Tuesday, September 9, 2014

Nifty makes an inside day..

Inside days have a 'lower high' and a 'higher low' than the previous day.
These are also generally narrow range bars. In other words, the range of the bar from the high to the low of the bar is relatively narrower (approximately 50% of the range of at least the immediately preceding bar is recommended) than the most recent bar.
The smaller the inside day is the lower your risk will be.
The goal of the bulls and bears are to always push prices higher (if you're a bull) or lower (if you're a bear) than the previous day's high or low. When that does not happen, then their power struggle ends in frustration for both sides.
Inside days happen when there is a fight between the bulls and the bears. In fact, the strength of the bears and bulls are about equal and neither side gains any ground in pushing the stock higher or lower that's why it ends up as a day that has less of a range of movement than the prior day.
So neither side could push the price in the direction they wanted. It creates little movement in either direction. That creates short-term frustration.
Usually this power struggle lasts no more than one day. It is EXTREMELY rare to have a NIB followed by another NIB! In fact the odds are extremely low that you would have an inside day followed by another inside day. If you ever see one you might even want to add to your position because the price move could be outstanding!
Trading inside days is like trading a shook-up bottle of pop, soda or whatever you like to call sweet carbonated drinks in a bottle.
When you shake the bottle and you twist off the cap, it will explode! Those who wanted to push the prices higher or lower will try again the next day and usually one side will overpower the other and win. It's like a tug-of-rope...eventually one side dominates.
For example, if the bulls outnumber the bears then on the following day prices will go higher. And, conversely, if the bears outnumber the bulls then on the following day then prices will go lower. That's how we profit. We simply take the side of the group that has the most power to push prices in their direction! - DaysTrading Coach.
"An inside day is often used to signal indecision because neither the bulls nor the bears are able to send the price beyond the range of the previous day. If an inside day is found at the end of a prolonged downtrend and is located near a level of support, it can be used to signal a bullish shift in trend. Conversely, an inside day found near the end of a prolonged uptrend may suggest that the rally is getting exhausted and is likely to reverse." -Investopedia

Nifty Intraday Update-II

Nifty Intraday Update-I

Nifty Pre-Market View.

Prices have reversed from the channel bottom/ 34 Hr sma & reached the mid-line.
FII's continuing their big purchases with VIX quite subdued.
Prices suggest of
a) the minor (v)th unfolding from 8050 with sub-dividing waves.
b) the minor (3)rd wave from 7862 is sub-dividing.
And hence, one need to follow the prices with a trailing number(for the rise from 8050 & 8133).
With the "Trend regaining momentum in day t/f", prices would make new highs holding initially the retrace for the last rise from 8133.
Bearish scenarios open up only below "8075".