Tag Archives: positive divergence

Nifty Weekly Technical Outlook for 15 June’15

Stock market is a reflection of an economy, and price is a reflection of state of healfishermanth of economy.  As Martin Pring noted in his book, all price movements have one thing in common: They are reflection of the trend in the hopes, fears, knowledge, optimism, and greed of market participants. The week passed by was nightmare for hardcore bulls and rejoice for bears, however I believe that ratio of bulls should be higher in compare to Smart Bears. In hindsight, move of Thursday was a trap for small fish (read as retail participants) by Fisherman (read as FII’s and few large institutions). Once again last week set an example for us, and we should learn from that, and restrict ourselves from committing same mistakes again and again.

nifty technical weekly view 15 july way 2profits, nifty positive divergence

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Nifty & Bank Nifty Weekly Technical Outlook for 03rd Feb, 2014

Nifty Daily Chart

Nifty Daily Chart

Bank Nifty Daily Chart

Bank Nifty Daily Chart

 

Winners make a habit of manufacturing their own positive expectations in advance of the event. – Brian Tracy

Well, we have to agree with above quote. It is said that if you don’t believe in yourself than nobody is here to believe in you, so first you have to believe in You. Time and again we are saying and it is proved that nobody can stay right all the time in the market, even best of best traders are ready to accept their defeat and that is why they are best and winners, but even to prove wrong you have to have view and confidence in your understanding or for that matter in your trade. Yes, there is very thin line between faith, confidence and overconfidence.

Last week, Bears have confidence in their working and they proved it, but fruits of success were available only for that trader who has smartly taken position on Friday only, because there was choice available on Monday, as market opened sharply lower.

To understand and trade wisely let’s take fresh look on the market and see whether we can take something out of it or not?

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Gold Technical Analysis from 16 Sept’13 Onwards

Gold MCX Daily Chart

Gold MCX Daily Chart

Gold Index Daily Chart

Gold Index Daily Chart

At Way2Profits, we received few request from our readers to start weekly technical analysis on Gold, so we are attempting to give weekly outlook on MCX Gold. We hope our readers will find it useful.

As show in attached, Gold in International market, after forming a rising channel from July’13 onwards, gave breakdown in last two trading sessions. Although, it started correcting after posting a high of 1433 in the end of Aug’13 itself.

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Bank Nifty & Nifty Technical Analysis for 20 Aug’13

Nifty as on 19 Aug’13– 5414.75 (-93.10)    Bank Nifty as on 19 Aug’13– 9145.00 (-305.85)

Selling pressure continued even in last session. Looking at intensity of fall it seems that sellers are ready to sell at whatever price they get, targeting much lower levels. Finally, we have close slightly above 5400 levels. Now, for sure weakness sets in, and every rise should be utilized as selling opportunity, but trader’s needs to be tactical here. Probably on immediate front you might not get quick returns but in longer term, it will be fruitful. If you are long term investor then we think still there is some time to enter into the market.

One important point we like to high light here is that, if we see past history of Bank Nifty, then we have not seen such consistent brutal fall.  There are some moves, but we think this one is special.

Nifty Trading Strategy

On hourly time frame there is Positive Divergence building up, but in such prickly fall relying on this phenomenon is quite risky. We are of the opinion that below 5400 levels, Nifty can show you 5000 levels or probably much deeper correction. We exited from our PE option also.

Bank Nifty Trading Strategy

In our weekly trading strategy, we asked our readers to go long only above 9450 levels, and Bank Nifty opens at 9425 and that was the high. Since from quite a few weeks, we were expecting 8800 levels, but it will come so fast, we had not expected it.

Keep visiting Way2Profits, for unbiased view on the market.

Nifty Weekly Technical Outlook for 24th June, 2013

Nifty Daily Chart

Nifty Daily Chart

Nifty Weekly Chart

Nifty Weekly Chart

Every market moves in the waves form, if you able to catch the direction of the wave than you have won half the battle, half you can win by controlling your emotional factors, and keeping right attitude. Today, you must be thinking that it is just wisdom thoughts taken from some famous author’s book, but dear friend, trust me it is our understanding, and one day as you progress with us, you’ll realize the fact and agree with us.

World markets, whether its Equity, Commodity or Forex all were eyeing on FOMC meetings outcome, and finally it declared, (we are sure you’ll all know details); in reaction to that Equity market panicked and turned down sharply, while Commodity and Forex market witnessed some gains, but everything proved short sighted, market moved in its original wave.

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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.

 

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Positive divergence honored.

Yes, Nifty and Bank Nifty both honored the positive divergence, and moved higher in last session.

Now what should be trading strategy?

Ideally, trader should go long on Nifty with a stop loss of previous days low. But from current market price of 5682.55 (spot) low is far below at 5605. In such case I would recommend going long to my readers.

You can buy 5700 CE in the range of 90-95 with stop loss of 69, or you can also buy 5800 CE in the range of 45-50 with stop loss of 25. Nifty will find resistance near 5800 and where we have opportunity to book profit. So don’t expect Nifty to rally sharply from here, but we should also not miss the trade.

Coming on Bank Nifty. Although Bank Nifty has honored positive divergence, but still it trades below its major 200-day EMA, so I would recommend going long immediately. Yes, aggressive traders can look to buy Call options or Sell Puts, but it all depends, how much risk you would like to take.

CNX IT also shows some positive signals, but I sense upside is limited from current level, so better we should not take chance there.