Tag Archives: negative divergence

Nifty & Bank Nifty Trading Strategy as on 22 May’13

Nifty as on 21 May’13– 6114.10 (-30.40)    Bank Nifty as on 21 May’13 – 13066.50 (-115)

Nifty after posting a high of 6229.45, moving lower from last two days, missed by margins to retest the highs of 6338.50. As I have mentioned in my article that momentum is not in support of rise, and that is what is happening.

It is little early to comment confidently that winds have turned and now it is time to go short on the market. Keep patience which will always pays you.

After posting a high of 13414.30 on last Monday, Bank Nifty is started sliding down. It seems that Negative Divergence is honored, and based on my observation I think Top is done, but still I prefer to stay silent.

  Continue reading

Nifty Technical Outlook for 20th May, 13

Nifty as on 17 May’13 – 6187.30

Nifty as on 17 May’13 – 6187.30

Nifty as on 17 May’13 – 6187.30 (+80.05)

Nifty as on 17 May’13 – 6187.30 (+80.05)

From above charts of Nifty, few things I would like to high light here.

  • As we already know that Bank Nifty has not only tested but settled above its lifetime high, whereas Nifty still laggard. From Friday’s closing, Nifty has to run from 151.20 points to retest the swing high of 6338.50 posted on 5 Nov’10.  As such it is not very big target for Nifty, but sometimes even you can lose match at last ball, you never know.  Continue reading

Bank Nifty Technical Outlook for 20th May, 13

Yes friends, it is not a just coincidence, when in last weeks article, we mentioned that “Bank Nifty Marching ahead to test all time highs…”

At Way2Profits, we always say what we feel.

Bank Nifty as on 17 May’13 – 13317.10 (+536.95)

Bank Nifty as on 17 May’13 – 13317.10 (+536.95)

From above charts of Bank Nifty, few things I would like to high light here.

  • In the last week Bank Nifty already tested all time highs of 13303.60 and finally settled higher at 13317.10, whereas Nifty is lagging far behind to test these highs

(To read further download the article)

 

 

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.

 

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.