As "RV" has done it here with Nifty T.A file, go through "Rajagopal's TA and Sundar's T.A" files to sharpen your trading plan. Let their hard work help you in your success...Pose all your "interpreting queries" to them.
Last Week Followup by "Rajeev verma (RV):-
Nifty was expected to move in a tight range of 5330-5450 by me,but it flattered to deceive and broke the lower range to close below 5330 on Tuesday,13/04(c.p.-5322).The reason that I understand is the onset of a Truncated Wave Count completion as per EW study at 5399.(It was mentioned by Sir in the blog too). It is first down week after nine continous up weeks.The weekly high was 5382 and low was 5237.
Few important observations are-
1.There was a close below 5330 early in the week.
2.Last two closing prices were below Daily low ema.
3.Broken the short term uptrend line with the last close.
4.Prices trading below last month derivatives settlement price of 5260 on the last trading day.
Weekly analysis for 19/4 to 23/4-
(This analysis is based on Sir’s Tech Table having 5ema values,Pivot points,Basic Indicators & study of secondary indicators as Index Option Open interest)
1.The Basic Weekly Indicators- as Fast Stochs(5,3), Slow Stochs(5,3) &(14,3), RSI(14) are in sell mode correcting from O/B region with MACD(26,12,9) flat.(Bearish weekly TA)
2.The Basic Daily Indicators -as Slow Stochs(14,3), RSI(14), MACD(26,12,9) are in sell mode correcting from O/B region with Fast stochs(5,3)and Slow stochs(14,3) reaching O/S region.(Selling may continue further with a technical bounce due to O/S position of f.stoch)
3.ADX(9),-The Trend indicator, shows –DI moving upwards from below and +DI moving down with ADX line moving up showing start of a Downtrend.
4.Bollinger Bands- Range is 5190-5390,(the lower levels in combination with f.stochs can give a bounce from +/- this region).
5.Chart pattern-Last close has been below the uptrend line supporting Nifty since 4675 (short term weakness in uptrend.)
6.As per Ema system -Last closing price(5262) is below 5dema low(5276), 20dema(5268),Weekly Pivot(5293) and near Weekly Close ema(5259).It is first weekly close below Weekly High ema(5320) in this month,suggesting Downtrend to continue further.
7.Options open interest -has shown since the start of April series, Max. built up in 5200 Puts and 5400 Calls.The position remains the same this week too but the change in quantity suggests otherwise.5200 Puts that were approx. 98 lac at start of this week were reduced to approx.89lac where as 5400 Calls that were approx. 71 lac increased to apprx. 87 lac.,at the close of the week..Unwinding of Puts and Writing of Calls clearly suggests Monthly trend change, with smart money bias towards short term downtrend now.
Conclusion-
1.Daily rallies to Weekly high ema(5320) should be sold into and support levels are near Weekly low ema(5196) , B.B. lower level(5190), Previous 52w high(5180),50dema(5168),Weekly pivot S2 (5152) So, Immediate Support area is in the region 5150-5190.
2. The above downtrend will end only on a close above Week high ema(5320) and important level of 5330 .(This may start an extended wave count above 5400)
Strategy(Positional)-
1.No new long positions should be formed positionally till a close above 5330.
2.Daily rallies towards 5260-5320 should be utilized by longs to get out and create new shorts with proper s/l .
3.No averaging of long positions on downside should be made as it can increase the losses if the primary support area gives way to further downside.
4.5260 level is last months series settlement price and interestingly this Week’s close ema.This level should decide the fate of this week.5260 should be kept as SAR for trading this week.
Personal observations(other than TA)-
1.The truncated wave completion has begun the onset of correction earlier ,as last weekend I was expecting it to complete extended wave count upto 5450 and then correct from coming week onwards.
“The markets will do what they have to do but will do it when u least expect it.”
2. I personally am biased (since last weekend) that the above support area will give way this weekend/next week to next support region at 5090 (100dma) & Monthly close ema (5100) and importantly if there is no closing above 5330 this week,I stand by my last weekend analysis of this series being settled nearer/below 5000.
“Price signals must be given priority above any forecasts and indicators”
3.I have an observation regarding any derivative series in general,In a trending market if any time during the month the prices trades and importantly close below the settlement price of last series ,it marks the trend change for that month (same is the reverse case too).
Logically now below 5260(settlement price of March series), the longs rolled over from last series and new created in this series (with Nifty trading above 5300 on 12days of the 14 trading days of the series,there are ample of them,) get trapped and they will wish to get out above 5260 levels every time there is a rally.Importantly the series rollover was in a trading range of 5205-5285 in the last week of March,so ideally a close below 5200 should open the flood gates below.
I was expecting this phenomenon to happen next weekend but looks like the truncated wave did the trick earlier.On a lighter note like the ‘truncated’ wave ,’heat’ wave has also arrived early ,it will be prudent to wear ‘shorts’ this summer till indicated otherwise.
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Illango sir,
This mail is due for long time.
First, I wanted to wholeheartedly acknowldege that only, only, because of you I have started to look at market in a complete diff dimenstion. It was utterly bad expereience earlier. I saw market more as a money-generating machine rather than having a simple conscience that it is larger than life and it has its complex mechanism to reward people. Before I realised that it was too late. But still...market and destiny has lovely side of it also.....when meteing out severe punishments for bad approach towards that, at the end of it all it rewards you with a mind and composure and above all a platform from where one can start a meaningful market-journey ahead. It makes sure that we embark a educative journey while on second innings. Thats exacctly the thing hpnd with me.......at the end of it all, I FOUND YOU SIR. I am not all flattering or trying to impress you......It is just deep heartfelt feeling.....that, only because of you I learnt to see market as 'market' !! Thank you sir. Thanks a lot. I FEEL AM NOT ALONE IN SAYING THIS !!!
Now, coming to point giving a feedback to a teacher....I would state that I have learnt to follow indicators, trendlines, OI's, etc which I knew nothing about before. I can clearly track all of these things now and TO AN EXTENT take a call on my trades.........But the most important part of it all and also the reason behind this mail is - Am still not able to arrive or understand those levels you speak about....how to arrive at that levels....in fact, i see many seasoned people there in the blog talk about levels....gautam bajaj, assortz, mynac, RV, sethu, etc.......though I too track the market on the same lines as them, but am not able to arrive at those levels which they concretely talk about......how to develop that skill of studying market to depict the levels of action........plz teach me how to study price action.....how to guage market direction......what needs to be looked into always to arrive at the possible levels of trade and action........how to be successful in depicting those levels.........I'd be very very grateful if you help me learn these things Illango sir.......
Regards
Arun
My answer: "Rajeev Verma" has shown how to interpret the Tech. table , Tech. File as well as OI data. Write down your plans everyday in a simple way, check its efficiency at the end of the day and make the necessary changes and you will be able to guide fellow readers soon.
Major help may be derived from "price congestions" that has acted as supports and resistances earlier and combining them with TA positioning as well as EW.
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Dear ILango,
1. I had once earlier written to you and I fully understand your pre-occupation would have left little time to respond.
2. I follow your site like a religion but I have few things to share, like a student complaining to his teacher, eager to learn more.
3. I am increasingly getting an uneasy feeling that at times when I have taken trade as per your prompt, I seem to have lost money. Let me give example of trade taken by me as per yr posts
a. entered long Suzlon for target around 80, now in loss
b. entered short Tata Motors 729 target 670, now in loss
c. entered short Infosys at 2860, in loss
d. entered short nifty 5150 (last break-out), still holding in loss.
4. I probably am failing to comprehend the flow of guidance by you or i seem to be missing key advice.
5. I do need your guidance, please.
My Answer: Study "Technical Analysis" write ups in the "Labels" section as well as the 8 steps under "Always start trading with these". Once you feel confident about these, you will be ready to trade.
This rather old fashioned expression "many a slip between the cup and the lip" means don't be too sure that your plan is going to work because anything can go wrong at anytime. I only give you the prompt as part of "understanding the TA" , applied TA. Revise your SL, part book and above all have an "expiry date & time " for your trades. I do not give calls but share my thoughts based on the TA at "that time". Markets, being dynamic , the changes need to be incorporated in your trades which is called "Managing your positions", to be done responsibly by you...and you alone.
Feeling sorry for your losses, either by me, others or yourself, is not going to do you any good. Only a proper studying of TA, making a plan based on that, executing the same at the planned level, managing your positions based on the "plan parameters" can bring you consistent profits inspite of a few "stopped out losses".
Look ahead..Go towards light with confidence..Believe in your heart..."Money making is a child's play".
"I thought it would be pleasant to pass some time with you," I responded. "Just the two of us."
