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.