Category Archives: Indian Market

What to do now???

Hello Friends,

Today I got a chance to speak to one of the subscriber of Gann Square of Nine Method. It seems in last couple of days he lost his hard earned money and obviously now he was in search of some black box system which should work in all market scenario. He asked me few questions and i thought this questions are not only his questions, but in general all the participants must be thinking in the same way. Hence this article.

  • Friends, first look at this chart Nifty. I had nothing but drawn a simple trendline from the lows of Jan 2016 and adjoined to next two important swing lows, out of which one trendline is already broken and another is about to test in days to come, or God Knows if it will tested just today itself. Point of support based on this trendline is somewhere near 10180.
  • Secondly, on chart 14-pd RSI is plotted on down, where one may clearly see that RSI has broken the previous swing low, whereas price has not which is 9951. So in technical terms it is called as Hidden Bullish Divergence. Which indicates that after tremendous selling pressure possibility of pullback can’t be overruled.
  • Next one may see INDIA VIX which has made a high of 20.48 and lastly settled at 19.73.  On 8th Feb,18 it made a high of 24.035 wherein from it cooled-off. Importantly if we see in past, even after VIX cools-off from the highs, prices may continue to decline initially and after few days it starts recovering. So, it is better to assume that INDIA VIX may initially rise and eventually it starts cooling-off but that does not indicate bottom reversal.
  • And lastly one more important observation, If we see Average Range of Nifty, it has shot up dramatically, and it is not only Index but Average Range of most of the stocks has tripled, which is not obvious.

Now, how to interpret this data and how to poise ourself in the market. First and foremost you have to decide, why you are in the market,

  • For Excitement and Thrill
  • For taking Revenge
  • For making Money

If your answer is 1 or 2 then you are most welcome and enjoy the ride, but if your answer is 3 than my sincere suggestion is to wait for a while, no matter how good you are or bad your system is. Mostly none of the system discounts such a high volatility with such a wide Average Range. Take your prudent judgement and save your money from big time loss. If you are Investor than start accumulating selected stocks in a staggered manner. And if you are Trader than Just Relax, wait for VIX to come in its territory and wait for Average Range to switch to normal course.

Friends, i can give you couple of other points of analysis, but don’t want to confuse you much. I try to keep it simple. If you have any query feel free to ask me. I will answer you for sure.

New Year Trading Resolutions

New Year Trading Resolutions.

–          I will not over leverage my trading portfolio

–          I will follow risk management tool in best possible manner.

–          I will try to control my greed, and fear.

–          I will not get trap in Multi-beggar ideas.

–          I will diversify my portfolio, and will take only risk which is feasible for trading style.

–          I will prepare my trading diary and keep note of all my trades.

We came across many traders, who actually picks the best but stuck once takes the overleveraged way, and than they stuck more to justify their position and view. We don’t understand why you need to overleveraged yourself. Please make one thing clear, with capital of just one lakh you should never ever try your hands in Futures, very few are luck who makes profit out of it, otherwise, you are bound to make losses. Try your hands in futures market when you have sufficient capital in your hand and sound understanding of the market and trading dynamics.

L& T Technical Analysis as on 26 Apr’13 – 1540.85

L&T as on 26 Apr'13 - 1540.85

L&T as on 26 Apr’13 – 1540.85

Larsen & Toubro Ltd is moving consistently moving higher after posting a bottom of 1313 on 9 Apr’13. In last 11 trading session L&T made a gain of more than 17%. Yes, whopping 17% gain. Lastly stand at 1540 reached near a point where multiple resistance pivots will come in play.

But, we should notice some important points here.

  • From beginning of 2012 L&T is making higher highs and higher lows.
  • After posting 1720 in end of Oct’12 prices were moving with weak bias, and lastly on 9 Apr’13 it made a low of 1313. This was loss of around 23% in more than 5 months. And we witnessed gains of 17% in matter of 11 trading sessions only.
  • As it is marked in attached chart, momentum oscillator RSI (14)  gave clear indication with forming Positive Divergence between price and oscillator. And lastly RSI (14) gave a minor Negative Divergence, but still it is very early to comment on it, as this divergence can be easily negated.
  • From last Monday onwards, prices are moving above its 200-day EMA, and with that prices also moved out from Falling Channel line.

From above observation, I sense that still there is scope for L&T to move higher, subject to, prices holds above this 1550 levels where multiple resistance comes as hurdle to prices, and according to my observation, Nifty and Bank Nifty may witness minor pullback in days to come. So it can be threat for L&T too. As long as L&T holds above 1490 level, I would like to maintain my bullish stance on it. Of course risk is involved, but if L&T holds above this level than it has potential to go much higher.

Alternatively, below 1490 prices may enter into consolidating phase and start weakening, but weakness will be confirmed below 1450 levels.

At this point in time, both possibilities have an equal chance to run its course. So we don’t have a choice, but to take risk or keep close eye on it.

Dear readers, please share your view with me, whether you like my articles or don’t like, it add value to your trading? Because I believe in saying what I feel, I never cut, copy and paste any articles, and never try to misguide anyone. Your opinion is important to me, please come ahead and share.

 

Reliance Infra – Technical Trading Strategy

reliance infra

Reliance Infra

Reliance Infra as on 22 April 2013 – 382.45

In the last session prices moved sharply higher. I sense that this rally will continue, based on my technical observations.

Trading Strategy –

Ideally, due to yesterday sharp rise we should wait for better entry level in Reliance Infra, near 373-375 level (cash), with this buy trader can put stop loss below 355. Initial target is around 415.

Or alternatively,

Traders can Buy Rel Infra call option of 400 strike price for next month expiry, which is lastly closed at 15.90.  Don’t jump to buy, as premiums are high at this level, enter near 12-13 range, and based on cash level. Stop loss will be 355 only.

way2profits

View on Nifty and Bank Nifty

Nifty as on 12/04/2013 – 5528.55

Bank Nifty as on 12/04/2013 – 11410.10

Last week I was expecting Nifty to test 5445-5400 levels, but it tested 5477 levels, and then traded in a choppy manner, where many full proof trading strategies failed, which were well acknowledged and traded. Anyways it is the part and parcel, you cannot expect 100 out of 100, if you are, then you fooling yourself. On above I have lot to say but topic will get divert.

Coming to markets. Broadly speaking market is in midst of indecision, where both parties are really struggling to drive the market. I sense Nifty should take U turn in coming days, as most of the stocks are showing initial signs of recovery, Bank Nifty and its components are showing some early positive reversal signal, only spoil sport is CNX IT index which was moving as per expectation.

So, Nifty on staying above 5400 level are likely to stay on a positive note.

Trading Strategy –

As markets are giving early signs of reversal and there is no solid confirmation. In such scenario trader should opt for options. I expect Nifty to trade with positive bias, so Buy the Call options, where risk is limited and profit potential is unlimited. Traders can apply similar strategy on Bank Nifty as well.  I am not recommending any strike price here, as I keep it open.

way2profits

It is just a Dead Cat bounce or Nifty will rally?

Weekly Outlook –Nifty Spot as on 8 March’13 – 5945.70 

Last week was quite an eventful, nifty moved sharply higher.  And if my readers remember than I have mentioned in my previous article that I will turn my attention on long side only if Nifty spot moves and close above 5875, below which I see every rise as a selling opportunity, but Nifty successfully moved above 5865 on Thursday itself, which was very much evident that Nifty will turn bullish again.

Coming to current situation, I believe Nifty has broken heart of 60% (not based on any data) Bears but still there are few Bears are left, they will be killed once Nifty moves above 6000 level. So it is advisable to take minor longs for now, keeping stop loss below 5875 and increase your position once Nifty moves above 6000 mark, and mind it, if it happens than we’ll be seeing new highs soon…. But keep your fingers cross, still we are sure by 60% and not 100%.  Rest you know how to trade.

I know with some fans there are lot of critics available, and they must be thinking that I am talking on two sides, but for them I am attaching this link, I request them to please read that, I am sure all your doubts will get clear.  Read article

Eight reasons to visit my blog…

Let me put it this way, why you are here for now?

  • One possibility, you may very well know me,
  • second possibility, you must be searching for something and accidently you click on an article and you are here.
  • Lastly, I believe you are passionate about Technical Analysis.

From the give three broad reasons, you are here and reading my blog.  Now question comes do my write up attracts you or not? Why you should come again and revisit my blog, than let me give you eight reasons to revisit my blog.

If you are trading Indian Equity markets, than I am sharing my views here.  Like I have shared this-

If you are trading Agri-Commodities and Precious metals, than here I share clear views on highly traded commodities.

If you are Forex player, than I also share my views on Global Forex pairs, as well Indian Forex pairs.  Like I have shared this-

If you are looking for medium to long term price forecasting on any given asset class, than please share with me, as I can share my posts on requests, which is not published directly on this blog (don’t worry it is not charged)

If you are Jobber or scalper than in this blog I share trading strategies which are very much useful for intraday trading.  Like I have shared this-

If you are a learner, aspirant technical analyst, than you will get many things to learn from articles.

As my reader knows very well that I share my views on market in very straight forward manner, with applied strategy, while keeping ambiguity aside (sometimes you can’t do anything when market tells you No to do anything), and I promise to do in same fashion in future also.

M&M – Selling Opportunity???

Currently Mah&Mah is trading near 930.

Technically, it has broken its rising trendline, and momentum is waning.  M&M witnessed sharp rally from 620 odd levels to recent 975; in last 4 odd months trendline is respected and prices witnessed bounce thereon, this time trendline is broken and it seems that prices will fall further.

Mah&Mah

Mah&Mah

I agree that long term investor will not agree with me, to go short on M&M because on broader level picture is still rosy, and I will totally agree with them.  What I see is trading opportunity to go short on M&M at current levels, keeping stop loss of 955, with 1st target would be around 890 levels.

Today Nifty gave Dark Cloud Cover, indicating weakness in Nifty.

Gail – 354

At current price Gas Authority of India Ltd is trading at 354.

Technically, stock is trading very close to its Major 200 Day Simple Moving Average (DSMA) since from few days.  Momentum oscillator MACD is trading with Bullish Convergence, whereas ADX has reached 19 levels, which indicates that momentum has not picked up from last few days.

GAIL - 354

                                                            GAIL – 354

I see here a buying opportunity, as MACD is about to reach “0” line from below, and I expect momentum to pick up gradually.  Also stock is just trading below 200 DSMA, so as momentum will pick up stock will shoot up.  On flipside, if this hypothesis goes wrong than, it is very much possible that stock will move down quickly, and to support that fact we can see Death Crossover taking place (50 DSMA crossing 200 DSMA from above).

Keeping above things in consideration, I advise to initiate long above 360 level keeping stop below 349, eventually I see prices to test 385+ levels.  Risk-averse traders can wait for close above 360.

(PLEASE READ DISCLAIMER BELOW)

 

Grasim – Sell on Rise.

Grasim Inds at CMP- 3171 looks like a selling opportunity to me.  In below attached chart, it is depicted that prices is already broken support of 23.6% Fibonacci Retracement of last up move from low of 2210 to 3505.  Also prices has formed double bottom near ~3150 levels, once this level is broken prices will move to test next Fibonacci support at ~3000 levels.  Momentum oscillator RSI (14) is also showing initial signs of waning out.  Risk involved in taking short is, stock can move higher by taking support near 3150 (forming triple bottom).

Grasim Inds

                                                            Grasim Inds

Risk-averse traders can initiate short below 3150 levels, with strict stop of 3250.   Risk takers can use rise up to 3250 as a selling opportunity with stop loss above 3400, targeting 3000 and lower levels.

(Please read disclaimer attached below)