1.BASIC INDICATORS
- The Stochs,both 5,3 and14,3 are in OB region from quite some time,with no negative diversion.(Bullish/OB)
- RSI 14 has been in OB region for some time.and RSI 9 since the Budget day.with no negative diversion(Bullish/OB)
- MACD 26,12 , moving averages and signal lines are bullishly aligned but MACD histogram is falling/flat since Nifty crossed 5100.(Bullish with weakness)
- 5EMA system is closing above Close 5 day Ema continuously since start of the month(15 trading sessions in line& that too above High 5 Ema)and above 5 Week Close ema since last 4 weeks.(Bullish)
- Last 3 day chart shows Negative Diversion in all Stochs,RSI,MACD.(short term Bearish,may be intraday on Monday)
2.OTHER INDICATORS
- A/D line w.r.t Nifty prices is showing Negative Diversion,especially after move above 5100.McCelellen indicator also shows the same as posted by Sir on Friday.(Bearish)
- VIX is at its lowest, whole of march has seen average VIX of 20 and since last three days even lower to approx 17.VIX is a contrarian indicator.It is said,”If VIX is HIGH,its time to BUY and if VIX is LOW ,its time to GO”(Bearish)
- Volumes on the Upmove since 4675 are on the lower side as compared to the Downmove of 5310-4675.(Bearish)
- ATR 14 from start of March has reduced from approx.82 to approx.63.(Bearish/
consolidation)
- Chart Pattern of the Upmove is in the form of a Rising Wedge which has its supports at approx.5220(Bearish)
- Derivatives front shows that-
-Put/Call ratio of 1.68(Bullish),
-Low IV’s in Options(Bullish),
-Last week rollover of Nifty Futures to April series is healthy 45 lac with total O.I. in next series at approx 69 lacs(Bullish,as rollover on longer side)
-The Call and Put O.I. movement shows that smart money is hedged for a downmove of 5170 and to upmove of 5320.Movements in O.I. of 5100 and 5200 Calls and 5400 Puts shows a balance at 5270 .
- PSAR of this Upmove is approx. at 5170.
3.CONCLUSIONS
-Remember that Markets can remain irrational longer than we can remain solvent,so don’t fight the tape and make the Trend your Friend. Sit tight with Longs till Indicators along with Price levels do not give Reversal. Hedge Yourselves as smart money is doing .
-The Most Important Level this week is 5220, it is the Close 5Dema, apprx Weekly Pivot, the Rising Wedge pattern support and Monday’s daily S2 .
-Any move below 5170 and above 5270 can give 100 points.
( Just a hunch that it may take a News to break the range, RBI’s rate change,may be not,Obama’s Health care ,may be yes)
9 comments:
Well Sir. As predicted this deserves an A (class) certificate. The knowledged ones must undertake to present a few lines on the week past and expected - every week. If it can be made with conviction,that too which will have a contradicting/divergent view of Ilango's - it will give a good perspective and cause for healthy discussion.
We may wake up to the trend indicator for the week.
Thank you aarvee9 - very clear thoughts.
Hi RV9,
fantastic presentation, and a wow wow language ...
The amount of data you seem to assimilate and process is really great.
Will look to 5220 now.
19th also happens to be an NR7 day with a HiHi 1st day and HiLo 4th day. So, the possible expansion. Keltner upper also falls around 5220. Will%R at 96.
Sriganeshh said OBV is peaking.
Be there tomoro, & gives us a live guidance.
:)
with regards.
Dear Ilango sir & seniors
Do you got the breaking news that bear cartel shankar sharma has been BAN for One year from market What you say seniors please comment!!!
@Ilango sir,
i am honoured to share space at your blog,pl. accept sincere thanks and my regards.
Dear Ilango,
When I started to visit here, I started to understand ABC of the TA and from then my new education started. Today’s is the fine example of a good teacher.
Now, I follow price and the volume, along with your/blogmates views, and TA table figures. I myself know that I have no authority to analyze the situation. Nevertheless when you have given the opportunity to express every one with this platform I would like to give my LA (you may say Learner's analysis or just a logical analysis)
Between 23/12/2009 to 20/01/2010 i.e. 18 Trading days. During this period Nifty future always gave a close above 5100 to 5300 range and its avg.for that one is 5231.20
Between 8/03/2010 to 19/03/2010 i.e. 10 Trading days. During this period also Nifty future always gave a close above 5100 to 5300 range and its avg.for that one is 5172.95.
"aarvee9"'s analysis “Any move below 5170 and above 5270 can give 100 points.” Encouraged me to express my views.Thanks Dear Ilango and Dear aarvee9.
@All
sharing with u all,the mail i have sent to dear mok just now regarding O.I. Interpretation.hope this analysis helps in some way to clarify and trade the o.i. data.
1.Open Interest and Option analysis to me are secondary indicators of market and they should be treated like one.
2.O.I. and change of it cannot be looked in isolation.It has to be used in conjunction of Nifty price movement, data from rollover date and change in it hence.as well as overall market picture.It can only help in strengthening our conviction rather than forming/basing ones conviction on it.
3.Just to give an example –
a.in current month of March on 12/03 (Friday),there was huge build up of 10.57 and 12.34 lac shares in respective O.I. of 5100 CE and 5200CE, Nifty was trading in a tight range of 5095-5150 throughout the week.If we read this data wrt Nifty price ,we will be sure that calls have been written and the range of nifty will breakdown as all other indicators are OB.but exact opposite happened and these calls got covered in next two trading sessions.why? because someone smart knew of range break coming and was hedging his position for breakdown and must have gone long in nifty futures ,when the range broke on upside he covered the calls and sold of futures.so the above data only indicated of coming range break but not the direction.
b.similarly on 8/3,(as I mentioned in my report also), 5300PE have added unusual open interest of 10lac shares nifty was in the same range as above,this definitely showed downside market capped at 5080 because hedging done should have been done in above manner and moreover it was way above strike,someone must have been interested in taking the premium and rangebound market would have given him time decay and breakout of the range ,a handsome profit.
so this doesn’t makes sense in isolation.
4.Higher O.I in puts have been considered as base building and strong support but in Oct..last year the puts were heavily written as markets was expected to go to 5300, they were massacered till no end as market tanked to 4500.All the bases formed by put writing were bombed
The very next month market expected to go to 4200 or remain range bound covered all grounds and ended above 5100 doing the same to call writers.
Though I consider the writers, the most smart and informed of the traders with deep pockets ,they also are drummed and clearly all direction and range based on their data gets busted that time.
5.The data of O.I. has no clear breakup of buying and selling ,we never know the net open positions bias ,it could be both ways.secondly we don’t have figures of hedging ,which may be done with futures or amongst the options itself.lastly some insiders /informed traders take heavy naked positions/partly hedged,we will never know which positions are hedged and how and which are naked and with what bias.
This makes the O.I. data and change of it very dicey to interpret.
@All----contd.from above----
6.This month the data looked clear because of strong bias at the start in 5000puts(over one crore),secondly heavy build up in 5100calls simultaneously.the range at the start of month is never so small,once it breaked and then again traded sideways without major correction,also the volatility in options was dead this month,gave some clear indications. Normally it is not always so,and we get caught up on wrong foot analyzing this data in isolation.
7 My way of going about O.I. data
- I look upon this data as secondary indicator
- I look for some unusual build up and try to see its followup and interpret it in conjunction with market conditions prevailing that time.
-for me options are tools for hedging more than direction indicators,(which they may sometime when other datas are confusing)
-I find that upto 15th of a month O.I data may determine a range in a trending market as writing is rampant due to higher premiums.I check this data after 15th and see if any trade can be formulized based on it.
-I take some trade based on my convictions(hedging them too) in a week before expiry as options can give fabulous returns compared to other instruments with similar investment capital.
-last week of expiry is dangerous as premiums disappear in a day and don’t give a second chance to cover as in previous weeks,so losses in terms of percentage can be huge or total.
8.There are no rules formalized for interpretation of O.I. data (which itself is not transparent) as with other indicators because maybe it is not a indicator at all which gives uniform signals under same conditions all the timeTthis is because of its non transparent and dynamic nature which changes real fast in real time.
9.So because of the above considerations I feel this may be difficult to quantify and then interpret the data,secondly it may do more harm to traders not well acquainted with option data because.the data cannot speak for itself as it does in case of other indicators.
10.Here is a list of resources which I follow for the derivaties data
http://www.nseindia.com/ (for Realtime and EOD data)
http://www.stocksfortune.com/FOReport (for EOD data)
http://www.ventura1.com/Derivativesnew/iFrindex.aspx (For EOD data)
http://www.marketcalls.in (for realtime charts of O.I.)
and few brokerage reports on derivaties for some interesting data missed by me.
@All
correction-------
pl.read 3.b. first line,as 5200PE inplace of 5300PE.
Thanks.
RV9,
it is RealValue9
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