Calm before the storm

[rahulg77]

Yes agreed kuldeep.

Regards

Rahul

 

[kuldeep49]

Steady upwards progress continues for Nifty. I have attached the weekly chart with ADX giving a good positive signal. It is possible that 4150 may be achieved before the inevitable correction (Dusant has targeted 4150 in his thread!). This may be possible in December.

 

[rahulg77]

Hi Kuldeep,

How are u doing? If its not too much of a task could u please explain how to use trix in conjunction with ADX. Also since the period chosen in trix removes the volatility in that period....do we have to change the trix setting for diff settings?

what is a desirable period to use for trix and its sinal line

Rgds

Rahul

 

[kuldeep49]

The long awaited (but, in most cases unplanned for) correction is here and quite a few were caught napping. This morning was a classical bull trap ... nifty rose, then drifted and finally when there were sighs of relief that the worst was over, the storm broke! Have attached weekly, daily, & intraday charts. Here is what I have observed:

1. In weekly charts, one sees that most major corrections have lasted at least 3 weeks. So, going by the same thumb-rule, one can expect this correction to last at least till this friday or even till christmas. After that there may be a drift till after new year when the holidays end. That will also be when the third quarter results will start to make their appearance.

2. In the daily charts, nifty has closed below its 50 DMA for the first time since June. Fibonacci supports are now at 3713, 3585, 3321. Nifty will also take strong support at 3640 & 3600. Shorting may be considered as an hedge keeping appropriate stop losses.

Interesting times ahead!

Cheers
Kuldeep

 

[kuldeep49]

END OF PULLBACK? or DEAD CAT BOUNCE?

Looks like either one, though I am in favour of the first. Chart attached. Nifty took support at 3650 whence a steady & sure rise began. Still below 50 SMA though. Confirmation of resumption of uptrend would be if it took support of the 50 SMA tomorrow after breaching it. In that case, 3900 would be the next target. If, however, it is a 'Dead Cat Bounce', then my yesterday's post would be significant.

Interesting times ahead.

Cheers
Kuldeep

 

[kuldeep49]

In weekly charts, one sees that most major corrections have lasted at least 3 weeks. So, going by the same thumb-rule, one can expect this correction to last at least till this friday or even till christmas. After that there may be a drift till after new year when the holidays end. That will also be when the third quarter results will start to make their appearance.

Today's move downwards seems to confirm my observation made earlier. This week, too, is likely to end in the negative zone. I have attached the weekly chart showing that there is a breach downwards of the 17 week long uptrend channel. Going by the Fibonacci retracement, 3713 is the next support, so one can expect that to be the first target for shorts. Likely to be reached by this friday.

On the upside Nifty is facing resistance at its 20 DMA as seen from the attached daily chart.

ADX, too, shows a bearish tendency.

Good opportunity for going short and then next week picking up some good bargains.

Cheers
Kuldeep

 

[saravanank_hb]

I think the markets entered short term downtrend..may be consolidation phase ranging atleast 1000 point range..Bse may take earlier peak 12700 as support..but the way OI built is seen..we might reach it very fast..