Do not catch the falling knife As discussed a couple of days ago, breakdown on the nifty was just round the corner, and it confronted us yesterday. We had also warned about a fast fall below 4980 and it turned out exactly that way. The whipsaw again took its toll in between, with a non trustworthy rally till 5160. Today, again given the global cues, the opening is likely to be weak.1) The Elder Ray readings : Bull Power reduces from +108 to +19, Bear Power increases from +50 to -132, indicating that the Bulls are down but not out yet. Also the Bears have gone too far too fast.2) The moving averages have started pointing downwards, indicating a continuation of the medium term bearishness in the Nifty. The 8,13 and 21 EMAs have now converged in a 10 point zone indicating indecision.3) The fast stochastics have gone too far into the oversold zone, with the slow stochastics still halfway down the road. The ATR has regained the levels of 110 indicating high volatility expectations.4) In the above chart, the MACD has started reducing, but still is in the positive territory. The ADX has not yet confirmed a fresh sell signal.5) Looking at all the above, we expect a negative opening for the day. We also expect that the bulls will try to fill the down gap formed by the negative opening, and our trading plan will be based on these expectations.6) Our Trading plan for the day a) We will avoid taking fresh positions in the nifty for the first 30 minutes. However, we will be ready to cover our carry forward short positions around 4840.b) If the Nifty continues to trade below the opening, then keeping the slow stochastics in mind, open fresh shorts with a SL of 20 points above the opening mark, and a target of 80 points below the opening.c) if the nifty crosses the opening mark and trades above it, we will open fresh longs with a SL just below 20 points on the opening mark and with a target of 4920. If the risk reward ration is not more than 1:3 then we will avoid this trade. Above 4940, we will add to our long positions with a target of 4990.Happy Trading For cash market recommendations see our Daily Pre Market calls on NSE
Do not catch the falling knife
As discussed a couple of days ago, breakdown on the nifty was just round the corner, and it confronted us yesterday. We had also warned about a fast fall below 4980 and it turned out exactly that way. The whipsaw again took its toll in between, with a non trustworthy rally till 5160. Today, again given the global cues, the opening is likely to be weak.
1) The Elder Ray readings : Bull Power reduces from +108 to +19, Bear Power increases from +50 to -132, indicating that the Bulls are down but not out yet. Also the Bears have gone too far too fast.
2) The moving averages have started pointing downwards, indicating a continuation of the medium term bearishness in the Nifty. The 8,13 and 21 EMAs have now converged in a 10 point zone indicating indecision.
3) The fast stochastics have gone too far into the oversold zone, with the slow stochastics still halfway down the road. The ATR has regained the levels of 110 indicating high volatility expectations.
4) In the above chart, the MACD has started reducing, but still is in the positive territory. The ADX has not yet confirmed a fresh sell signal.
5) Looking at all the above, we expect a negative opening for the day. We also expect that the bulls will try to fill the down gap formed by the negative opening, and our trading plan will be based on these expectations.
6) Our Trading plan for the day
a) We will avoid taking fresh positions in the nifty for the first 30 minutes. However, we will be ready to cover our carry forward short positions around 4840.
b) If the Nifty continues to trade below the opening, then keeping the slow stochastics in mind, open fresh shorts with a SL of 20 points above the opening mark, and a target of 80 points below the opening.
c) if the nifty crosses the opening mark and trades above it, we will open fresh longs with a SL just below 20 points on the opening mark and with a target of 4920. If the risk reward ration is not more than 1:3 then we will avoid this trade. Above 4940, we will add to our long positions with a target of 4990.
Happy Trading
For cash market recommendations see our Daily Pre Market calls on NSE
Nifty in "No Man's Land" yet Yesterday, we had discussed that the Nifty is dangerously close to the near term resistance of 5170. Nifty never crossed that threshold. However, the Bears were not able to take down the Nifty even once below the support level of 5100. Today, considering the weak global cues, the Nifty is likely to open lower. But the tug of war continues. 1) The Elder Ray readings - Bull Power increased from +102 to +108. Bear Power decreased from -12 to +50. Indicating that Bulls have stopped for re-energizing whereas the Bears are still regrouping. 2) The 30 DMA has started to flatten out from a falling line. The 8EMA has now crossed over the 21EMA signaling advantage for a upward movement. However, this trend has to sustain, at least consolidate, before it gets confirmed.3) The stochastics are well in the overbought region, indicating that a heavy supply is just round the corner.4) In the above chart, MACD and ADX are showing that Bulls are in control. But the Nifty has found resistance at 20EMA.5) Our plan for the day: Given the weak global cues, we expect the Nifty to open weak. We expect the Nifty to take support near the 50EMA around 5070 and resistance around 5170.a) Go long on Nifty at 5080 with a SL of 5060 and a target of 5140. Keep booking interim profits. Add to longs above 5170 for a target of 5220b) Go short on Nifty at 5160 with a SL of 5185 and a target of 5110. Add to shorts below 5060 for a target of 4990. Book interim profits.Happy Trading. For cash market recommendations see our Daily Pre Market calls on NSE
Nifty in "No Man's Land" yet
Yesterday, we had discussed that the Nifty is dangerously close to the near term resistance of 5170. Nifty never crossed that threshold. However, the Bears were not able to take down the Nifty even once below the support level of 5100. Today, considering the weak global cues, the Nifty is likely to open lower. But the tug of war continues.
1) The Elder Ray readings - Bull Power increased from +102 to +108. Bear Power decreased from -12 to +50. Indicating that Bulls have stopped for re-energizing whereas the Bears are still regrouping.
2) The 30 DMA has started to flatten out from a falling line. The 8EMA has now crossed over the 21EMA signaling advantage for a upward movement. However, this trend has to sustain, at least consolidate, before it gets confirmed.
3) The stochastics are well in the overbought region, indicating that a heavy supply is just round the corner.
4) In the above chart, MACD and ADX are showing that Bulls are in control. But the Nifty has found resistance at 20EMA.
5) Our plan for the day: Given the weak global cues, we expect the Nifty to open weak. We expect the Nifty to take support near the 50EMA around 5070 and resistance around 5170.
a) Go long on Nifty at 5080 with a SL of 5060 and a target of 5140. Keep booking interim profits. Add to longs above 5170 for a target of 5220
b) Go short on Nifty at 5160 with a SL of 5185 and a target of 5110. Add to shorts below 5060 for a target of 4990. Book interim profits.
Happy Trading.
For cash market recommendations see our Daily Pre Market calls on NSE
Can the Bulls maintain the momentum? The bulls made a good comeback yesterday, and have got the Nifty above 5120 and never really gave up any ground during the entire trading session. Having said that, they are now dangerously close to the near term resistance of 5170. Above that there is a huge unfilled gap between 5220 and 5320.1) The Elder Ray readings as of now - Bull Power has increased from +36 to +102, Bear Power has remained constant at -12. This indicates tough posturing between Bears and Bulls in coming sessions. Bulls have the current advantage.2) The 13EMA now has made a higher top giving a signal of tough times for the Bears. However the DMAs are still pointing downwards.3) The stochastics are now again in the overbought zone and it indicates a tough time for the Bulls to keep the Nifty afloat.4) In the above chart, Nifty is dangerously near the top of the Bollinger Bands and has found resistance at the 50 EMA. The ADX is signalling a upward rally on the cards. Clearly mixed signals those. Making a trading plan and trading that plan becomes extremely important.5) Our trading plan for the day. a) Wait for a break out above 5180 and then go long on the Nifty for 5220 with a SL just below 5160. Add to the longs above 5240 and stay long till 5320, with a SL of just below 5200. b) If 5180 is not crossed, then stay away from the Nifty, till 5100 is broken. Observe 5100 to 5180 as no trading zone. Below 5090 short Nifty with a SL of 5120 and a target of 5000.Happy Trading For cash market recommendations see our Daily Pre Market calls on NSE
Can the Bulls maintain the momentum?
The bulls made a good comeback yesterday, and have got the Nifty above 5120 and never really gave up any ground during the entire trading session. Having said that, they are now dangerously close to the near term resistance of 5170. Above that there is a huge unfilled gap between 5220 and 5320.
1) The Elder Ray readings as of now - Bull Power has increased from +36 to +102, Bear Power has remained constant at -12. This indicates tough posturing between Bears and Bulls in coming sessions. Bulls have the current advantage.
2) The 13EMA now has made a higher top giving a signal of tough times for the Bears. However the DMAs are still pointing downwards.
3) The stochastics are now again in the overbought zone and it indicates a tough time for the Bulls to keep the Nifty afloat.
4) In the above chart, Nifty is dangerously near the top of the Bollinger Bands and has found resistance at the 50 EMA. The ADX is signalling a upward rally on the cards. Clearly mixed signals those. Making a trading plan and trading that plan becomes extremely important.
5) Our trading plan for the day.
a) Wait for a break out above 5180 and then go long on the Nifty for 5220 with a SL just below 5160. Add to the longs above 5240 and stay long till 5320, with a SL of just below 5200.
b) If 5180 is not crossed, then stay away from the Nifty, till 5100 is broken. Observe 5100 to 5180 as no trading zone. Below 5090 short Nifty with a SL of 5120 and a target of 5000.
Happy Trading
For cash market recommendations see our Daily Pre Market calls on NSE
Fast fall below 4980 As discussed yesterday, the rally really seems to have exhausted. The Bulls never could get the Nifty above the opening mark of 5068, however, they very well defended 5000 for the day. Given the global market cues, the Nifty is slated to open weak, and the Bulls will have a tough task of keeping it in the green.1) The renewed Elder Ray Readings : Bull Power reduced from +112 to +36. Bear Power increased from +36 to -12. Indicates that the Bears have regained their breath and are now getting ready to strike, whereas the Bulls have exhausted their energy.2) The moving averages are not showing any signs of turning upwards, with the important 13 Ema forming a lower top.3) Yesterday, we had suggested that a close below 5040 might confirm a downtrend, and the Nifty closed at 5032 just below that level.4) In the above chart, MACD histogram is flattening. The ADX shows that the Bullish trend is falling and the Bearish trend is rising.5) Given the above, our reading is that the Nifty could well consolidate in a extremely narrow range of 4980 5030 for most part of the trading session. However, a fall below 4980 can accelerate the downtrend and 4930 4900 could well be tested today.6) Trading plan : Go short around 5015 with a SL of 5040 and a target of 4980. Add to shorts below 4960 with a target of 4920. Cut all shorts above 5050. No plans for going long for the day.Happy trading. For cash market recommendations see our Daily Pre Market calls on NSE
Fast fall below 4980
As discussed yesterday, the rally really seems to have exhausted. The Bulls never could get the Nifty above the opening mark of 5068, however, they very well defended 5000 for the day. Given the global market cues, the Nifty is slated to open weak, and the Bulls will have a tough task of keeping it in the green.
1) The renewed Elder Ray Readings : Bull Power reduced from +112 to +36. Bear Power increased from +36 to -12. Indicates that the Bears have regained their breath and are now getting ready to strike, whereas the Bulls have exhausted their energy.
2) The moving averages are not showing any signs of turning upwards, with the important 13 Ema forming a lower top.
3) Yesterday, we had suggested that a close below 5040 might confirm a downtrend, and the Nifty closed at 5032 just below that level.
4) In the above chart, MACD histogram is flattening. The ADX shows that the Bullish trend is falling and the Bearish trend is rising.
5) Given the above, our reading is that the Nifty could well consolidate in a extremely narrow range of 4980 5030 for most part of the trading session. However, a fall below 4980 can accelerate the downtrend and 4930 4900 could well be tested today.
6) Trading plan : Go short around 5015 with a SL of 5040 and a target of 4980. Add to shorts below 4960 with a target of 4920. Cut all shorts above 5050. No plans for going long for the day.
Happy trading.
For cash market recommendations see our Daily Pre Market calls on NSE
Rally seems to be exhausting The recent rally that started after a sharp drop of around 1000 points on Nifty to 4720 has now for the 3rd time tried to cross 5170 which till August had acted as a support and now seems to be an insurmountable resistance. Last week, both the Bulls and the Bears have been bruised badly and it seems that the Nifty will lose much of its volatility, which is much necessary for some sort of rally to continue.1) The fresh Elder Ray readings : The Bull Power has increased from +68 to +112 and the Bear Power has dropped from -55 to +36 suggesting advantage for the Bulls. However, the BullBear ratio reads at 11:87 suggesting Bears not giving up so easily.2) The simple moving averages will continue to drop, unless we have a good positive closing today. The 13 Ema is forming a lower top.3) The bearish downtrend will confirm only if today's close is below 5040. 4) Last week, both the Bulls and Bears have failed to cross over their trading ranges.5) In the above chart, the Bollinger Bands, the MACD and the ADX, all suggest that some rally is still potentially remaining. But this rally once tops out, could fizzle out fast.6) Today's trading plan : We will wait patiently for a topping out to happen and the Nifty to trade consistently 40 points below its day high. Once that happens, we will open new shorts with a target of DH - 80 points and a SL of the day high. If that does not happen, it will be a clear indication of a continued bull run, and we will wait for 5170- 5220 to be crossed, where above 5220 we will go long for 5320 and a SL of 5170. We will observe a no trading zone till then.Happy Trading For cash market recommendations see our Daily Pre Market calls on NSE
Rally seems to be exhausting
The recent rally that started after a sharp drop of around 1000 points on Nifty to 4720 has now for the 3rd time tried to cross 5170 which till August had acted as a support and now seems to be an insurmountable resistance. Last week, both the Bulls and the Bears have been bruised badly and it seems that the Nifty will lose much of its volatility, which is much necessary for some sort of rally to continue.
1) The fresh Elder Ray readings : The Bull Power has increased from +68 to +112 and the Bear Power has dropped from -55 to +36 suggesting advantage for the Bulls. However, the BullBear ratio reads at 11:87 suggesting Bears not giving up so easily.
2) The simple moving averages will continue to drop, unless we have a good positive closing today. The 13 Ema is forming a lower top.
3) The bearish downtrend will confirm only if today's close is below 5040.
4) Last week, both the Bulls and Bears have failed to cross over their trading ranges.
5) In the above chart, the Bollinger Bands, the MACD and the ADX, all suggest that some rally is still potentially remaining. But this rally once tops out, could fizzle out fast.
6) Today's trading plan : We will wait patiently for a topping out to happen and the Nifty to trade consistently 40 points below its day high. Once that happens, we will open new shorts with a target of DH - 80 points and a SL of the day high. If that does not happen, it will be a clear indication of a continued bull run, and we will wait for 5170- 5220 to be crossed, where above 5220 we will go long for 5320 and a SL of 5170. We will observe a no trading zone till then.
Happy Trading
For cash market recommendations see our Daily Pre Market calls on NSE
Nifty - Weekly Review The Nifty during the week, closed with a gain of about 25 points at 5084 after showing a weekly low of 4911 and a weekly high of 5144. This is about a 5th of the daily ATR of 115 showing that the Bulls are pretty exhausted at higher levels. On Friday, after the RBI monetary policy announcement, the volatility increased.
Quoting from our earlier post, on 12th Sept 2011,
the consolidation zone can be defined between 4950 and 5150, a 200 point range that is approximately twice the current ATR.We had also expected a whipsaw to occur within this range and had warned ourselves not to be a pig and get slaughtered.We believe, that this range will still act as major boundaries for both Bulls and Bears for the next week too, and any breach of this will provide for a new trend.The next week could be as exciting and we are looking forward to the same. Could be a more rewarding week, with no major local events on the cards. Though the events in US and Europe could lead us through global trends. It's a Fresh Week, and could be a rewarding one.Happy Trading. For cash market recommendations see our Daily Pre Market calls on NSEAcetylene Plant
Nifty - Weekly Review
The Nifty during the week, closed with a gain of about 25 points at 5084 after showing a weekly low of 4911 and a weekly high of 5144. This is about a 5th of the daily ATR of 115 showing that the Bulls are pretty exhausted at higher levels.
On Friday, after the RBI monetary policy announcement, the volatility increased.
Quoting from our earlier post, on 12th Sept 2011,
the consolidation zone can be defined between 4950 and 5150, a 200 point range that is approximately twice the current ATR.
We had also expected a whipsaw to occur within this range and had warned ourselves not to be a pig and get slaughtered.
We believe, that this range will still act as major boundaries for both Bulls and Bears for the next week too, and any breach of this will provide for a new trend.
The next week could be as exciting and we are looking forward to the same. Could be a more rewarding week, with no major local events on the cards. Though the events in US and Europe could lead us through global trends. It's a Fresh Week, and could be a rewarding one.
Happy Trading.
For cash market recommendations see our Daily Pre Market calls on NSE
Acetylene Plant
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Disclaimer : We express our opinions on this blog primarily as a method of record keeping, i.e. archiving what was our opinion about the markets on any given particular day end. As such, trading in derivatives can be extremely dangerous to you and your finances. We strongly advice you to consult your financial advisor before trading based on the opinions published on this blog. We shall not be held responsible, under any circumstances, for any financial loss or profit, that may be accrued due to your trades being affected by our opinions.
