AD Code

Friday 1 June 2012

Nifty - 01 Jun 2012 - Bearish Technical Signals

At the start of a fresh series, Nifty looks bearish below 4920, and more so below 4880.

As discussed yesterday, it turned out to be "A chaotic Expiry" day, with the Nifty opening with a gap down of 55 points and then grinding within a small range directionless for almost the entire day, before spiking up to close the gap at the fag end of the session. Today, given the global cues, the Nifty is likely to open with a small negative gap, and looks under bearish pressure. 

1) The Elder Ray readings : Bull Power reduces from +34 to +4 Bear Power rises from -4 to -62 indicating that the Bears are gaining strength and now a break of 4880 might embolden them. For today, the Bulls need to overcome 4950 to maintain their upwards momentum, whereas the Bears need to breach below 4880 to maintain their downwards momentum.

2) The Nifty is now trading below all its key EMAs and all its key DMAs.

3) The stochastics have just touched the overbought zone and are now pointing downwards.




4) In the above chart, the volumes have almost doubled in yesterday's fall in the Nifty indicating the bearish mood of the market. The MACD is going flat after a few day's of rising and the histogram is threatening to fall. The ADX is now clearly favoring the bears, however it is indicating a slowdown of the momentum. The Parabolic SAR is continuing to hold its buy signal, but could turn around below 4880.

5) Considering the above, our trading plan for the day is as under.

a) Below 4920, and more so below 4880, we will open fresh short positions with a SL of 25 points and a target of 4835. We will add to these short positions only below 4790.

b) Around 4830, we will open fresh long positions with a SL of 4800 and a target of 4880 and then 4920. We will add to these long positions only above 4955.

Happy Trading !!! 

For cash market recommendations see our Daily Pre Market calls on NSE

Nifty - 01 Jun 2012 - Bearish Technical Signals

At the start of a fresh series, Nifty looks bearish below 4920, and more so below 4880.

As discussed yesterday, it turned out to be "A chaotic Expiry" day, with the Nifty opening with a gap down of 55 points and then grinding within a small range directionless for almost the entire day, before spiking up to close the gap at the fag end of the session. Today, given the global cues, the Nifty is likely to open with a small negative gap, and looks under bearish pressure. 

1) The Elder Ray readings : Bull Power reduces from +34 to +4 Bear Power rises from -4 to -62 indicating that the Bears are gaining strength and now a break of 4880 might embolden them. For today, the Bulls need to overcome 4950 to maintain their upwards momentum, whereas the Bears need to breach below 4880 to maintain their downwards momentum.

2) The Nifty is now trading below all its key EMAs and all its key DMAs.

3) The stochastics have just touched the overbought zone and are now pointing downwards.

Thursday 31 May 2012

Nifty - 31 May 2012 - Chaotic Expiry Day

Amidst mixed technical signals & weak global cues, a chaos expected on Expiry Day.

As discussed yesterday, we saw the "Expiry Whipsaw" being setup yesterday, with the Nifty gyrating wildly within a small confined range of 45 points. The global cues are getting weaker, and we have avoided a 2% fall in Nifty for many days now. Today, we could see that on the bourses, and one needs to be ready mentally for that outcome.

1) The Elder Ray readings : Bull Power reduces from +72 to +34 Bear Power increases from +34 to -4, indicating that after a brief stay of just 1 day in the opponents territory, the Bears have regained their safe zone, and now would get ready for the kill. For today, the Bulls need to overcome 4985 to maintain their momentum, whereas the Bears need to breach 4945 to maintain their momentum. A down gap opening will tilt the bias towards the Bears.

2) The Nifty is now poised below all its key DMAs, and below its 21EMA, at its 13EMA and above its 8EMA, making it highly vulnerable to a fall.

3) The stochastics just touched the overbought zone, and are now showing a negative divergence, indicating a fall on the Nifty.

 


4) In the above chart, the volumes have increased in the yesterday's fall on the Nifty. The MACD is showing a positive divergence. The ADX is suggesting equilibrium in the Bull and Bears momentum, with a loss of momentum. The Parabolic SAR is continuing with its Buy signal. Overall, the technical signals are mixed in their directional indication, which could add fuel to the chaos today.

5) Considering the above,  our trading plan for the day is as under.

a) Below 4930, we will open fresh short positions with a SL of 4960 and a target of 4860. We will add to these short positions only below 4840.

b) Above 4855, we will open fresh long positions with a SL of 4840 and a target of 4920. We will add to these long positions only above 4960.

Happy Trading !!!
 

For cash market recommendations see our Daily Pre Market calls on NSE

Nifty - 31 May 2012 - Chaotic Expiry Day

Amidst mixed technical signals & weak global cues, a chaos expected on Expiry Day.

As discussed yesterday, we saw the "Expiry Whipsaw" being setup yesterday, with the Nifty gyrating wildly within a small confined range of 45 points. The global cues are getting weaker, and we have avoided a 2% fall in Nifty for many days now. Today, we could see that on the bourses, and one needs to be ready mentally for that outcome.

1) The Elder Ray readings : Bull Power reduces from +72 to +34 Bear Power increases from +34 to -4, indicating that after a brief stay of just 1 day in the opponents territory, the Bears have regained their safe zone, and now would get ready for the kill. For today, the Bulls need to overcome 4985 to maintain their momentum, whereas the Bears need to breach 4945 to maintain their momentum. A down gap opening will tilt the bias towards the Bears.

2) The Nifty is now poised below all its key DMAs, and below its 21EMA, at its 13EMA and above its 8EMA, making it highly vulnerable to a fall.

3) The stochastics just touched the overbought zone, and are now showing a negative divergence, indicating a fall on the Nifty.

Wednesday 30 May 2012

Nifty - 30 May 2012 - Expiry whipsaw ahead

With the Bulls failing to cross resistance at 5025, the expiry whipsaw is about to start.

As discussed yesterday, "The Bulls regain their footing", and as such the Nifty traded in the positive for almost the entire session. However, the Nifty closed below its opening mark, which is a signal of Bulls getting exhausted at some point. The Bears however, are yet to rise and strike. This, when added to the fact that yesterday was a NR7 day, makes up for a scenario, where the whipsaw may be unleashed.

1) The Elder Ray readings : Bull Power rises from +54 to +72 Bear Power reduces from -10 to +34, indicating that the Bears have now lost their footing and have to be quick to strike. For today, the Bulls need to surpass 5030 to maintain their upwards momentum, whereas the Bears need to breach 4950 to regain their lost grounds.

2) The Nifty is now poised above all its key EMAs, but is below its key DMAs. 

3) The Stochastics are still in the neutral zone, very near to the overbought area.

 


4) In the above chart, the volumes have increased with the Nifty going almost nowhere, giving a indication of a big move ahead. The MACD is indicating a up-move, the ADX is supporting this up-move but is suggesting a lower momentum to this trend. The Parabolic SAR continues with its Buy Signal.

5) Considering the above, our trading plan for the day is as under.

a) Above 4950, we will open fresh long positions with a SL of 4920 and a target of 5020. We will add to these long positions only above 5045.

b) Below 5005, we will open fresh short positions with a SL of 5025 and a target of 4950. We will add to these short positions only below 5020.

Happy Trading !!! 

For cash market recommendations see our Daily Pre Market calls on NSE

Nifty - 30 May 2012 - Expiry whipsaw ahead

With the Bulls failing to cross resistance at 5025, the expiry whipsaw is about to start.

As discussed yesterday, "The Bulls regain their footing", and as such the Nifty traded in the positive for almost the entire session. However, the Nifty closed below its opening mark, which is a signal of Bulls getting exhausted at some point. The Bears however, are yet to rise and strike. This, when added to the fact that yesterday was a NR7 day, makes up for a scenario, where the whipsaw may be unleashed.

1) The Elder Ray readings : Bull Power rises from +54 to +72 Bear Power reduces from -10 to +34, indicating that the Bears have now lost their footing and have to be quick to strike. For today, the Bulls need to surpass 5030 to maintain their upwards momentum, whereas the Bears need to breach 4950 to regain their lost grounds.

2) The Nifty is now poised above all its key EMAs, but is below its key DMAs. 

3) The Stochastics are still in the neutral zone, very near to the overbought area.

Tuesday 29 May 2012

Nifty - 29 May 2012 - Bulls regain their footing

Aided by short covering, the Bulls have staged a up move that can sustain.

Yesterday, we had suggested "Volatile expiry week ahead", and we saw hints of that volatility during the trading session yesterday, when the Nifty first struggled to cross the hurdles near 4970 and kept on coming back from there. However, the Bears could not breach the day low even once during the entire trading session, and that is where they lost the battle. The Bulls then took the Nifty past the resistance and closed it above at 4986. Today, again we could see a bout of volatility between 4950 and 5050 levels.

1) The Elder Ray readings : Bull Power increases from +2 to +54 Bear Power reduces from -45 to -10, indicating that now both the Bulls and the Bears are in their respective zones, and that could increase the volatility in the trade. For today, the Bulls need to overcome  5005 to maintain their rising momentum, whereas the Bears need to breach below 4940 to remain in their safe zone.

2) The Nifty is now above all its key EMAs but is below all its key DMAs. 

3) The stochastics are in the neutral zone, and are pointing upwards. The fast stochastics are almost about to touch the overbought zone.

 


4) In the above chart, the volumes have decreased in yesterday's rise on the Nifty, making it slightly susceptible. The MACD has now shown a positive divergence while being in the negative zone, indicating a strong support to the up move. The ADX is also now shifting bias towards the Bulls, but the trend momentum is coming down. The Parabolic SAR continues to hold its buy signal.

5) Considering the above, our trading plan for the day is as under,

a) Above 4955, we will open fresh long positions with a SL of 4930 and a target of 5020. We will add to these long positions only above 5050.

b) Around 5025, we will open fresh short positions with a SL of 5050 and a target of 4950. We will add to these short positions only below 4930.

Happy Trading !!! 

For cash market recommendations see our Daily Pre Market calls on NSE

Nifty - 29 May 2012 - Bulls regain their footing

Aided by short covering, the Bulls have staged a up move that can sustain.

Yesterday, we had suggested "Volatile expiry week ahead", and we saw hints of that volatility during the trading session yesterday, when the Nifty first struggled to cross the hurdles near 4970 and kept on coming back from there. However, the Bears could not breach the day low even once during the entire trading session, and that is where they lost the battle. The Bulls then took the Nifty past the resistance and closed it above at 4986. Today, again we could see a bout of volatility between 4950 and 5050 levels.

1) The Elder Ray readings : Bull Power increases from +2 to +54 Bear Power reduces from -45 to -10, indicating that now both the Bulls and the Bears are in their respective zones, and that could increase the volatility in the trade. For today, the Bulls need to overcome  5005 to maintain their rising momentum, whereas the Bears need to breach below 4940 to remain in their safe zone.

2) The Nifty is now above all its key EMAs but is below all its key DMAs. 

3) The stochastics are in the neutral zone, and are pointing upwards. The fast stochastics are almost about to touch the overbought zone.

Monday 28 May 2012

Nifty - 28 May 2012 - Volatile expiry week ahead

As the technicals point to a sideways market, the Nifty may see a volatile expiry.

On Friday, we had suggested "Choppiness to continue", and we saw the Nifty grinding within a very small trading range of 46 points between 4889 and 4936. Today, the Nifty is likely to open flat with a slightly negative bias, but is expected to again exhibit a choppy trading session with a slightly widened trading range.

1) The Elder Ray readings : Bull Power rises from -4 to +2 Bear Power reduces from -106 to -45, indicating that the Bears are now losing momentum at a high pace, but the Bulls are not able to capitalize at the same speed. For today, the Bulls need to overcome 4930 to remain in the positive zone, whereas the Bears need to breach the Nifty below 4885 to maintain their downwards momentum.

2) The Nifty continues to trade below its key DMAs and its 21 and 13 EMA, but above its 8EMA.

3) The Stochastics are now out of the oversold zone, and are pointing horizontal.

 


4) In the above chart, the volumes have gone down with the Nifty going nowhere, highlighting the choppiness in the trade on the Nifty. The MACD is now about to rise with the histogram also coming in the positive, indicating that a up move is just round the corner. The ADX is suggesting that the trend momentum is coming down, and there is a slight bias towards the Bears. The Parabolic SAR is continuing with its Buy signal.

5) Considering the above, our trading plan for the day is as under.

a) Around 4970, we will open fresh short positions with a SL of 4990 and a target of  4895. We will add to these short positions only below 4855.

b) Around 4870, we will open fresh long positions with a SL of 4855 and a target of 4915 and then 4960. We will add to these long positions only above 4990.

Happy Trading !!! 

For cash market recommendations see our Daily Pre Market calls on NSE

Nifty - 28 May 2012 - Volatile expiry week ahead

As the technicals point to a sideways market, the Nifty may see a volatile expiry.

On Friday, we had suggested "Choppiness to continue", and we saw the Nifty grinding within a very small trading range of 46 points between 4889 and 4936. Today, the Nifty is likely to open flat with a slightly negative bias, but is expected to again exhibit a choppy trading session with a slightly widened trading range.

1) The Elder Ray readings : Bull Power rises from -4 to +2 Bear Power reduces from -106 to -45, indicating that the Bears are now losing momentum at a high pace, but the Bulls are not able to capitalize at the same speed. For today, the Bulls need to overcome 4930 to remain in the positive zone, whereas the Bears need to breach the Nifty below 4885 to maintain their downwards momentum.

2) The Nifty continues to trade below its key DMAs and its 21 and 13 EMA, but above its 8EMA.

3) The Stochastics are now out of the oversold zone, and are pointing horizontal.

Sunday 27 May 2012

Nifty - Weekly Review - 21st May 2012 to 25th May 2012

After a choppy week, the Bears still in control of the Nifty, at start of the expiry week.

During the past week, we had said, "Bearish hold still on" , and that the Nifty would go through "Grinding Consolidation", then there would be a "Retest of recent lows", and "Choppiness to continue" amidst a "Bias still downwards".

In our last weekly review, we had said "The weekly downturn has got arrested, but no signs of a rally yet. Pain continues. ".

The Nifty has obliged us with moving within its previous week's trading range. The Bulls and Bears both have failed to move the Nifty past the previous week's high and low, which were at 4957 and 4789. The current week's high and low were at 4956 and 4804.

As per the rules of "Identifying Market Trends", the Bears need to breach lows, or the Bulls need to overcome highs. A failure on part of both leads to what is called a "Sideways", "Range bound", "Consolidating" or a "Choppy" market. And haven't we got just that?

The trick of the trade in such markets is always to sell highs and buy lows, where the risk reward ratio is the most favorable. However, more important than that, is to "Trail your stop loss" to preserve profits, which enable multiple entries in the same direction. Also in choppy markets, it is advisable not to wait for targets. We followed these rules, and are happy we did so.


 
The coming week, is a week for the series expiry, and we expect the choppiness to increase during this week, and would refrain from having a detailed trading plan as every other week.

1) The Elder Ray readings : On a weekly basis, the Bull Power has increased from -183 to -152 the Bear Power has reduced from -351 to -304, indicating that though it would seem that the Nifty is about to stage a smart recovery, the Bears are still in control of the momentum. For next week, the Bulls need to overcome 5080 to return to their safe zone, whereas the Bears need to breach 4780 to maintain their downwards momentum.

2) On a weekly basis, the Nifty is still below all its key EMAs and its 50 and 100 DMAs. The 200 DMA at 4822 is a key pivotal support as of now.





3) In the above chart, the volumes have decreased in the mild recovery on the Nifty, suggesting sustainability of the up move. The MACD is clearly in the negative now and is still falling. The ADX is suggesting a down move which is losing some momentum. The Parabolic SAR continues to hold on to its weekly sell signal.

 
4) Considering the above, our weekly trading plan is as under.

a) Go short around 4950, with a SL of 5005 and a target of 4840.

b) Go long around 4850, with a SL of 4835 and a target of 4925.

c) Remain short below 4800.

d) Remain long above 5005. 

For cash market recommendations see our Daily Pre Market calls on NSE

Nifty - Weekly Review - 21st May 2012 to 25th May 2012

After a choppy week, the Bears still in control of the Nifty, at start of the expiry week.

During the past week, we had said, "Bearish hold still on" , and that the Nifty would go through "Grinding Consolidation", then there would be a "Retest of recent lows", and "Choppiness to continue" amidst a "Bias still downwards".

In our last weekly review, we had said "The weekly downturn has got arrested, but no signs of a rally yet. Pain continues. ".

The Nifty has obliged us with moving within its previous week's trading range. The Bulls and Bears both have failed to move the Nifty past the previous week's high and low, which were at 4957 and 4789. The current week's high and low were at 4956 and 4804.

As per the rules of "Identifying Market Trends", the Bears need to breach lows, or the Bulls need to overcome highs. A failure on part of both leads to what is called a "Sideways", "Range bound", "Consolidating" or a "Choppy" market. And haven't we got just that?

The trick of the trade in such markets is always to sell highs and buy lows, where the risk reward ratio is the most favorable. However, more important than that, is to "Trail your stop loss" to preserve profits, which enable multiple entries in the same direction. Also in choppy markets, it is advisable not to wait for targets. We followed these rules, and are happy we did so.


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.