Category Archives: Harami

Harami is a two candlestick pattern in which a small real body holds within the prior session’s unusually large real body. The harami implies that the preceding trend is getting ready to conclude.

Bank Nifty & Nifty Trading Strategy for 03 July’13

Nifty as on 02 July’13– 5857.55 (-41.35)    Bank Nifty as on 02 July’13– 11614.25 (-100.65)

nifty harami candlestick pattern - way2profitsIt seems Bulls caught in trap!!

In the last session Nifty gave perfect Harami Candlestick pattern, which signifies that preceding trend is getting ready to conclude, although we don’t have long trend to talk about, but in short Nifty gave such candle near 50% Fibonacci Retracement of last sharp fall and as it can be seen here, just above its falling trend line also. In fact, even yesterday we were little skeptical about existing trend of Nifty, and we mentioned about our concern, and our view got vindicated. Anyways, it is just one candle, and no need to get panic, bulls have sufficient chance to get exit or lighten position, but yes, if today market gives weaker close, then everybody will start talking about retesting of low or optimist bulls will talk about 5700 levels. Analysis is perceptions, don’t you think so!!!

Nifty Trading Strategy

Now, there is one probability that Nifty will get stuck in a narrow range, if could not manage to break below 5815, or move above 5905. Aggressive traders can go short with a stop loss above 5910 levels, with target of 5815 and 5750.

Bank Nifty Trading Strategy

Bank Nifty remained range bound in the last session. It seems that Bank Nifty is setting stage to fall. Again, aggressive traders can go short in Bank Nifty below last sessions low of 11590 (prefer to go short below 11575) targeting about 11450. There can be surprise on the long side, but that call can be taken only after Bank Nifty moves above 11750.

Nifty Trading Strategy as on 29 Apr’13

Nifty as on 26 Apr’13 – 5871.45

Nifty as on 26 Apr’13 – 5871.45

Bank Nifty as on 26 Apr’13 – 12533.15

Bank Nifty as on 26 Apr’13 – 12533.15

Week ended on a negative note, but week on week basis Nifty and Bank Nifty closed with gains of 88.35 and 244.90 respectively.

As depicted in attached chart, Nifty closed with candle of Harami, which is clear cut indecision amongst market players, and first signal to alert us that existing trend may not continue further. Also there is negative divergence set in between Price and RSI (14), which developed near overbought territory, in Nifty and Bank Nifty both.

Nifty Trading Strategy

Once Nifty moves below 5850 level, traders can initiate short call with stop loss above 5910, initial target would be around 5800 and if prices moves below this level than next target comes around 5735 level. Risk-reward is not much favorable, but it is like this only. Alternatively, long position opens above 5925.

Previously given 5900 CE option closed at 86.30, it is advisable to exit from this position, considering setting weakness in Nifty.

(Previous Strategy – Nifty Trading Strategy as on 26 Apr’13 )

Bank Nifty Trading Strategy

Once Bank Nifty break Friday’s low of 12470 and crosses 12450, than traders can initiate short position with stop above 12700. Initial target comes near 12000 and next 11800.

I asked risk-averse traders to exit from 12900 CE, and it also hit 30 Rs stop loss from cost price.

P.S.- Medium term bullish trend remains intact, and current technical pullback should be utilized for buying opportunity, as we see some reversal signals on the chart.