Month Low ema is placed @ 5417 and hence a close below it would maintain the downward momentum and its resumption. The chart below shows the likely choppiness that has been developed by the market for the budget day.
The first fall from 5599 stopped @ 5413 and hence the breach of the same will confirm a reversal possibility. VIX has been bearish and the price chart shows major support of 5350-5400 having broken firmly recently and attempt to stay above it has been failing so far and one more attempt will be on towards 5350-5400 on the budget day.An ideal scenario for the coming week would be a choppy move upto 5375 to 5405 and then a drop to 5195 or 5097(73.6%/ 80.0% retrace) which would generate a +ve div. The chart below shows the "Sharp fall scenario" as well as the importance of 5200 for bulls and 5400/5600 for bears. Revisiting the monthly chart posted few weeks ago hasn't changed our views and the current downward direction being intact with three reversal points: "ii" @ 5096-5197 zone.
"2" @ 4750 zone (Will fine tune as time goes by)
"C" @ 4000 zone (Will fine tune as time goes by).
I'll be spending some time with my son in his preparations for his "10th ICSE" exams starting from 28th Feb. There could be some delay in updates. Readers who are diligently updating the tech.table, monitoring divergences may update the blog "incase I am not able to do the same on time".
@ U.K.Raj,
Birbal would make a good trader according to you as he has understood the "Art of sitting tight"..!
This weekly channel has the "break down" level at approximately 5250-5270 zone. Trendline has been broken; Completion of 5 waves; Closed below 20sma; Double divergences after 9 weeks of uptrend;Minor supports may be @ 5325-5335. Friday's PreMarket clearly suggested only "an aggressive Buy" and the same needed to be confirmed with a move past 5415 which did not happen. Time ran out and the intra sharp upmove failed at 5405. The 12.00 Noon update showed the chart pointing out the break down point @ 5385. Always revise your trading plan at regular intervals and remember my "Expiry date/ time" factor for each trade.
Tech.table shows weakening momentum of bulls even in the weekly T/F. Week Low ema @ 5300 is crucial as per this table. Remember these numbers change as the market unfold and will be updated regularly.
5-Min Macd shows a likelihood of +ve divergence but it needs to be monitored on Monday. I will update the chart in PreMarket View. Tell me in one word, "How do you conquer FEAR.?"
Keep revisiting your fundamental learning: Applied technical Analysis. Only by applying what you have learnt, can you progress well and it goes for both life and trading. I have chosen in life to follow certain ideals and have faced difficulties, lost a lot of relationships and it has never been my loss as I am quite content in this journey inspite of many instances of disappointments. It is my journey and I have chosen it this way. I am sure you excercise your free will to choose yours which is closest to your heart. You have 90 minutes in a football game and only what you do during that 90 minutes count, not before it or after it. You can take this 90 minutes as your life time...or your trading hours...or your family time and whatever you choose, play it with all your heart. Markets are like the slippery fish, often escaping even a firmer hand. We have outlined in the above write up certain methods to capture a large chunk of the market and we should simply do it. Be flexible enough to use different method when the situation demands. We tend to place undeserving importance to others opinion and conclusions and regret not following our own counsel. If you are confident and convinced of certain studies..be it TA, EW, MP, FA, Astro, Gann, Music notes, follow them to their logical conclusion. The biggest enemy in this journey is "getting distracted" and only you can take the required steps to deal with such distractions. Lead indicator: Only leads...It shows you the reversal only and not the tops or bottoms. It showed an upward reversal from the 4786 low point which is yet to be reversed in this weekly Time frame. The same "Lead indicator" has shown few minor reversals of "Ups & Downs" in the day Time frame from 4786 till now. Each reversal has given a minimum 100 points if the signals are accepted. You can now fine tune further down to "Hour Time frame" for the next reversal.. Use the Head only for "Planning" and disconnect it once the execution starts and especially during celebrations.
Elliott wave clearly guided through this "5" waves up till the 5th of the 5th too. The fall had a "5 sub waves" which could be either a part of a zigzag meaning "5453 to 5358(95); 5402-95= 5307 target OR part of a larger correction to the entire upmove from 4786 to 5453 whose retracement is shown in the Tech table below. Above the "Stochastics" indicated the reversal and below the "Macd" indicated the clear negative divergence play. Indicators indicate but not every day and when they do, ignore at your own peril.
Weekly chart shows 3 clear supports and the same may be coupled with the studies above. A weak bounce to a sharp fall. 5300-5310 is the immediate support below which is 5200. Breadth has been poor all through and it is at a critical juncture. It dipped below "0" during the "4786" lows and has bounced back into +ve zone. A revisit will have sustained bearishness. 1/3rd sells by aggressive traders and part booking should keep you comfortable with the Tech table. "Fast rising supports" makes it easier for bears to press it into "Bear zone".
Now we await market's reaction to the worldwide cues but act with the weight of evidence presented by the "Market's Price(EW/TA) & Volume(Breadth) as above". *************************************************************** We have had many structural changes in the market place. Badla was banned. Physical shares gave way to demat shares. NSE was born and nearly ended BSE and small exchanges. Derivative market took depth and width. FIIs, hedge funds moved in. Singapore Nifty commenced. Nasdaq, New York exchnges allowed Indian Stocks listing. Now 23 hours trading.
Somebody show me a chart showing how they affected our stocks and index trading. I did not feel a pinch. Any system is operated by humans and the software is developed by humans only. They may trade faster than you & me. But believe me ...there is always "Something" for "You & Me" on the table. Claim it by continuing to believe in your work. You are ahead of all of them. There is one Warren Buffett..One Jesse Livermoore. All individuals.
I reproduce a mail sent two years ago to a friend: First and foremost....I have nothing new to teach or guide you as you have it in you..You are your own guide , mentor..But sharing ideas with likeminded people do help.. My critic, after losing quite a lot of money in the market, sat down & went thru, the technicals of the market for a period of 2 to 3 years and came to this conclusion:
a. Establish the trend(Directional) by seeing the macd(12,26 period),closing above or below 5 DMA and then take a position preferably after a positive/Negative divergences. b. Set your targets with your support, resistance bands or averages or fibonacci retracements/ targets. c.You trade the market for roughly 52 weeks or 250 trading days and if you can discriminate & choose the best risk/reward days and patiently wait & initiate your trades and manage them with a simple trading plan, I am sure you can make so many winning trades in each year, you can choose to retire early and spend some wonderful time with your family, grooming your children.... Think about that...Let all your trades be boring and not worth talking in social circles but let them give you profits..Manage your trades like how you take care of children..with tremendous responsibility..I'm sure you know the value of each rupee..
One of the greatest enemy to making consistent money in the market is "excitement"..Control it..If your "Consciousness level" is high and your breathing is steady when you trade, you can only win..
Lastly, try and do only positional trades after the setup is right..In my experience, I have seen the best falling by the daytrades.. **************************************************************** Trade/ Invest Idea # 1: Break Outs/ Break Downs: This is the most simplest of all to follow and it does not require great knowledge of TA, EW, fundamental analysis or any other studies. Prices show you the demand and supply changing and settling, only to break out or break down in a particular direction. I have given four time frames and the approach should be for that "particular time frame" only. Knowing the four time frames helps. If you are a disciplined, patient & persevering kind, you can do wonders with this simple method. If you have the time, throw your net wide over a basket of good quality stocks and monitor for "consolidating patterns" and invest patiently. I will prepare other trading/ investment ideas which are easy to adopt but effective in their results. ****************************************************************** Weekly Analysis: T.A: In most parameters, Nifty is in uptrend.(Refer tech. table). Hour charts are nearing "OB" zone. Daily charts may be checked after 2-3 days for "Negative Divergences", if any. EW: The 5th wave is on from 5233 low. Watch it cross over 5367 towards 5400. It can get higher too. We'll come to that once observing the kind of reaction/ correction it gives for the OB hour. The maximum it could go is to around 5500. Once "5s" is done, few options are open to the market. 1. It can reverse and start a major decline with the initial decline deceptively small and time consuming. 2. It can do a simple "abc" correction towards the 4th wave low or lower - 5210 or lower and start on another major move up.
"Golfdude" asked about "Fast fall & Fast rise Moving average (MA)" set ups: A short term moving average (5 sma) cuts below a medium term average(20sma) to confirm a trend reversal and subsequently the 5-sma tries to move up during a corrective rally and fails to reach the 20-sma and turns down again, thus setting up a failed rally and the start of a sharp down move. There were two such "fast fall MA" set ups during the fall from 5400 to 4786 and the same was pointed out. Similarly, once the down trend is over and the new uptrend begins with the 5-sma moving above 20-sma and during a corrective move down, the 5-sma turns down and goes closer to the 20-sma and turns up again without breaching the 20-sma, thus setting up a "Fast rise MA" set up. "Mynac" enquired about the H&S formation in the daily chart: I do not see a valid H&S pattern. Even if there is one, Nifty may go up to 5556(4786+770= for the "other shoulder" (as the first shoulder moved up by 770 points: 4539 to 5309) before a fall. "SBhandarkar" asked about EW labelling - Why "ABC", why not "12345"..?: I try to label them taking into account many large cap stocks and so far it appears to be "ABC" with the "B" wave still on. For eg: RIL is stuck in "b" of "B" and yet to start its "c" of "B". Hdfc, L&T have commenced their "c" of "B" last week. I label the most obvious one but follow it mostly for its direction only which is up presently. The most important doubt comes about the impending larger "C". I feel the "C" wave may correct after the "B" going higher from here and it could be a sideways with a downward bias but not the impulsive kind meaning it may not go much below 4000. My best guess would be "B" towards 6000+ and then a "C" towards 4000-4500. I generally do not hazard such guess works when it comes to corrective pattern as no one knows for sure whether it is going to be a "flat" or "zigzag" or a "triangle". So within this larger corrective, each phase will look quite bullish as well as quite bearish. Why not trade/ invest each phase as each would offer 100 to 200% moves. In the weekly chart below, one can see two "Fast rise MA" set ups and the second one has started two weeks ago. It holds as long as 5100 holds. FII have started to buy again after a sell off in May. It has started big from 11th June, a fact worth keeping in mind. For the coming week: 5225 to 5175 seem to be an ideal place to initiate longs and 5335-5350 seem to be resistances, moving past which more impulsive moves will be seen.Nifty is nearing the channel top in the day chart with some "OB" readings and it may correct the same with time with shallow price dips. 10-sma, fast rising would be a buy the dip point whenever any sharp dips materialises.Keep it handy. OI experts can throw up the possible ranges for the remaining 4 days of the series and I will update more as the week unfolds. = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = I received a file from "Sundar" with instructions to use it during market time. = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = =
The elusive markets keep everyone guessing and that is what we will also do with education. The very short term has 5000 to 5200 range possibility, some of the leading stocks such as RIL, SBI, HDFC give a medium term bullish possibilities which can not be ignored. As of now a move past 5150 has 5215 target and a correction there after and the quality of that correction will have plenty of clues for us to figure out this market. There are underowned stocks: Telecom - already done its first move; Sugar stocks are next in line. RIL, HDFC are on the verge of major moves, especially Hdfc. Positive divergence effect has started to show its effect on Metal stocks. The last average to be scaled is the 50 dma, and holding above that would be bullish.
We should revisit our week end analysis when ever complacency sets in with a sense of knowing all about the markets. Our initial analysis is often the "intuitive one" and markets bring in the "emotional content" with its moves, which were anyway expected, but adds rainbows to it while it unfolds on the monitor screens and sways you away from the path.
Nifty moved right into the middle of that "5110-5165" and poised to go towards "4935" again. A close below that or a fall below 4885 may eliminate the "larger pull back" and Nifty will make new lows.. Grey:(Bullish with immediate short term bearish) - This one has completed "a" of the "2/ B" and has started the 'b" from the high of "5147" , can stretch upto 4960, 4935, 4885. If it holds any of the three levels, it could start a bullish "C" wave up targeting 5200 - 5260. Red: (More Bearish in the short term) - After the "X" wave at "5213", "a" wave fell to 4786 and a "b" wave completed @ 5147 on Friday and the "C" wave may unfold in either "abc" or "12345" fashion. Here too "4885-4935" may act as an inflection point whether "Grey" or "Red" is playing out.
Being down with fever, I am not able to answer my mail this week end but for those who found it difficult to trade the recent times, I wish to remind you just a simple fact: "Have you done your home work before trading and are you confident enough to act on it and have you stuck to this plan of yours..?".
For the easiest of trading strategies, I reemphasize here to "Trade only the divergences" and you will hit more than 80% success rate with a relaxed approach. And there are many divergences to choose from.
"Do what you should do, when you should do it, whether you feel like it or not."
My Observations: In view of +ve divergences appearing in many stocks and some indices, a bounce is expected. Earlier 5110-5160 has acted as strong support and the same may be attempted.
A "Pause" in the fall, "profit booking by Bears" for few days.
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AAR VEE's ANALYSIS:
LAST WEEK FOLLOWUP
1.“TOPI” target ,as mentioned in last Weekend Analysis achieved.
2. Nifty took support near the Weekly and Daily Channel Bottom and 78.6% retrace levels of the 4675-5399 upmove.(see last Weekend charts)
3. Firm Downtrend continues with the closing price of 4931 below all Monthly,Weekly and Daily Close 5EMA.
SHORT TERM
1.Nifty in firm Downtrend below even 3dema (4952) and that being bearishly aligned with 7dema (5007),moving in a channel pattern.
2.The Basic Indicators, Stochs(5,3), Rsi (9), MACD in Daily charts are in Oversold positions with no apparent signs of a reversal. The Indicators in Weekly charts, Stochs(5,3), yet to exhaust in Oversold region , Rsi (14), below 50 at lowest levels in one Year and MACD in sell mode ,indicate further downside.
3.The Tech Table shows that rallies to Daily 5dema at 4982 and Weekly Low ema at 5017 may get sold into. Bullishness to come only on close above Daily high ema of 5020.Major resistance is at Monthly close ema of 5047. Important level of 200dma is at 4995 .5D Volume Profile chart shows a resistance at 5000-5010 levels.
So ,next week,the Resistance zone will be 4985-5020.
Supports are at Monthly Low ema of 4873, 2D low at 4844, Weekly Pivot S1 at 4814 and Channel Bottom Trendlines near 4800 zone .
So ,next week, the Support zone will be 4800-4850.
Now , till there is a close above 5050 ,the Mantra should be Sell on Rallies rather than Buy on Dips.
MISC. OBSERVATIONS AND CAUTION
1.The Nifty Futures Open Interest of May series is at the highest level (2.967 Cr.), of the total series.The Daily Volume Profile and long tails of the Candles in Daily charts indicate that there has been buying at lower levels during last week.
The Next Week being the Series Rollover and Expiry one , if the markets start trading below 4850 levels ,the overall Bearish TA along with high open interest can bring panic closing of the longs in the system and even break 4800 levels to trade below it with target of 4760(ABC pattern),&4725(23.6% retrace of total upmove from March 09 to April 10).
2.Caution should be taken against forming Positional Longs or even carrying BTST Longs till the TA shows firm reversal by the prices closing above Daily Ema ,Positive diversion in Indicators and Bullish aligning of Moving Averages.Refrain from taking long positions based on any Indicator till the Price indicates in the Tech Table to do so. Now till there is a firm reversal ,remain with the Trend and enjoy the slide.
Make ‘Hay’ while the things are going ‘Hay’wire
LONG TERM CHART
The 2 Year Nifty chart shows that on last trading day the 5Dema crossed 200Dma Bearishly ,(from above) .This is happening for the first time after March 2008. Is it the sign of paradigm shift in Market Structure?
Is it the first sign for the “End of The Days” ?.
Regards,
AAR VEE
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I am posting another analysis done by Piyush Sharda:
WEEK: Nifty closes below weekly channel, however another channel with bottom at 4800 is yet to be broken.
Weekly trend wud change on close above 5082 and downtrend pauses at 5017 (week low ema). Weekly 5d has reached o/s but 15 d is 43, 5d yet to turn up. Nifty yet to close below 50 wma.
DAY: Nifty 5 day ma crossed below 200 dma, 5 and 10 dma crossed 50 dma 20 yet to cross. Nifty crossed day lema(4931) .targetting 4982- day ema and day hema 5020. Channel break at 5080 can cause breakout, 5105 is last swing high.Positive divergence in fast macd , stoch and rsi. Day formed a bullish reversal ( bullish counterattack line) Extremely o/s with 5d at 17 and 14 d at 12.
HOUR: Hourly trend has completely turned up with hour closing above hour hema, wedge broken with positive divergence.
OPEN INTEREST: Nifty future oi increasing says that shortcovering yet to happen. ( Bad news for shorts). 4800 put oi increased by 14 % it will be floor looks like 5000 call oi decreased8%, it may not be the ceiling.
BEARISH: The main bearish factors are trade below moving average.
BULLISH: Bullish factors are
1)Bullish counterattack line in daily
2)Positive divergence in daily and price close above lema
3)Breaking wedge with positive divergenvce in hourly
4)Oi increasing with prices moving up ( short covering not happened yet)
5)Options mildly bullish.
LOOKS LIKE BULLISH REVERSAL FOR FEW DAYS, MAY TAKE OUT STOPS BEFORE FALLING AGAIN.
Posting the Analysis for Positional Trade.Have tried to explain through some charts, hope they do the needful.
1.Weekly Chart
The Nifty Weekly chart shows the weakening trend and trading below 20W ma.It gives the Channel Bottom Trendline support at 4800 levels in coming weeks.
2.Daily Chart
The Nifty Daily chartshows the Fibonacci levels for the upmove from 4675-5399 along with the 20 and 50 Ema lines(5175-5185 area) which will act as Major Resistance .The 200 dma line(4982),which is alsonear the last swing low(4984) can act as Major Support. Below which is the Channel Bottom Trendline support at 4800 levels.
It also shows an ABC pattern movement of Nifty with positional target of 4760.
3.Volume Profile Chart(5D)
The last week Volume Profile chart shows high volume areas which will act as Resistances during any upmove in May series.Last trading day selling happened at 5175-80 area which will act as major Resistance as it is also the 20& 50 dema area.
Nifty will turn bullish only above the close of 5200 levels, which are recent highs in last Week trading and Price Rejection area.
4.Misc Observations
(a)The last close at 5094 is below both Daily and Weekly Low Ema. More importantly it has closed below Monthly Ema, turning the overall TA Bearish for this Month.This has happened after several months as shown in the Tech Table.
(b) The tug of war area will be near 200dma .Any upmove from 200dma,(4982) and 61.8% retrace level,(4950) will meet strong Resistance at 5125(38.2% retrace)-5157(Weekly close 5ema ).This area is also a high volume area in Volume Profile.
(c) Weekly and Daily charts have Channel support area near 4800 levels.
5.Personal Bias
It remains Bearish since April first week with positional targets of4800 levels as frequently mentioned .The Monthly SAR for now becomes 5215 closing basis.
I hope ‘MAY’ series settlement may oblige or can extend to early next month as mentioned in last weekend analysis also.
6.Three Month Chart
It is an interesting chart showing line chart for closing price since three months.
For TA educated people ,the pattern may look like abearish ‘Rounding Top’,to a layman like me , it looks like a TOPI (‘Topi Pahnana’ is a desi slang meaning-To trick someone) ,which has been tailored for traderswith 'Buying at Dips' formula.
Thanks,with Regards
AAR VEE
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The few factors that convinced my critic of this downtrend are: 1. FII selling in a big way.
2. Broader market lagging the frontline scrips as shown in the two charts below: Nifty.500 lagging the Nifty.50.(This is his AD ratio)
3. OI keeps rising and the prices falling.
4. The most reliable slow macd trending down in the negative zone below its trigger.
VIX has been bearish and the price chart shows major support of 5350-5400 having broken firmly recently and attempt to stay above it has been failing so far and one more attempt will be on towards 5350-5400 on the budget day.
An ideal scenario for the coming week would be a choppy move upto 5375 to 5405 and then a drop to 5195 or 5097(73.6%/ 80.0% retrace) which would generate a +ve div.
The chart below shows the "Sharp fall scenario" as well as the importance of 5200 for bulls and 5400/5600 for bears.
Revisiting the monthly chart posted few weeks ago hasn't changed our views and the current downward direction being intact with three reversal points:
VIX has been bearish and the price chart shows major support of 5350-5400 having broken firmly recently and attempt to stay above it has been failing so far and one more attempt will be on towards 5350-5400 on the budget day.
An ideal scenario for the coming week would be a choppy move upto 5375 to 5405 and then a drop to 5195 or 5097(73.6%/ 80.0% retrace) which would generate a +ve div.
The chart below shows the "Sharp fall scenario" as well as the importance of 5200 for bulls and 5400/5600 for bears.
Revisiting the monthly chart posted few weeks ago hasn't changed our views and the current downward direction being intact with three reversal points:
I'll be spending some time with my son in his preparations for his "10th ICSE" exams starting from 28th Feb. There could be some delay in updates. Readers who are diligently updating the tech.table, monitoring divergences may update the blog "incase I am not able to do the same on time".
