Expect the unexpected in whipsawing times It has been a month of huge whipsaw like movements on the Nifty during Sept 2011, and the whipsaw has taken its toll. We enter the fresh Oct 2011 series with the Nifty right in the center of the 4850 5150 range. The Sept series opened at 5840 and immediately established a low of 4720 on the same day. Post that it has achieved a series high of 5169 before closing at 5015. 1) The Elder Ray readings - Bull Power increased from 25 to 48 Bear Power increased from -63 to -80. Indicating a tug of war between the Bulls and Bears with no one ready to blink.2) The daily moving averages are still pointing downwards, whereas the EMAs (exponential moving averages) are flattening out. This indicates that we still could have a small Bullish uptrend within the overall downtrend, and opening any position should be done patiently.3) The stochastics, are right in the middle of the overbought and oversold lines. This also indicates that one should wait for a fresh trend to establish, before opening a position. However, whenever whipsaw like movements happen, it is more often the contradiction that works. As the trend changes very frequently, and goes very far to the other end. This makes following the trend extremely difficult and less rewarding.4) In the above chart, the MACD and the ADX, both are showing equal weight-age to the Bulls and the Bears, indicating that a fresh trend is yet to be established.5) Yesterday, both the FIIs and the DIIs have been nett sellers, indicating that the late afternoon rally was just due to short covering and roll overs. It should be noted that roll overs happen when only majority of the traders are sitting on a loss.6) Considering the above, and paying respectful attention to the dreaded whipsaw, we will wait for the Nifty to go near the range boundaries before opening any positions in the current series. Also to be noted is the fact that in such situations, tight stop losses won't work as the whipsaw can make large frantic gyrations.a) Near 5120 we will open a short position with a SL of 5200 (on a closing basis) and a target of 4920. We will cover our shorts if the closing is above 5200. We will add to our shorts below 5000 only. Till then if we are in profit we will trail our SL to 30 points above the day's low at that moment of time.b) Near 4910 we will look out for opening long positions with a SL of 4820 ( on a closing basis) and a target of 5150. We will add to our long positions above 5060For today 4945 is a strong support whereas 5085 is a strong resistance area. Happy Trading !!! For cash market recommendations see our Daily Pre Market calls on NSE
Expect the unexpected in whipsawing times
It has been a month of huge whipsaw like movements on the Nifty during Sept 2011, and the whipsaw has taken its toll. We enter the fresh Oct 2011 series with the Nifty right in the center of the 4850 5150 range. The Sept series opened at 5840 and immediately established a low of 4720 on the same day. Post that it has achieved a series high of 5169 before closing at 5015.
1) The Elder Ray readings - Bull Power increased from 25 to 48 Bear Power increased from -63 to -80. Indicating a tug of war between the Bulls and Bears with no one ready to blink.
2) The daily moving averages are still pointing downwards, whereas the EMAs (exponential moving averages) are flattening out. This indicates that we still could have a small Bullish uptrend within the overall downtrend, and opening any position should be done patiently.
3) The stochastics, are right in the middle of the overbought and oversold lines. This also indicates that one should wait for a fresh trend to establish, before opening a position. However, whenever whipsaw like movements happen, it is more often the contradiction that works. As the trend changes very frequently, and goes very far to the other end. This makes following the trend extremely difficult and less rewarding.
4) In the above chart, the MACD and the ADX, both are showing equal weight-age to the Bulls and the Bears, indicating that a fresh trend is yet to be established.
5) Yesterday, both the FIIs and the DIIs have been nett sellers, indicating that the late afternoon rally was just due to short covering and roll overs. It should be noted that roll overs happen when only majority of the traders are sitting on a loss.
6) Considering the above, and paying respectful attention to the dreaded whipsaw, we will wait for the Nifty to go near the range boundaries before opening any positions in the current series. Also to be noted is the fact that in such situations, tight stop losses won't work as the whipsaw can make large frantic gyrations.
a) Near 5120 we will open a short position with a SL of 5200 (on a closing basis) and a target of 4920. We will cover our shorts if the closing is above 5200. We will add to our shorts below 5000 only. Till then if we are in profit we will trail our SL to 30 points above the day's low at that moment of time.
b) Near 4910 we will look out for opening long positions with a SL of 4820 ( on a closing basis) and a target of 5150. We will add to our long positions above 5060
For today 4945 is a strong support whereas 5085 is a strong resistance area.
Happy Trading !!!
For cash market recommendations see our Daily Pre Market calls on NSE
Expect Nifty to drag in a nervous range As discussed a couple of days ago, a Relief rally did happen, but it turned out to be just that, a relief rally and nothing more. Today, given the global cues, we expect the Nifty to open lower and trade in the red zone for most part of the day. 1) The Elder Ray readings - Bull Power increased from -4 to +25 whereas the Bear Power reduced slightly from -82 to -62. Indicates that the bulls have just resurfaced while the bears have not yet given up.2) The moving averages continue to point downwards, suggesting that the downtrend would resume soon. 3) The stochastics are in no man's land are suggesting some consolidation in a narrow range.4) In the above chart, the MACD and the ADX are both suggesting indecision as of now.5) Considering the above, and also keeping in view that today is the last day of the current series, we will not have any positions on the Nifty for most part of the day.However,a) If the Nifty crosses 4980, we will open fresh shorts for the next month series, with a SL of 5030 and a target of 4820. We will add to our shorts below 4990.b) if the Nifty goes to 4820, we will try a long position for the next month series with a SL of 4780 and a target of 4890.Happy Trading !!! For cash market recommendations see our Daily Pre Market calls on NSE
Expect Nifty to drag in a nervous range
As discussed a couple of days ago, a Relief rally did happen, but it turned out to be just that, a relief rally and nothing more. Today, given the global cues, we expect the Nifty to open lower and trade in the red zone for most part of the day.
1) The Elder Ray readings - Bull Power increased from -4 to +25 whereas the Bear Power reduced slightly from -82 to -62. Indicates that the bulls have just resurfaced while the bears have not yet given up.
2) The moving averages continue to point downwards, suggesting that the downtrend would resume soon.
3) The stochastics are in no man's land are suggesting some consolidation in a narrow range.
4) In the above chart, the MACD and the ADX are both suggesting indecision as of now.
5) Considering the above, and also keeping in view that today is the last day of the current series, we will not have any positions on the Nifty for most part of the day.
However,
a) If the Nifty crosses 4980, we will open fresh shorts for the next month series, with a SL of 5030 and a target of 4820. We will add to our shorts below 4990.
b) if the Nifty goes to 4820, we will try a long position for the next month series with a SL of 4780 and a target of 4890.
Happy Trading !!!
For cash market recommendations see our Daily Pre Market calls on NSE
Volatile expiry to the September series expected As discussed yesterday, we saw a relief rally that extended till the end of session. The Bulls took control of the session right from the word go, and never did let off. However, they stopped just short of 4990 the crucial 13 EMA level. Today, being a crucial trading session, a in-depth technical analysis is imperative.1) The Elder Ray readings - Bull Power increased from -110 to -4 Bear Power reduced from -231 to -82. This indicates that although Bulls have regained some of their lost power, they are still not above the surface, and the Bears are down but not out, and both can drag the Nifty to a large extent.2) The moving averages are still pointing downwards, indicating that we are still in a medium term bearish trend. The Nifty yesterday stopped just below its 13EMA.3) The stochastics are in neutral territory, and can go either ways, suggesting confusion on further direction. The ATR has gained 4 points in a day and is now at 114, indicating increased volatility. 4) In the above chart, the MACD as well as the ADX is indicating indecision on part of both the Bulls and Bears. However, the ADX is suggesting a strong move either ways cannot be ruled out.5) Even the global cues are mixed and lack any sense of direction.6) Considering all the above, it would be better not to set any targets for the Nifty for the day. As a better trading strategy, we will buy 5100 Sept call and 4900 Sept put today after Nifty has moved about 60 points in either direction from 4970. This will limit our loss possibility and offer a handsome profiting opportunity.7) Later in the day, if the Nifty is still below 5000 but above 4950, we might consider opening a new short on the Nifty Oct series.Happy Trading !!! For cash market recommendations see our Daily Pre Market calls on NSE
Volatile expiry to the September series expected
As discussed yesterday, we saw a relief rally that extended till the end of session. The Bulls took control of the session right from the word go, and never did let off. However, they stopped just short of 4990 the crucial 13 EMA level. Today, being a crucial trading session, a in-depth technical analysis is imperative.
1) The Elder Ray readings - Bull Power increased from -110 to -4 Bear Power reduced from -231 to -82. This indicates that although Bulls have regained some of their lost power, they are still not above the surface, and the Bears are down but not out, and both can drag the Nifty to a large extent.
2) The moving averages are still pointing downwards, indicating that we are still in a medium term bearish trend. The Nifty yesterday stopped just below its 13EMA.
3) The stochastics are in neutral territory, and can go either ways, suggesting confusion on further direction. The ATR has gained 4 points in a day and is now at 114, indicating increased volatility.
4) In the above chart, the MACD as well as the ADX is indicating indecision on part of both the Bulls and Bears. However, the ADX is suggesting a strong move either ways cannot be ruled out.
5) Even the global cues are mixed and lack any sense of direction.
6) Considering all the above, it would be better not to set any targets for the Nifty for the day. As a better trading strategy, we will buy 5100 Sept call and 4900 Sept put today after Nifty has moved about 60 points in either direction from 4970. This will limit our loss possibility and offer a handsome profiting opportunity.
7) Later in the day, if the Nifty is still below 5000 but above 4950, we might consider opening a new short on the Nifty Oct series.
Happy Trading !!!
For cash market recommendations see our Daily Pre Market calls on NSE
Relief rally won't last much As discussed yesterday, the volatile downtrend continued with the Nifty opening lower and closing in the red. However, during the later part of the trading sessions, Nifty showed signs of bounce back, which did not last above 4880. Today, given the global cues, Nifty is likely to open with a nice gap up. But will this be just a relief rally and not more? Million dollar question that. Let us analyze things on the technical front.1) The Elder Ray readings : Bull Power reduced from -85 to -110 Bear Power increased from -185 to -231. This indicates Bears can puncture any rally at any time they choose.2) The moving averages now continue to point downwards. 3) The Stochastics have now just entered the oversold zone, and a relief rally cannot be ruled out.4) In the above chart, Nifty has taken support at the lower band of the Bollinger Bands, indicating some recovery. However, there is divergence in the MACD and the ADX which are prompting bearishness for the Nifty.5) Considering all the above, we will have to be cautious about opening any long positions. However, if we do not cover our overnight short positions in time, we could be in for a shock at the end of the day. So we have to be careful on that front too.6) FIIs have been nett sellers to the tune of 1300 crores yesterday. 7) Our trading plan for the day is to primarily act with caution and trade as little as possible and wait at least till mid session before taking any stance in the market. We may open fresh shorts around 4940 with a SL of 5010 and a target of 4800. We will refrain from opening fresh longs at least in the first 2 hours of the session.Happy Trading !!! For cash market recommendations see our Daily Pre Market calls on NSE
Relief rally won't last much
As discussed yesterday, the volatile downtrend continued with the Nifty opening lower and closing in the red. However, during the later part of the trading sessions, Nifty showed signs of bounce back, which did not last above 4880. Today, given the global cues, Nifty is likely to open with a nice gap up. But will this be just a relief rally and not more? Million dollar question that. Let us analyze things on the technical front.
1) The Elder Ray readings : Bull Power reduced from -85 to -110 Bear Power increased from -185 to -231. This indicates Bears can puncture any rally at any time they choose.
2) The moving averages now continue to point downwards.
3) The Stochastics have now just entered the oversold zone, and a relief rally cannot be ruled out.
4) In the above chart, Nifty has taken support at the lower band of the Bollinger Bands, indicating some recovery. However, there is divergence in the MACD and the ADX which are prompting bearishness for the Nifty.
5) Considering all the above, we will have to be cautious about opening any long positions. However, if we do not cover our overnight short positions in time, we could be in for a shock at the end of the day. So we have to be careful on that front too.
6) FIIs have been nett sellers to the tune of 1300 crores yesterday.
7) Our trading plan for the day is to primarily act with caution and trade as little as possible and wait at least till mid session before taking any stance in the market. We may open fresh shorts around 4940 with a SL of 5010 and a target of 4800. We will refrain from opening fresh longs at least in the first 2 hours of the session.
Happy Trading !!!
For cash market recommendations see our Daily Pre Market calls on NSE
Downward momentum to stay amidst high volatility As discussed on Friday morning, the Bear attack continues. The Nifty did open in down gaps, traded down to a support level of 4830, tried to fill the gaps with a high of 4930 and closed at 4868 with a 56 point loss on a day-to-day basis. Today too, the same pattern might be repeated. 1) The Elder Ray readings : Bull Power reduced from +19 to -85 Bear Power increased from -132 to -186 indicating that the Bears are in control and a breakdown on the Nifty cannot be ruled out.2) The moving averages especially the important 13EMA has now gone below the 8EMA indicating start of a fresh downtrend.3) The slow stochastics momentum indicator has still some distance to catchup with the fast counterpart, indicating more room for a further breakdown. 4) In the above chart, the MACD is in the positive but reducing. The ADX has generated a fresh sell signal. Remember, ADX signal is an advance signal and should be used patiently. The Bollinger Bands are flattening and indicating a support for the Nifty just below the 4800 levels.5) Since the ATR is expanding and volatility is also firming up, we will be required to stretch our stop losses from 35 points to 50 points. At the same time, we will also be required to stretch our targets from 60 points to 90 points on the Nifty. 5) Considering all the above, our trading plan for the day requires us to act very patiently yet swiftly during the course of the trading session. We believe that the Nifty will be ranged between 4780 and 4910.a) We will look out for opening fresh shorts near 4890 with a SL of 4940 and a target of 4800. We will cover all our shorts above 4940.b) We will look out for opening fresh longs near 4790 with a SL of 4750 and a target of 4890. We will not be long below 4750 at any cost.Happy Trading For cash market recommendations see our Daily Pre Market calls on NSE
Downward momentum to stay amidst high volatility
As discussed on Friday morning, the Bear attack continues. The Nifty did open in down gaps, traded down to a support level of 4830, tried to fill the gaps with a high of 4930 and closed at 4868 with a 56 point loss on a day-to-day basis. Today too, the same pattern might be repeated.
1) The Elder Ray readings : Bull Power reduced from +19 to -85 Bear Power increased from -132 to -186 indicating that the Bears are in control and a breakdown on the Nifty cannot be ruled out.
2) The moving averages especially the important 13EMA has now gone below the 8EMA indicating start of a fresh downtrend.
3) The slow stochastics momentum indicator has still some distance to catchup with the fast counterpart, indicating more room for a further breakdown.
4) In the above chart, the MACD is in the positive but reducing. The ADX has generated a fresh sell signal. Remember, ADX signal is an advance signal and should be used patiently. The Bollinger Bands are flattening and indicating a support for the Nifty just below the 4800 levels.
5) Since the ATR is expanding and volatility is also firming up, we will be required to stretch our stop losses from 35 points to 50 points. At the same time, we will also be required to stretch our targets from 60 points to 90 points on the Nifty.
5) Considering all the above, our trading plan for the day requires us to act very patiently yet swiftly during the course of the trading session. We believe that the Nifty will be ranged between 4780 and 4910.
a) We will look out for opening fresh shorts near 4890 with a SL of 4940 and a target of 4800. We will cover all our shorts above 4940.
b) We will look out for opening fresh longs near 4790 with a SL of 4750 and a target of 4890. We will not be long below 4750 at any cost.
Happy Trading
For cash market recommendations see our Daily Pre Market calls on NSE
Nifty Weekly Review Last week, the Nifty lost more than 200 points closing at 4868 after showing a high of 5168 and a low of 4830. This is about twice the ATR indicating, high volatility in the week ahead of the September series expiry.During the week, on 20th Sept 2011, we had predicted "A Breakdown seems imminent now" which did occur on the 22nd and 23rd of Sept 2011. The whipsaw like movements continue on the Nifty, and we feel it will only increase in the coming week.We believe that the zone between 4830 and 4740 might act as a support for the Nifty and the 4930 4990 might act as an immediate resistance to the Nifty in the coming week. All in all, a adrenaline filled week seems to be ahead of us, and we look forward to booking some sizable profits along the way.Happy Trading !!! For cash market recommendations see our Daily Pre Market calls on NSE
Nifty Weekly Review
Last week, the Nifty lost more than 200 points closing at 4868 after showing a high of 5168 and a low of 4830. This is about twice the ATR indicating, high volatility in the week ahead of the September series expiry.
During the week, on 20th Sept 2011, we had predicted "A Breakdown seems imminent now" which did occur on the 22nd and 23rd of Sept 2011. The whipsaw like movements continue on the Nifty, and we feel it will only increase in the coming week.
We believe that the zone between 4830 and 4740 might act as a support for the Nifty and the 4930 4990 might act as an immediate resistance to the Nifty in the coming week.
All in all, a adrenaline filled week seems to be ahead of us, and we look forward to booking some sizable profits along the way.
Happy Trading !!!
For cash market recommendations see our Daily Pre Market calls on NSE
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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.
