains, what we need to ascertain is that the Index makes a bullish pattern. The chart of the bullish pattern is there in my posting archives. Check for the link on the right side. However, I am showing the chart again for convenience.

With such a large bearish day, it is inevitable that there would be some short covering, which could allow the Index to move up. This situation normally tempts bulls to buy again. However, it is not suggested to jump in right away.

Most important, please be prepared for some huge intraday volatility with gap open moves.

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

Nifty for 05 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 weak day. But so far, the Nifty is still displaying a consolidation pattern, without any signs of breaking down. However, we still see signs of profit booking in lower rung stocks, with the index heavyweights propping it up. Therefore, it is suggested to trade with caution in the second and third rung stocks.

The target of around 5400 is still open, and quite possible, we may not see it achieved in a hurry.

The market seems to be throwing all the “rules” out of the window as of now. All I can deduce from a longer term perspective, that there is a HUGE amount of steam left in the Indian stock market. I detest making predictions, but I can confidently say that this short term top which could occur or already has occurred around ~5250 is not the ultimate peak.

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

Nifty for 04 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.

At last the Nifty has broken its track record of making new highs everyday. As of the last two trading sessions, it seems to be a short term consolidation pattern.

I can only repeat what I mentioned yesterday. “The chart shows our next expected frontier. Will it or won’t it? No point speculating on this question. That will not earn us money.”

Today was a negative day on the Nifty, but not very significant. However, the only really negative thing which I observe is that the Nifty Futures are priced higher than the Nifty spot.

As we know, there should be a cost of carry for the Future, as the market is financing you to buy a virtual position. This should keep the Future priced higher. We have noticed that, usually, at market bottoms, the sentiment is depressed and the difference between the Cash and the Futures is high, with the Futures being lower priced. The reverse is true at market tops.

At present the difference is not much. However, this would lead to a perfect arbitrage situation, where the larger players could buy the Nifty Components and sell the Future to earn a risk free profit.

We also see a few cycles in time falling between 8 and 11 October. It seems that the attitude now should be of caution.

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

Nifty for 03 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.

How boring … another new top. Today, the Nifty moved out of two short term projections with a gap. There was expected profit booking, and a convincing recovery too.

The chart shows our next expected frontier. Will it or won’t it? No point speculating on this question. That will not earn us money. A simple strategy of keeping trailing stops has earned us another ~150 points on the Nifty.

It was suggested on Monday that the Nifty has bounced twice from our earlier blue line/green zone, which was another short term projection. It was stated that this makes the green zone a significant one. Oh well, the Nifty did respect that level, and the result is there for us to see.

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

Nifty for 01 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.

Do spend a moment remembering the twentieth century icon of non-violence.

How boring … another new top. The Nifty has almost kissed our projected black line.

It is also noticed that the Nifty has bounced twice from our earlier blue line/green zone, which was another short term projection. This makes the green zone a significant one. Keep a sharp eye out for it in later days.

Apart from that, there is not much change from yesterday. The short term trend is still up. Our strategy of raising our profit booking stops has just given us an additional half percent on the Nifty.

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

Nifty for 28 Sep 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 is not much change from yesterday. The target zone is still open. The minute short term trend is still up. Our strategy of raising our profit booking stops has just given us an additional few points on the Nifty.

There was a question about the long term trend of the mother of all worldwide indices – the Dow Jones Industrial Average. This monthly chart was prepared sometime about three years back, and none of the studies have been changed. The time and price nexus is still standing the test of history, and we can expect it to do so in future too.

Most traders get so caught up watching the intraday charts, that they forget there is also a longer term aspect to trading.

I have oft repeated that a miniscule minority of traders can catch the top range and the bottom range. Otherwise, the exercise of trying to predict is a luxury most traders cannot afford and should not indulge in.

Even now, the Dow is not showing a final peaked out pattern as yet. And as we all know, all is not well with the USA economy.

Similarly, we do not see a peaking pattern on the Indian indices as well. So where is the need to panic?

What more can I add except, plan your trade and trade happy. It is suggested to keep the trailing stops intact, and enjoy the ride.

Nifty for 27 Sep 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 simple strategy of keeping a trailing stop keeps us in the market, rather than to exit prematurely. It has given us more than one percent today.

As far as expiration days are concerned, today must be the tamest expiry day in a long time. No fireworks, no flashes, just a continuation of the steady uptrend. The first short term target of 5000 has been achieved today.

The target range between 5000~5100 is still open. It does seem that the historic supply line is now giving support.

Shorts? It is again very humbly suggested to avoid them at this stage. There will be plenty of time to short later, when the market gives us a convincing signal.

Once more, I reiterate my slogan, plan your trade and trade happy.

Nifty for 26 Sep 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 simple strategy of keeping a trailing stop has given us an additional few points on the Nifty. For a market like this, it is again suggested not to try and catch the tops or bottoms but to keep raising stops as per our comfort levels, and allow the market to exit us, rather than to exit prematurely.

The target range between 5000~5100 is still open. It also seems that the historic supply line may now give support.

Shorts? It is again very humbly suggested to avoid them at this stage.

Once more, I reiterate my slogan, plan your trade and trade happy. It is all in the mind.

Nifty for 25 Sep 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 analysis is simple. It may be suggested to exit long positions on a close below 4875. This way, we do not exit prematurely, and yet are in the market, to take advantage of any possible up move.

Trade happy.

Nifty for 24 Sep 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 next target also seems upon us. It is placed at around 5000. However, it does seem that even this target would be swept aside. As is normally the norm of the market, the targets are exceeded by a bit, so we may see a short term top around 5100.

This calculation is in keeping with the market movements for the last few days.

Was I wrong about the cycle in time? No. As has been often repeated, a cycle in time is just that, a projection of time. A window of a day or two may be granted, as emotions in the stock market cannot be dictated by mathematics.

At this stage, any other suggestion seems redundant; expect to keep tight stops to exit profitable positions.

Shorts? It is again very humbly suggested to avoid them at this stage.

Nifty for 21 Sep 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 chart says it all.

The cycle in time is now upon us. Monday could possibly be a short term high. The stress is on the word possibly. Could it be a major top? The odds are not in that favour. It does seem that we may have another major move up. But possibly after a correction.

As was suggested on Thursday, at this stage people would be tempted to short. To those people, all I can suggest that trying to catch tops or bottoms is a luxury which disciplined traders had better avoid. The business of trading does not earn money by “predicting” tops or bottoms. But to decide what the trend is and to take a slice of the action, by trading in the direction of the trend.

Please stay alert for a short term bearish pattern, as shown on my Blog. The link is on the right panel.

Nifty for 20 Sep 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.

After a breakout is sustained, for a day, it seems logical to draw up the next mathematical target. This time it falls around 4860. Our anticipated high closing for the derivatives expiry this month has come true.

With many short term cycles coming into play, the next two trading sessions, Friday and Monday, would be important. Monday could possibly be a short term high.

At this stage people would be tempted to short. To those people, all I can suggest that trying to catch tops or bottoms is a luxury which disciplined traders had better avoid. The business of trading does not earn money by “predicting” tops or bottoms. But to decide what the trend is and to take a slice of the action, by trading in the direction of the trend.

I think that I should stop carrying my traders’ anthem, “Plan your trade, and trade happy”. People have read it so many times that they have become immune to it.

Nifty for 19 Sep 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.

Phew!!! Finally the market has obliged this humble analyst.

With a gap up opening through a short term target, no further analysis is necessary, except reiterating that the market is indeed bullish.

Just yesterday, it was suggested that … “In fact, we just seem to be entering the bubble stage, where the corner pan walla also becomes a stock market analyst.” Today seems the beginning of the bubble stage.

It was suggested two weeks back that we may encounter a cycle in time on 24 September. This could possibly be a short term high.

No other words seem necessary except that these humble musings may have helped some readers to make some money. Except a major word of caution. Please do not get carried away by the tidal wave. Please keep your feet firmly implanted on the ground, plan your trades and trade happy.

Nifty for 18 Sep 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 proved this humble analyst wrong again. It was anticipated that the 4450 level could be broken on the downside. The market has proved otherwise.

The short term trend is still up. In fact, the short term trend has reiterated its bullish behaviour today, by making a short term pivot.

There was some comment asking when we can short the market. At the risk of sounding offensive, I could suggest that the questioner must be daft, thinking of shorting the market when the trend is up. It has been suggested time and again that we could ride the trend rather than try and swim against the current. In my last 219 posts, spread over almost fifteen months, I do not remember having said at any time that the main trend is down.

In fact, we just seem to be entering the bubble stage, where the corner pan walla also becomes a stock market analyst. The market is not going to move one way. It is going to have its bad days and good days. It may be suggested to buy on dips.

Trades could be placed in the direction of the main trend.

Plan your trades and trade happy.

Nifty for 17 Sep 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.

Here is what was suggested on Friday. “The probable direction is still bullish, and we may see some small downside.”

So far, the short term trend is still up. We could classify the short term trend to remain up till the yellow band of ~4450 is held up. As of now, it does seem that the 4450 level could be broken on the downside. However, it also seems that the correction may not be very deep.

The much talked about USA interest rate cut on Tuesday, seems to be spooking the market just a tiny bit. However, since the news based event is a non event on the face of it, we could just see that market brushing it aside as a non event.

The main trend is still up, and trades could be placed in the direction of the main trend.

Plan your trades and trade happy.

Nifty for 14 Sep 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 yesterday that “the next move could be really fast and furious. As of now, the possibility of the future direction is changing to up.” The market has indeed showed that it is supreme, and trapped the stops of bears, who were hoping that this would be the final frontier.

It is getting very dicey for a trader here. A huge gap up opening does not allow a positive close? It is something to ponder about. What it tells us that the market is still unsure of the direction. The probable direction is still bullish, and we may see some small downside.

In such an event, it can again be suggested that any dips may be used to buy in. We must keep our stops to avoid disastrous loss of capital. A short term stop could be a close below 4440.

The main trend is still up, and trades could be placed in the direction of the main trend.

Plan your trades and trade happy.

Nifty for 13 Sep 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 yesterday that “With the index refusing to move down, it is quite probable that we may even not see a deep enough correction.”

It is also true that the next move could be really fast and furious. As of now, the possibility of the future direction is changing to up.

For tomorrow, if the high of 4539 is violated on the upside, and if the low of 4452 is not broken on the downside, then we can expect the short term trend to change to up. If none of these levels are broken, then the trend would remain sideways. As of now, the Nifty still seems to be consolidating rather than correcting.

The projected downside target of around 4300 now looks like a low possibility. In any case, any dips may be used to buy in. We must keep our stops to avoid disastrous loss of capital.

The main trend is still up, and trades could be placed in the direction of the main trend.

Plan your trades and trade happy.

Nifty for 12 Sep 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 we can see, for the last few trading sessions, the Nifty has moved in a tightly coiled range of about 100 points. When a trading range of 100 points in one day is normal, the market is telling us something. It is suggesting that it does not want to move fast now, but later, when it moves, the directional move could be explosive.

With the index refusing to move down, it is quite probable that we may even not see a deep enough correction.

The short term trend is still down. As far as deciding about the short term trend is concerned, our levels of yesterday still stand. For tomorrow, if the high of 4539 is not violated, and if the low of 4452 is broken on the downside, then we can expect the trend to continue down. If none of these levels are broken, then the trend would remain sideways. As of now, the Nifty still seems to be consolidating rather than correcting. It could gather more downside momentum within a few days.

The projected downside target of around 4300 still stands. These dips may be used to buy in. Of course, without saying, we must keep our stops to avoid disastrous loss of capital.

The main trend is still up, and trades could be placed in the direction of the main trend.

Plan your trades and trade happy.

Nifty for 11 Sep 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 short term trend is down. For tomorrow, if the high of 4539 is not violated, then we can expect the trend to continue down. As of now, the Nifty seems to be consolidating rather than correcting. It could gather more downside momentum within a few days.

With some simple maths, we project a downside target of around 4300. These dips may be used to buy in. Of course, without saying, we must keep our stops to avoid disastrous loss of capital.

A sharp eye may also be kept on the coloured zones which are historical support levels. As of now, the market is just making nervous traders even more jittery. With gap up and down opens, it does not allow a normal trader to settle down comfortably.

The main trend is still up, and trades could be placed in the direction of the main trend.

Plan your trades and trade happy.

Nifty for 10 Sep 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 down move may be attributed to the hype associated with the 9/11 landmark in history. As was expected, the trend was weak for the end of day analysis. However, due to the gap down, we saw a fantastic recovery for the day. The Nifty has reached a historic supply line again. It could be expected to receive resistance around those levels.

Going ahead, we could expect some more weak bulls to be shaken out in a correction lasting just a few days. Today, the longer term perspective may be viewed. The next objective lies between 4680~4690. In that case, the Index may well make a new historic high later. How much time it takes is anybody’s guess. However, I could hazard a guess for it to be around the expiration of this derivatives cycle.

It may be suggested to just start accumulating around the 4350~4400 level. We need to choose the sectors carefully as we see the IT sector being weaker, but the Banking sector stronger than normal.

The main trend is still up, and trades could be placed in the direction of the main trend.

Plan your trades and trade happy.