Wednesday, September 17, 2014

Nifty Pre-Market View.

Please guide me about using 34hrsma as a sar.
1. Entry/exit rule. Whether to trade on crossing it or wait for hrly close?
2. Imp to decide SL. Suppose 34hrsma is 8000 and nifty trading below it. Now when nifty cross it should we enter entra hour or wait for hrly candle close? If we take as it croas it and close above it but in next hr if again it crosses from above to below it? How much to keep sl( fixed 20 points) in case of sudden reversal?
SuggestionYour question starts with the answer - i.e: Use it as a SAR. However, I suggest you to use it as a reference pointer-Look at the Hour chart with the 34 hrSma in "Red" colour. It breaks down first but there was a recent low at 7856 and it holds at 7862 & reverses-the recent low helped; the 2nd break down happens and another recent low at 8061 provides support with a low at 8050;
the third break down happens around 8115 and subsequent attempts to move higher was restricted twice at 8128 & 8114 and subsequently, it breaks down below the earlier custer support at 8050-61. 
No number is a fool-proof one but a number that creates a "Tussle for conquering" reveals the impending reversal.
By understanding the recent behaviour of the prices vis-a-vis your chosen number provides the quantum of filter or SL.
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I'm learning from you a lot of Elliot wave Analysis...
I have also read Pretcher Book on Elliot waves some points..
I'm not able to understand.. like today that why (4) will not be considered if Nifty doesnt hold 8019 -- 20 dma...
why crossing 7841 will invalidate the contention of 4 from the rise of 7422..
I also want to know the time frame of waves...
Please help me to get in to more insight...
SuggestionYour understanding of EW takes a quantum jump when you start to channel the price behaviour and start to look for "forms/ patterns" in them - like a 5-wave patterns in uptrend with a big 3rd and the 2nd & 4th having 3 sub-waves, the most basic structure. Once you master this "seeing of 5's & 3's", you can, then, move to those exceptions that fox the follower - the leading & ending diagonals, abc turning to abcde & the world of myriad corrective patterns.
It is the channel that led me to reject (4) when 20dsma came to the channel break point. I have noticed that (4)th wave often breaks the channel by few points & climb back into the channel to move higher for the (5)th. When prices broke the channel around 8050, the 20dsma was placed at 8019 and that was a good filter to hold the (4) but it did not hold; hence, rejected it.
Now see the day chart and draw channel for the uptrend from 7422 and you will notice that prices have completed a 3rd wave at 8180 with the 1st being 7841-hence a break of 7841 would reject the other 4th wave which will leave us with the "larger 4th wave for the rise from 5933" and it gains prominence considering the week -ve divergence with a final confirmation expected on this week end, 19th Sept. Remember, after the confirmation, prices could make a retracing bounce...
Time frame of waves: It is quite simple. Please open the "JustNifty TA(by ilango)" file from JN Group and see the price pattern thru' EW in month chart - you'll notice only the larger waves, for eg. the upmove from 5933 and its sub-waves will not be visible; now, look at the week chart, you'll get the sub-waves a little better & clear. Now, move to the day chart, you'll get them much more clearer and the clarity gets bigger as you go to shorter t/f of hour, 5 min & so on. Most fail to remember the larger wave's context when they start to follow the shorter t/f waves. Always keep going back to the larger t/f to remain in perspective because it helps to make good trading plans.   
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Prices are trending down after breaking the channel, unable to climb back.
FII's are selling with gently rising VIX.
Prices suggest of:
a) a major correction is underway from 8180. More credence based on TA.
b) the 4th wave unfolding from 8180 , for the rise that started from 7422(as long as it holds above 7841). This view is kept for the sake of an alternative only.
Since the inside day with "2-day low -8126" broken, the ST got tilted to bears and prices have been making series of lower highs & lower lows and unable to retrace above 80% of last fall, the last fall from 8114 being retraced at 8059.
The"downtrend has gained its momentum in day t/f" with prices closing below DLEma after showing signs of exhaustion with -ve divergences".
Bearish scenario has opened up below "8125" & more below 8007-22, towards the larger cluster support at 7856/62-7917.
Mild Bullishness returns holding 7917 initially as the retrace for the last fall from 8059.


marina s rao said...

Namasthe Master & Blogmates.

Wish all Long life, Good Health, Peace & Wealth.

Nanda Kumar said...

Dear Ilango Sir, Very informative commentary sir!

Thank you very much.

deepak pinto said...

good morning sir
as expected a close below 8080 has given the bears a whiff of scent of blood and a bounce should be a good place for them to act.
bearish harami at the top with a hns bd is a good set up for more lows to come.

venkatapathy l said...

Namaste Ilango Sir and blog friends


SAM said...

Sir that is a GREAT GUIDANCE....

Parminder said...

Master ilango and friends,
Good morning to all

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