Nifty's short term trend getting stretched, 2690 - 2790 a deciding range..

Nifty has faced consistent selling at 2770-2790 area in the past few days and now there is a small negative divergence in 5 minute chart..If 2690-2710 levels is not held & a close below 2720 will lead to a fall..

If it clears 2790, the next resistance will be around 2835-2860. A firm trading above 2860 is essential for any meaningful bull move(Bear rally!).

NIFTY is in buy mode technically...

I am a buyer in today's dip as it has proven so many times earlier..Daily in uptrend..

Good luck to all

Mumbai..I cry for you...

Mumbai...I cry for you...

I feel very sad for the regular violent incidents happening in Mumbaiker's lives.I remember during the 1992 riots, various residential associations or groups formed their own vigilance teams and use to watch over their areas in turns every night to safeguard their near and dear ones. With these incidents happening on a regular basis, it is nothing but "War" at your door step. Without the involvement of the citizens, you cannot deter these elements. And a proactive action from all residents may unite Mumbaikers like in those glorious days.
I studied , worked & married and raised a family in Bombay. I will be a Bombaite wherever I may live... till I die. And I deeply feel for all who lives there..

Nifty - A reversal in the making..(A Bottoming formation)

Bull View:-
Nifty seems to be doing a bottoming & reversal formation in the form of a "Head & Shoulder" in 5-Minute chart targeting 3050 levels.This set up is valid as long as 2694 & 2640 are held in the coming days and on a break above 2780. After breaking above 2780, it may face resistance around 2820 - 2850 area and may pullback towards the break out point at 2780 or even a little lower before rallying further.

Immediate range is 2640/2690....2750.....2780/2840.



Bear View:-
You can refer all the charts posted earlier ...move below 2630 may lead to the last leg of the down move..

Nifty holding 2694 & rally past 2791 is min. req for up

BULL VIEW:-Nifty has managed to hold its base at 2630 for the past 3 days inspite of intra sellings & settlement liquidations..If it can rally past 2791 towards 2840 area, absorb the selling in 2800 - 2840 area and trade past 2860 will result in a good rally ahead.

BEAR VIEW:-On the other hand, if it fails to hold 2695 - 2725 area,may weaken upto 2630-2640 area and failing to hold 2630 may lead to severe falls...

Technically, market has clawed back above 5 day ema(2705)..That is a plus and that should be protected for uptrend to continue..

Nifty sold off at 2780, breaks channel (5th dn),Now the critical 2630 break may lead to more falls

Inspite of bullish global cues, Nifty got sold off at 2780, fell 150 points due to settlement liquidation.
Nifty closed below 5ema...sell on rises till it clears the channel top..

Last support for the bulls at 2630.

3240--2860 =380(1st dn)
2860-3160......(2nd up)
3160--2503 =657 (3rd dn)
2503--2790.....(4th up)
2784 - 380 = 2404(A likely target for 5th dn)

As the 3rd is already more than the 1st, 5th can be more than 380 also.

As we are in the 5th down, let us look for a possible bottom on Thursady(Settlement day) or Friday based on the world market cues. A rally past 2784 will cancel out this view and the uptrend may resume..

RIL- poised for a rally with the market..

Many stocks have done 80% retracement to the rise from Oct.27 bottom and are poised for a rally.Once Nifty clears 2739 and then 2860, 3000& above is possible.

If Reliance(1145.00) can hold the 1100 bottom and rally past 1220, it has the potential to reach 1305 to 1400.., provided Nifty stays in uptrend.

Nifty struggles for a reversal..>2750 up., < 2630 down..

Nifty is struggling to close above 5 ema, just managing it..
Nifty unable to close above 5 high ema (Didn't even touch it..)...momentum is lacking..

Trade cautiously till a convincing up trend materialises above 2860 (Channel break point)..Trade the points with resistances & supports..

Trend following & Tech. Table reading..

There are various time cycles operating in the market all the time like monthly, weekly, daily, hourly, 5-minute, etc and each has their own trend.
For eg.We have presently the weekly trend down, daily attempting & nearly achieving a reversal, hourly turning up on Thursday and so on.

To confirm a trend, market need to close above or below 5 ema. Why ema? Because they give more weightage to the recent price action unlike the simple moving average which gives equal weightage to the last 5 days closes. And also the slow macd (Difference between 12 & 26 ema) should be up and above its trigger (9 sma of macd).Why 5 ? 5 trading days a week..Besides, I have found it to be stable , though some use 3, 4 etc.

If I wait for a daily buy signal, I miss 200 points from the bottom before the trend turns up. And after the trend turns up , market pulls back as a correction before rallying further and you may end up holding at higher levels for a brief period of time. So we look for the hourly trend to take position but this should be done only when the daily is in oversold status.

Similarly when the hourly is in oversold status, look at 5 minute to give you a buy signal for a possible reversal in hourly.On the fateful 27th Oct, Nifty's low of 2253 was accompanied by an excellent +ve divergence which helped to take a buy call even before the hourly buy signal.

If you see the Tech table in which Market is shown to be down in weekly (always closing below 5 ema) and in daily (Closed above 5 ema but macd is yet to move above the trigger and still closed below the 5 high ema).

5 High ema tells you the upward momentum in Nifty. As long as it closes below it, it is sell on rises.(So for Monday, Nifty needs to close above 2750 (high ema) to sustain the Friday's momentum..Just intra rally above 2750 is not enough). If it closes above it, then buy on dips & hold longs.Use it in conunction with weekly, daily, hourly.

5 Low ema tells you the downward momentum in Nifty. As long as it closes below it, it is hold shorts.If it closes above it, it is buy on dips & sell on rises till it closes above 5 high ema.

In simple terms
....Up & buy on dips above 5 high ema
....dn & sell on rises below 5 low ema
....sideways & trade supports & resistances as long as it closes
inbetween 5 high ema & 5 low ema.

These are certain indicative tools and not an absolute one for trading.

Use always channels for your trading along with other supportive indicators. the primary guide should be prices and that travels within channels most of the time. Channels most often break during a 4th wave. So keep that in mind. (Eg. Say a downtrend develops in to a 5 sub waves. After 1 dn, then 2nd up, then a 3rd dn and now on its 4th up. Draw a line connecting 1st bottom and the 3rd bottom. Bring a parallel line touching the 2nd top and you will find the 4th wave breaking this top trend line briefly and move back into the channel and make a low and then rise breaking this channel decisively. Barring these, Channels offer excellent trading guides.
Observe in all the "SAR" charts posted here, how these channels have helped in intra days and even helped in avoiding whipsaws.

Finally, an interesting article about the recent financial meltdown...you may have read the first few paragraphs already elsewhere but the last few paragraphs are the surprising ones. don't miss them.