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.

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.