Nifty for 11 Jan 08

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 ... “Tomorrow being a weekend, we may see support coming in around the 5900 levels, and then short covering may allow the Nifty to recover quickly. The Bank Nifty still indicates to be among the stronger sectors.” The recovery in the Index was largely contributed to by the Banking sector.

Well … the 5900 levels were not achieved but we did come 100 points near it. After today, the questions arises … How do we trade this?

I simple glance at the chart will show us that the short term price is moving down more than it is moving up. On the other hand, if we step back, we still see that the previous bottom of 6060 has not been violated. At this point in time, it is apparent that this is a short term downside move within the secular upside move.

As suggested earlier, today’s upwards retracement could be due to short covering. Thus we could anticipate one more down move. If, however, the Nifty moves higher than 6350, it would mean that the correction is over, and the Nifty has resumed its upward secular trend.

It is also true that the earnings announcements will motivate knee jerk reactions, thereby increasing intra day volatility. Therefore, it would be a good idea to work with hedging.

Trade happy after planning your trade.

Nifty for 10 Jan 08

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.

According to the analysis yesterday, it was suggested that the market is readying to correct. And it does seem that the correction has started. The cycle in time mentioned earlier was on 13 January. It does seem that the market has jumped the gun by a few days.

Maybe readers would get tired of reading the same words again and again. However, it does seem appropriate as a reminder, that we are in a long term bull market, and we would see many short and intermediate term moves counter to the main trend. These dips may be used to buy in.

Tomorrow being a weekend, we may see support coming in around the 5900 levels, and then short covering may allow the Nifty to recover quickly. The Bank Nifty still indicates to be among the stronger sectors.

Trade happy after planning your trade.

Nifty for 09 Jan 08

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 neither here nor there day. In fact, the Sensex had made a new historic high, but on the other hand, the Nifty did not.

When the market itself is uncertain, it is better to be defensive rather than offensive. Therefore it would be prudent to stay long while maintaining the stop at a closing below 6220, as suggested yesterday.

The overall profit booking seems to have subdued as of now. There has been a major decline in the totally traded volumes on both the exchanges. Which also suggests the uncertainty of the market.

Status Quo.

On the last note ... India is not US, and US is not India. Knee jerk reactions between the USA and India markets will happen on a day to day basis.

I urge readers to look at the long term picture.

Trade happy after planning your trade.

Nifty for 08 Jan 08

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 potential target zone which I have been carrying for the last few days seems just around the corner. Is it going to be a case of so near yet so far?

Today has been a classic case of overall profit booking on most sectors while the IT sector has witnessed buying interest, which is propping up the Index. Today’s move also validates the support zone which has been carried on the earlier charts. Even though today was a weak day, it still does not show a short term bearish bias on the Index. Therefore it would be prudent to stay long with a stop at a closing below 6220.

However, due to the overall profit booking mood, it does seem that we may see a downside correction for a few days. We notice that during the last three months, all the corrections have been shorter in nature than the earlier ones. It may be expected that this overall trend continues. However, please do not initiate any trades on assumptions but on cold hard facts. Look out for a short term bullish pattern before initiating any long trades.

Trade happy after planning your trade.

Nifty for 07 Jan 08

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 previous high of ~6200 and the second congestion around that zone now seem to be lending a supporting hand to the Nifty.

In spite of today’s weak opening, that seems to have held out. Therefore, it is logical to assume that this trend should continue. In such a case, this would also be an ideal place to insert a trailing stop, with a close below 6200.

As mentioned earlier, it is always advisable to stay with winning sectors rather than hope that the losing sectors would turn up. There are signs of profit booking showing. That is the reason why we are witnessing higher than usual intraday volatility. It may be a good idea to maintain stops for the present time. Since the uptrend is so strong, shorting seems out of the question as of now.

We are also seeing a cycle in time around 13 January. It is possible that the Nifty may make a decisive move around that date.

Trade happy after planning your trade.

Nifty for 04 Jan 08

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 last post of the last year, I had mentioned that the Nifty may achieve just 6245. However, as is apparent on the chart, it paused very slightly on that level and then just rushed through.

In any case, it is still hovering around that 6245 level. We see huge sector rotation happening. The Bank Nifty was correcting in a small way today. The CNXIT index is truly weak, while other sectors were pushing the Index up to new heights.

Mainly led by the Metals and the Oil and Gas sectors. The manner in which the Index has shot up today suggests that the next range of targets is not far away. Yet, at this stage, I would inject a word of caution. The Index is showing greater than normal volatility. The reason for this seems the profit booking is on in various sectors. This could burn a few holes in short term trader’s pockets.

On the other hand, from a really longer term perspective, if this rising triangle breaks out, the sky is the limit for the Nifty. Well not exactly the sky, but we could see the 8000 mark on the Index.

Trade happy after planning your trade.

Nifty for 31 Dec 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 quite some time since I last posted. In my last post, it was suggested the market could make a short term top due to the cluster of time cycle between 13 to 16 December. It did.

It was also suggested that an up and down roller coaster could continue till 21 December. It did.

Also, as was suggested, that the “warehousing fever” could start around the last week of this month. It did.

It is reward enough for this humble analyst that readers could have made opportune exits and then re-entries based on my earlier suggestions. Looking ahead, the market is pausing at a previous target which provided resistance earlier too.

The market is now poised delicately. It does seem that the previous top will be broken. How far will it break? This time I do not anticipate a large margin. The anticipated level it could achieve is 6245. After that we could see a correction. Be on guard.

Have a good year ahead. Not a greedy one.

Trade happy after planning your trade.

Nifty for 13 Dec 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, we are approaching a cluster of time cycle between 13 to 16 December. It does seem that the market has made a short term top today.

This up and down roller coaster could continue till 21 December.

From a trading perspective, the trailing stop is marked out on the chart. This could be used by readers to lock in profits. This is not an invitation to short. As was suggested some time earlier, let us learn to trade with the trend. Normally at this time of the year, the big players are planning on taking their Christmas vacation.

This leaves markets all over the world, vulnerable to manipulation on small volumes. Therefore, it may be advisable to sit on the sidelines till the “warehousing” fever starts, where our local players begin to accumulate stocks in the anticipation that the FIIs would start their activities after the New Year.

Trade happy after planning your trade.

Nifty for 12 Dec 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, there was some panic buttons hit on the open, with a gap down opening. However, the market was resilient enough to recover right from the word go, and has hit a short term objective which we have been seeing on my charts for a long time.

When a mathematical objective is achieved, it is logical to seek the next probable objective. That falls around the 6400 to 6450 levels. The time cycle of 13 to 16 December is just around the corner. Therefore, we as traders should remain on guard for some volatility.

Maybe … the market may make a short term top around these dates.

The Nifty still does not seem to have peaked. We could retain our long term bullish outlook, and it may be suggested to buy on dips.

Trade happy after planning your trade.

Nifty for 11 Dec 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 precisely a week back that the market is waiting for the news based event viz. the expected rate cut in the USA. And during this week, the market is playing itself out, discounting the expected event. When the news comes in, we can expect one of two things.

The rate cut happens.

The rate cut does not happen.

If the rate cut happens, the market has already expected it and has already factored that expectation in the price. In that case, it will be business as usual. We can expect some profit booking to the “expected” news.

However, if it does not happen, then we can expect some panic buttons to be hit. In such a scenario, it is always advisable to keep tight stops.

It was also suggested last week that …. “we have a short term time cycle falling tomorrow i.e. 5 December. A longer term cycle falls between 13 and 16 December. Let us wait and watch and see what the Index does on these days”.

Maybe … the market may make a short term top around these dates.

The last word. The Nifty still does not seem to have peaked. In such a case, we could retain our long term bullish outlook, and it may be suggested to buy on dips.

Trade happy after planning your trade.

Nifty for 04 Dec 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.

Not much needs to be said of yesterday’s chart. It has broken out from the yellow zone.

It is a sign of bullishness which we have discussed since a fortnight.

Today the Nifty has showed some hesitation at a psychological level which was an earlier target level. The market is hesitating for a very simple news driven event. The rate cut to be announced on 11 December in the USA.

Till then, it is expected that the market could meander a little aimlessly. In any case, the direction is expected to remain upwards. For bullish positions, the trading stop could be suggested at 5600. However, the yellow zone which has been applying resistance earlier could be expected to give a short term support. And may be pierced slightly on the downside.

There is speculation also that the BIG players are buying the Nifty futures and selling stocks. Ultimately, it all boils down to one thing. The tail can wag the dog for a short period. In the final countdown, the dog owns the tail.

We have a short term time cycle falling tomorrow i.e. 5 December. A longer term cycle falls between 13 and 16 December. Let us wait and watch and see what the Index does on these days.

Trade happy after planning your trade.

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.