Nifty for 19 Oct 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 a few days since I updated my blog. Nevertheless, nothing has changed since. The trend remains up. In fact, the first two charts are those of Friday the 13th, when the market gapped up.

The gap created last week, was tested today. Successfully, I may add. The gap is still open. I would seriously sit up and take notice only when the gap would be closed. That would tell me that the market is now facing pressure from the bears. As things stand today, the bulls already in the market, do not want the sidelined bulls to enter at lower levels. As a result, their endeavour will be not to allow the market down.

It was amusing to see a flurry of messages that shorting time has come. To those “top pickers”, I would very humbly suggest to wait for a confirmation of weakness, rather than try and sell at the market top.

Nifty for 11 Oct 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 has been consistently suggested over the last week or so, the extreme short term trend has been biased down, while the intermediate trend is still up. The patterns forming on the Nifty hourly chart are also suggesting the same.

If the bottom of today holds, then it is forming a triangular consolidation pattern, which suggested that the bulls do not want to allow the would be bulls to enter at lower levels.

The highs of the last few days has also been violated, which I do not interpret as an extremely bullish sign, as this stage. It seems that the stops of the bears have been run today. Soon another foray of bull stop running may also occur.

In any case, from this price action of the Nifty, it does not seem that the previous bottom of 3510 is going to be violated. In fact, I am assuming that the lowest the Nifty would see at this stage is 3530.

Therefore, it is suggested to plan your trades according to that.

Nifty for 10 Oct 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.
There still seems nothing more to add from yesterday’s analysis. The extreme short term trend is still down. The intermediate and long term trend is still up.
For longs, I would like to place my stops a little below 3510.
This type of volatile market will give jitters to both bulls as well as bears. How do we trade this market then? I have three options. (i) Enter at lower levels, (ii) short at higher levels, or (3) stay away.
We need to plan our strategy according to the time frame of our choosing and risk appetite. That is the basic essence of trading this volatile time.
And keep in mind, I still maintain that the probability still remains upwards.

Nifty Analysis for 09 Oct 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 extreme short term trend is still down. However, if we step back just a little, we could notice a sideways correction, which is in the nature of consolidation.

Apart from this, there seems nothing more to add from Friday's analysis.

Quite a few people have contacted me directly on chat, saying that I am a fool, and I do not know the meaning or interpretation of certain technical patterns.

It does happen that we fall into the “classic pattern” syndrome. I would only suggest readers to please keep your mind open, and be prepared for any eventuality.

And keep in mind that the probability still remains upwards.

Nifty for 5 Oct 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.

I am human, and I was positively exultant when the market opened with a gap up. However, after I sit back and look at the chart at the end of the day, I need to plan my day ahead.

Stepping back a little, we must take note of the fact that the Nifty has run into the resistance zone. The probability is extremely high that the Index would indeed continue its upward journey. But we must be prepared for any eventuality. A stop for longs could be placed slightly below the low of yesterday.

Those among us, who are short, could wait for the marked out level, where most of the stops are going to be bunched together. However, I would not suggest readers to be short, as the Nifty has made a short term bottom, which is much higher than yesterday's low.

Prepare the fireworks for Diwali.

Nifty for 4 Oct 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.

I have received many congratulatory messages both on the forums which I post on, and also in my mailbox.

Also, many messages have asked me what we should do next. For all those messages, I would thank each individual for their very kind words. Also through this medium, I would like to re-iterate that I am not in the habit of giving specific stock recommendations.

Also … I would like to caution bottom fishers not to get carried away by the “accuracy” of my projected levels.

All you need to do is to allow the market to tell you that it has indeed bottomed. Allow a higher bottom – higher top to be established, and then only go long.
If you ask me what my personal gut feel is? Yes, the Nifty should resume its upward trend from tomorrow onwards. All said and done, I am only a human being, and I could be mistaken.

Nifty as on 3 Oct 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 at last taken a breather. Which was expected. My stop for long has been triggered. Even so, the relevance of the short term support level is reinforced by the number of times that the Nifty has managed to claw back from lower levels. I am expecting this short term move to touch the 3530 levels. Normally, these short term technical levels are overshot mildly. Therefore, a level of 3515 would be a good level to watch out for. I am preparing to go long tomorrow or the day after, if and when I see the Nifty take support there.

Taking a look at individual stocks, we do not find any panic selling, and a mixed behaviour in some sectors. Which leads us to believe that there is going to be some sector churn leading up to the quarterly results.

It is at times like this, that some extra caution needs to be exercised.

Nifty as on 29 Sep 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 still making a steady upward pattern. Normally, on a short term scale, this pattern is considered extremely bullish, but not so after a steady rise.
There is not much more to add from Thursday's analysis. I still remain long. I had actually expected that my stop would be triggered. I was actually surprised that it was not. And from the pattern, the market is showing, it could go anyway.
I repeat, the market is not yet giving any signs of weakness, so why buck the trend and go short. Only die hard gamblers would attempt shorts at this point. Let the Nifty confirm weakness with a lower top and bottom, and shorting would be less riskier.

Nifty analysis for 28 Sep 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.
Oh Well, it was expected that there would be volatility today. On an intraday perspective the volatility was non existent. For derivatives expiration day, today could take the record for the least volatile day.
My stop has still not been triggered, so I still remain long, and now I still keep my stop at 3565. I actually expect that my stop would be triggered tomorrow. And I am prepared for it. My objective is not to try and beat the market, but to take my slice of the action.
The market is not yet giving any signs of weakness, so why buck the trend and go short? Only brace yourself for opportunities to go long.

Nifty Analysis for 27 Sep 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 purists among us will be extremely angry that the Nifty did not achieve the 3610 target. Does not matter. After all, the high was just 7 points away.
I am keeping a trailing stop of 3565 on the Nifty for long positions, as that coincides with two techniques. One is the 3568 intraday low, and the other is the rising trendline. Again people could question me saying that if I am so bullish on the market, then why keep such a tight stop?
Two reasons … one is that my short term target is achieved, and the second is … nothing prevents me from going long again at higher levels. For the present, my prime objective is to lock in my profits.
And take a new look at the Index, once this derivatives settlement is over tomorrow.
I am also marking out the stops which readers could adopt, depending on their own trading styles.

Nifty Analysis for 26 Sept 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 did give us a scare, and for some time, it seemed that our objective of 3570, mentioned in my analysis of 18 Sep 06, and again on Friday, will not be achieved.
Normally, a target is overshot, and this time, the Nifty has come out of a two day sideways consolidation pattern. Therefore, in all probability, this time too, the target of 3570 will be overshot handsomely.
After all, the 3610 target is not far away. And the way the Nifty is behaving, it looks like even this 3610 target will be overshot handsomely.
Obviously it may not be one way. But brace yourself for a nice ride.

Nifty analysis for 22 Sep 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 high of the Nifty is just 10 points away from our objective of 3570, mentioned in my analysis of 18 Sep 06.
Also as mentioned yesterday, bulls would need to adopt some more guts and withstand the bear onslaught. As expected, the bears tried to reach the 3500 levels stops, but today the bulls were stronger. The surprise today was the Bank Nifty, which corrected more than expected. Apart from that, everything still seems to be right on course. In all probability, if the 3570 levels are breached, then we could expect the 3610 level to be reached.
One thing which is noticeable is that the volumes on the Nifty futures are rising when the Index is falling, which should give comfort to bulls.
Please remember, the weekend normally tends to skew things slightly out of shape.

Nifty as on 21 Sep 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 some of the comments which I read, it does seem that folks have indeed made the right decisions, at the right time. The Nifty is fast approaching our objective mentioned in my analysis of 18 Sep 06.

http://dusant.blogspot.com/2006/09/nifty-analysis-for-18-sep-06.html

Also as mentioned yesterday, the bears were waiting for a decisive breakout with their stops. As soon as those stops were triggered, the market cooled off and returned to consolidation mode.

Now another game is going to be set up. The market will now probably try and chase the stops of the bulls. Those stops are going to be around the 3500 levels. Therefore, bulls will need to adopt some more guts and withstand that onslaught.

Although I do not pay much attention to fundamental information, from what news is filtering in, it does seem that Diwali is going to be bright.

Nifty Analysis for 20 Sep 06

These are my personal musings. These are not in any way meant to be trading advise. The technical problem about the charts still does not seem to be resolved. The chart ... therefore ... is uploaded here.

http://img291.imageshack.us/my.php?image=200906fibretraceandprojos6.png]

There is one thing which I abhor saying is “I told you so”. Trading is only a matter of planning a trade and then trading that plan. Yesterday, a trading plan was presented, suggesting that long positions could be initiated, if the hourly Nifty chart showed a higher top and higher bottom formation.

Today, the Nifty gave enough opportunity for going long. The first hourly candle engulfed yesterday's black candle body. The second was enclosed between the high and the low of the first, with a long lower shadow. The third again made a higher top and bottom.

What more does a trader need to go long?

We have seen some short term bears being trapped at the breakout of the H&S trendline. Some longer term bears would still be waiting for higher stop. On an extreme short term basis, the Nifty has made a lower swing bottom yesterday, and has not as yet made a higher swing top today. Technically, this should still be termed as a downside correction. However, a break above yesterday’s high could allow the Nifty make another consolidation pattern, like an expanding triangle.

Whatever the direction the market takes, one thing is sure. In volatile times likes this, the premiums of options tend to inflate. Therefore, selling options could turn out quite profitable, whatever direction we want to adopt.

Nifty Analysis for 19 Sep 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. Due to technical reasons, I am unable to upload the chart at this blog today.
Yesterday, it was suggested that the conventional indicators were showing negative divergence and there was a strong possibility that the Nifty could correct downward. The trigger seems to be the news of a hedge fund collapsing. These sorts of panic triggers are unavoidable in the market, and therefore, it was suggested that tight stops should be adhered to and a hedge be created at higher levels. This could also be termed as a failure of the pattern.
http://www.traderji.com/58968-post49.html
http://dusant.blogspot.com/2006/09/nifty-analysis-for-15-sep-06.html
In fact, those among us who have guts of steel could use this opportunity to create fresh longs. The only conditions being that the temptation of bottom fishing should be avoided at all costs, and to allow the Nifty to make a convincing higher top/higher bottom pivot on the hourly charts.
At this point, the bottom of the inverted head also assumes huge importance, as that should act as a support in case this bull run should continue.

Nifty Analysis for 18 Sep 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 loose inverted head and shoulder pattern seems to have been completed. The Nifty today did make a higher top also. The conventional indicators are now showing some negative divergence. Therefore, there is a strong possibility that the Nifty could correct downward from here. The Nifty futures volumes seem to be drying up, primarily because of the lack of volatility. There has not been enough upward or downward movement to allow stops to be triggered, either of the bulls or the bears.
A breakout of the H&S gives us a logical target, somewhere in the region of 3610, but on the other hand, there is a Fibonacci Level which falls around the 3570 level. Let us see how much strength is exhibited by the Nifty and when it is achieved.

Nifty Analysis for 15 Sep 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 was mentioned yesterday that the sideways consolidation was an indication that the Bulls were about to move in slowly. The hourly chart shows a loose inverted head and shoulder pattern. The head was where the over leveraged bulls exit in panic.
The Nifty playing around in a tight zone between 3430 and 3480 does suggest that the Bulls now do not want to allow the “would be” bulls to enter at lower levels. At times like this, it is advisable have a hedged strategy with a long viewpoint, and sell a hedge at higher levels, just in case our analysis turns against us.
Looking at a few Nifty components, it does seem that the software stocks will now lead the Nifty to higher levels.
Enjoy the ride.

Nifty as on 14 Sep 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 seems to be making the right bullish noises. Even though, on the hourly charts, the immediate short term trend is down, the intermediate trend is still up. Today, it kept hammering away at the down sloping short term trend-line, trying to break out upwards. The selling pressure, however, managed to restrict it from moving up. The volumes on the Nifty Futures were pretty low because of the lack of volatility and the ranged movement for the whole day today.
From a short term technical point of view, this sort of sideways movement normally allows most conventional indicators to move down, which allows the market to get oversold. This allows the market to rebound, and continue its longer term direction once the consolidation is over.
As of now, it looks like India is going to have a very bright Diwali.

Nifty Analysis 13 Sep 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.
Aah … the pleasure of being on a vacation.
I have been following the Nifty for the last month, but have not really hammered out the various levels. The fact is that the Nifty has been consistently making higher tops and bottoms since the last week of July. Therefore, it is easy to make a blanket statement that the mood is bullish. Since late July, for the first time, it has made two lower tops. And a lower bottom since its previous swing low. This action would put a lot of doubts in traders’ minds, whether or not, the mood is going to remain bullish or not.
If we see a higher bottom respecting an earlier significant bottom, we should conclude that the mood is indeed continuing bullish, and the Nifty is attempting another foray at clearing the 3480 hurdle.This conclusion also comes from the fact that most Nifty components are not displaying much weakness, and in fact, the banks seem to be gaining in strength.

Nifty Index updated on 18 August 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 maintained its status quo, without much movement either way. On the extreme short term focus, the trend is still up. If we step back slightly, the daily chart is showing two uncertain candles, a star and a doji. If we step back even further, the weekly chart is showing an extremely bullish candle.

The rising window of Wednesday is still open.

A classic consolidation pattern going on.

On Thursday, we saw that the FIIs have been net sellers in the derivatives segment, whereas, huge money was pumped into the cash. This could lead us to assume that the action is now going to shift from the index stocks to the mid-caps, and small-caps.