Monthly Archives: February 2013

Technical analysis of Gold

Gold as on 22 Feb'13 - USD 1581

Gold as on 22 Feb’13 – USD 1581

In the International market Gold is falling due to variety of reasons, there are much strong fundamental news flowing around, but I would like to draw your attention towards some simple technical observations.

As you can see in above attached chart that, Gold is falling in a channel line from beginning of Oct’12, and in last week only it gave sharp dip below lower channel line, which was indicative of strong selling pressure (I would not discuss any fundamental news attached). Channel has validated its authenticity in past, so if prices moves again in the channel line, than it is one signal where we can go long in Gold, but you can’t expect prices to touch upper channel line this time.

Secondly, momentum oscillator RSI (14) has reached historical low of 20, I have marked with red circle in chart. By this, please don’t expect bounce in prices, as prices have tested oversold territory, No. In past very few time RSI has tested this level in Gold chart, and whenever it has tested this level, prices consolidated and moved slightly lower. Confused, let me clear. From here on, prices may consolidate further and it is possible that after normalizing momentum we might see one more dip in price, but such dip should be utilized as a buying opportunity, by looking at divergence between Price and RSI, I hope I made it very clear. You have to keep little patience here to grab right opportunity.

Few of my friends must be betting that prices will retest its low of USD 1527 made in May’12, but does it make any difference, whether prices test this level or not, major damage is already done.  This time prices made a low of USD 1555.

I would not recommend to place stop loss below this level and take a long position, although it looks good, but I sense that we might see one more dip in price, and that should be utilized, by looking at price pattern at that point in time. Yes, aggressive traders can take minor longs as and when prices move above this channel line, which is coming near USD 1590 (prices should give close above this level and stay).

Lastly, on broad level, I don’t expect Gold to ride further and even testing its Major High near USD 1930.  Gold has shifted its range, expect it to stay consolidate to weak.

I welcome all your feedback and suggestions.

 

Why you want to become a Technical Analyst?

Myself working as technical analyst, but trust me if you would have asked me above question few years back than I was not able to answer you, in fact nobody asked me. I tried and struggled and that is why I am here. But still struggling to become good technical analyst (because perfect word does not fits into learning, it is a never ending process and so the Technical Analysis). So, I am one of the student of technical analysis, and would try to help you with my little knowledge and experience.

learn technical analysis-way2profit

Learn Technical Analysis

By looking at my LinkedIn profile many ask me about vacancy in my company and my experience in the field, many asked me what is the way to become Technical Analyst?. I tried to answer them in my way of style.  But one thing is common, every time I asked to aspirant candidate, why you want to become a Technical Analyst? And genuinely I tell you many gave me such foolish replies and some believed that I am asking them just out of ego, they had a feeling that I am trying to insult them, and accordingly they gave some derogatory replies. But dear friends, if you enter in real world and market, than situation is quite different, it is not as simple as you think of in your dreams.

Let me tell you my personal observation and experience. Even best of technical analyst, who are best and perfect at their work, don’t care to reply to your queries, simply they are money minded. Whether you understood or not, whether you are on track or not, they don’t bother for that. Many are sweet poisons, they talk to you sweetly and finally attract you towards their tuitions or services to mint money from you, and this how it is one surreal fact. I started learning by spending money and not on just by Google it everything, because I strongly believe that Technical Analysis is an Art and not Science.  On internet you can learn some methods but not an Art, for learning an Art you have to have go for some professional classes.  Even there are many frauds, who run their Technical Analysis Shop, you have to safeguard yourself from them also, because if you Google it everything and then there are high chance that you fall in their trap.

So, before entering in to this field, you should ask few questions to yourself.

  • Why you want to join Technical Analysis? (I can’t comment for other industry or profession.)
  • What attracts you towards Technical Analysis?
  • After learning what is your next step?

If you are really serious about Technical Analysis, than try to answer this question and send me your reply, I will try my best to give you best out of you.

You can get in touch with me on my mail way2profits.24(at)gmail(dot)com or Contact Me

Awaiting for your answers, keep asking…

way2profits

Update as on 21 Feb’13

Nifty as on 20th Feb, 2013 – 5850

Yesterday, we trailed our position with cost price, and it got triggered. It seems that Nifty will weaken further, but somehow I believe small traders will not earn much out of it. As I am risk-averse kind of personality I would recommend to buy puts or take only intraday selling opportunity by any pivot system like many a times I like Gann Square of Nine, to play in intraday.

Bank Nifty as on 20th Feb, 2013 – 12064

Bank Nifty is standing on verge of giving breakdown, one or two weak close can drag bank nifty further lower, what you saw today is just a trailer. But always follow systematic approach. Buy puts and stay calm, because weakness is not confirmed yet, according to me.

Can I build portfolio based on Technical Analysis?

If this question arises in your mind, and you are looking for right advice on it, than please read this article.

Let me try to answer above question.  To me obvious answer is Yes, you can certainly build portfolio based on Technical Analysis. Simple argument is for building portfolio you should ascertain some methods through which you can acquire good stock and which has a potential give you good returns. Broadly there are two approaches to derive a method, one is Fundamental analysis and another is Technical analysis. Within both the approach there is n-numbers of methods which anybody can use. Now which approach you choose and accordingly which method you choose, it all depends upon a individual selection.  No matter, which method you choose for short listing process, ultimately your short listed candidate should do well, that is the purpose or ideology behind building a portfolio, right?

If you are serious about making money than you have to be serious about learning concepts and methods, there is no choice to it. And let me tell you very frankly, if you learn one or two concepts from internet than there are high chances that you might trap in wrong hands, because on Internet you find 8 out of 10 who writes on subject doesn’t know nitty-gritty about it, they are writing for their pockets. I will not go in detail, if you want to know further than better read my article on it – Be aware of blog marketers.

Now, I focus on core subject, building portfolio based on technical analysis. Please, don’t expect that I will teach you some Holy Grail method here, as such there is none, and if you come across one than please do let me know. But what I am trying to emphasize is that, if you thoroughly apply even some basic rules of technical analysis than also your portfolio and your performance will improve significantly.

Further if you have any query or you want to learn technical analysis feel free to get in touch with me, I will try to answer your query.

way2profits

Update as on 20 Feb’13

Nifty as on 20th Feb’13 – 5964.30

It was quite frustrating day, as Nifty remained range bound during whole day and closed with weak candle, which makes me more cautious now. I would prefer to stay long with trailed stop loss as my cost price.

Bank Nifty as on 20th Feb’13 – 12410

Bank Nifty did not move above level of 12515, so my trade is not triggered and now I will look for fresh setup.

Bank Nifty ready to move?

Bank Nifty as on 19th Feb’13 – 12450

Today i.e. on 20th you will get the answer.  I sense Bank Nifty is on verge of turning up positive, but it will be slightly early to confirm it.  I will be waiting for bank nifty to rise above 12515, where I like to take long position in it, with a stop loss of 12330.  Reason why I am skeptical, because as of now heavy weights are not confirming the fact, so we should be trading with more cautious approach.

Please don’t take this as a trading recommendation.

way2profits

Nifty as on 19th Feb’13 – 5960

As expected yesterday, Nifty moved higher, but it happened in last two hours.  Anyways, we are long in Nifty.  Today, I got one signal and now I am waiting for next confirmation to come above 5980 (close), where I would like to add on long position with stop loss near today’s low of 5885.  Still I am cautious and we’ll see for tomorrow’s price action.