Daily Nifty Analysis

[Dusant]

Daily Nifty Analysis for 5 Oct 06


These are my personal musings. These are not in any way meant to be trading advise. To view the chart, check the link below.

I am human, and I was positively exultant when the market opened with a gap up. However, after I sit back and look at the chart at the end of the day, I need to plan my day ahead.

Stepping back a little, we must take note of the fact that the Nifty has run into the resistance zone. The probability is extremely high that the Index would indeed continue its upward journey. But we must be prepared for any eventuality. A stop for longs could be placed slightly below the low of yesterday.

Those among us, who are short, could wait for the marked out level, where most of the stops are going to be bunched together. However, I would not suggest readers to be short, as the Nifty has made a short term bottom, which is much higher than yesterdays low.

Prepare the fireworks for Diwali.

 

[Dusant]

Daily Nifty Analysis for 9 Oct 06

These are my personal musings. These are not in any way meant to be trading advise. To view the chart, check the link below.

The extreme short term trend is still down. However, if we step back just a little, we could notice a sideways correction, which is in the nature of consolidation.

Apart from this, there seems nothing more to add from Fridays analysis.
Quite a few people have contacted me directly on chat, saying that I am a fool, and I do not know the meaning or interpretation of certain technical patterns.

It does happen that we fall into the classic pattern syndrome. I would only suggest readers to please keep your mind open, and be prepared for any eventuality.

And keep in mind that the probability still remains upwards.

Dusant

 

[amitt29]

Dusantji,you are doing a fine job,and beauty lies in the eyes of the beholder.
Also there shud be no "c**k showing off"(pardon my language)everybody sees the same thing its only the interpretation that matters and that makes the difference.
U pls continue your fine work.Ive come across ppl like these at Yelnick and everywhere else.We just need to keep moving on.

Warm Regards.
Amit

 

[amitt29]

Dusantji,waiting for your analysis.

Warm regards
Amit.

 

[Dusant]

Daily Nifty Analysis for 10 Oct 06

These are my personal musings. These are not in any way meant to be trading advise. To view the full chart, check the link below.
There still seems nothing more to add from yesterdays analysis. The extreme short term trend is still down. The intermediate and long term trend is still up.
For longs, I would like to place my stops a little below 3510.
This type of volatile market will give jitters to both bulls as well as bears. How do we trade this market then? I have three options. (i) Enter at lower levels, (ii) short at higher levels, or (3) stay away.
We need to plan our strategy according to the time frame of our choosing and risk appetite. That is the basic essence of trading this volatile time.
And keep in mind, I still maintain that the probability still remains upwards.

 

[Dusant]

Daily Nifty Analysis for 11 Oct 06


These are my personal musings. These are not in any way meant to be trading advise. To view the full chart, right click and open in a new window.

As has been consistently suggested over the last week or so, the extreme short term trend has been biased down, while the intermediate trend is still up. The patterns forming on the Nifty hourly chart are also suggesting the same.

If the bottom of today holds, then it is forming a triangular consolidation pattern, which suggested that the bulls do not want to allow the would be bulls to enter at lower levels.

The highs of the last few days has also been violated, which I do not interpret as an extremely bullish sign, as this stage. It seems that the stops of the bears have been run today. Soon another foray of bull stop running may also occur.

In any case, from this price action of the Nifty, it does not seem that the previous bottom of 3510 is going to be violated. In fact, I am assuming that the lowest the Nifty would see at this stage is 3530.

Therefore, it is suggested to plan your trades according to that.

 

[karthikmarar]

Dusant

Would like to share a few thoughts with you.

Today, the nifty was held up a few select stocks. The Advance decline ratio was a poor 13 : 37. The four biggies of IT sector Infy, satyam, wipro and TCS whose combined weight of the nifty is 17.3% held up the nifty. In fact Infy with its 5.65 weight shouldered the nifty from further lower values. But for Infy we would have seen the nifty at much lower levels.

Whole market picture is rather miserable..

A/D ratio = 216 / 724

Nifty junior = -1.36 %
Nifty Midcap = -1.27 %
Nifty 500 = - 0.67%

So it is very clear that but for a few heavy weight the overall market fared very poorly indeed, much more than the picture presented by the Nifty.

Dont we have to look at our analysis in this perspective rather than blindly following the tenets of Technical Analysis? Would like to have your views on this..

Regards

Karthik

 

[Dusant]

Hello Karthik,

It is a well known fact that any Index is a sentiment indicator.

Further, it is also well known that sector churn is a reality in the market. It is an also known fact that the indices are subject to manipulation especially by large market makers, to squeeze the weak players out, and then tempt them to enter at astronomical prices. This is very common near or on the day of derivative expiry. The wild fluctuations in a HLL or an ONGC are proof of that.

This is not only valid in India, but the world over. Option Trading books by McMillan detail this very clearly for the USA markets, including how programme trading is used to run stops of bulls and bears.

Analysis of the Index is purely a means to gauge sentiment. While trading individual stocks, we have to follow the very same principles of analysis, what I am doing for the Nifty.

The other sentiment indicators mentioned by you certainly do have relevance while trading stocks.

If we do not plan our trades following the tenets of Technical Analysis, what other yard stick so we have to trade?

I hope this answers your query in a satisfactory manner.

Dusant

 

[Dusant]

Daily Nifty Analysis for 19 Oct 06


These are my personal musings. These are not in any way meant to be trading advise. To view the full charts, check the links below.

It has been a few days since I updated this thread. Nevertheless, nothing has changed since. The trend remains up. In fact, the first two charts are those of Friday the 13th, when the market gapped up.

The gap created last week, was tested today. Successfully, I may add. The gap is still open. I would seriously sit up and take notice only when the gap would be closed. That would tell me that the market is now facing pressure from the bears. As things stand today, the bulls already in the market, do not want the sidelined bulls to enter at lower levels. As a result, their endeavour will be not to allow the market down.

It was amusing to see a flurry of messages that shorting time has come. To those top pickers, I would very humbly suggest to wait for a confirmation of weakness, rather than try and sell at the market top.

Dusant

 

[Dusant]

Hello Readers,

First of all, on the occasion of Diwali, here is wishing you all a very happy and properous new year to come.

With two holidays coming up, it is obvious that no serious trading commitments are being made.

The real technical position will clarify only when this roadblock is passed.

I have been mentioning all along that Diwali was going to be bright, and indeed, it has turned out so.

I hope you have taken advantage of it.