Food for Thought........!

[S S]

Hi Gourav !

Thanks for your kind words.

But let me clarify. I do NOT give any guidance

I try to put a 'worm' in everyone's mind to make one think and act suitably and responsibly.

To spend the money, one does NOT need any brains....but to earn and invest properly, one does. It is therefore essential for everyone to understand and learn to take proper care of one's money.

I provide food for those, who enjoy thinking and use their brain power wisely.

But I only give my view points, which could be wrong, and one needs to take one's own decision.

Therefore no credits or dis-credits to my account

Cheers!
SS

 

[S S]

Hi!

So, on the weekly chart, we find a perfect Doji. For those, who do NOT know what a Doji is, it is a candle which has the open & close at almost same levels, and has the upper and lower wicks to show the volatility.

This also means that while the market tried to move up or down, it could NOT sustain due to indecisive minds of the traders.

While the lower wick has is formed due to the early part of the week, the higher one is during the later part of the week.

So one may consider that the week ending was with a resistance around 4680, as was pointed out in one of the earlier postings. This is the second time this level has acted as a resistance on the weekly chart. since the downtrend resulting after the all time high of around 6357 in Jan 2008. But it had also acted as a resistance prior to that, in July 2007.

Am I speaking too early? I do NOT know. There exists a probability of markets still trying to break 4680 and go above. But I have my own doubts.

Like Murtaza said on 1st June, we have just completed the Fib requirements of 13 weeks, and it appears that rain is NOT in sight, I would rather take the markets to start moving down during the next week.

My opinion and I could be wrong.

Cheers!
SS

 

[MurAtt]

Dear S S,

Thanks for your Regular explanations which helps US - The Learners - to know where to look for and what to do everytime the mkt has a new trick up its sleeve.

At close or rather 5 mins before - in the NF Trading thread - we were discussing doji, inside/outside bar (daily & weekly) and the close would eventually decide whether it is bullish or bearish.

At close it was bearish BUT after adjustment of Nifty,it has become a Green bar. Would it now become a "Bullish Engulfing Doji". If so, would 2 pts on adjustment change the whole markets perception!!

Also it still is a Doji and that too at the top of the rally (as of now we've already had 2 dojis in this rally itself and we've managed to cross over effortlessly) BUT we need to have a confirmation bar which should not break the top wick (or candle) of the doji, rather break the lower wick and that too on a weekly basis. Even harcore Bulls are wanting a small correction (to sustain more upmove) -- do not you think that a contrarian approach would be beneficial --- from 3100 its always been contrarian -- what say.

Thanks

 

[S S]

Hi!

As per the 61.8% Fib level, around 4790 appears to be the target, and this Doji is almost 100 points below….adjusted close or otherwise. Theoretically, it leaves a chance for upward movement…… and the US markets were in the Green yesterday.

But I would still consider this Doji as bearish. It is a weekly candle and the top wick is during the later part of the week, showing the fall from High to Close, and hence trending down.

In addition, I feel that around 4680 is the high resistance zone. With Advance-Decline numbers favouring the declines, buying Nifty Futures around or above 4680 would be daring in my opinion.

Although I feel the direction of the markets to be down trending in next week, one can never be sure about the stock markets. It is the probability, that we try to figure out, to the best of our ability.

Cheers!
SS

 

[pganesh2k]

Derivatives

hi,

Can you let me know how to get the margin for individual scripts on a daily basis..
Also let em know the changed lot size from july..

regards
ganesh

 

[S S]

Hi!

Ganesh, your query is out of place. Sorry that I would stay away from commenting on it. Please ask it in proper thread.

We all must consider the condition that existed on Friday, 15th May 09, a day before the counting for Loksabha election was held.

On 15th May, Spot Nifty closed slightly above 3670…. and then was the gap up opening on Monday 18th May 09.

The Spot Nifty EOD chart shows the 61.8% level around 3820, and possibly, that could be the target for Nifty as of now. This level of 3820 has earlier acted as a support on 3-4 occasions, and could do so once again.

The daily chart for Nifty has developed a beautiful Cup formation, and it appears that the Handle is getting developed. Therefore, the lower side is more likely to be restricted to 3820, but one cannot be sure and cannot rule out the possibility of 3620. However, 4100 may play a very crucial roll of providing a strong support. One needs to wait to find it out, practically.

If that happens, it means that the Handle formation should be getting completed around the time of the presentation of the Union Budget, early next month.

And going from the chart indication, market is likely to be happy with the Budget and may shoot up.

It would be very interesting to check various possibilities, such as the Adv/Decl numbers, Value of INR-US$, position of Rains in the country, OI for various levels of options for July, etc

And if that all works out, then it may mean that we are once again poised to start buying on dips for every dip, atleast for a short term.

For the next week, I see two possibilities :

1. The downward trend continues and once again, within a week, we touch/cross 4100 or even hit 3820 for the spot Nifty….. not a good idea, though. But if the Rains still remain missing, that’s what is more likely to happen.

2. Next week candle could turn out to be a near Doji, with the open and close for the week being very near to each other. But this shall have a lot of volatility, as both the wicks of the candle could be long on either side… possibility, but NOT a necessity. And in such case, the downward journey of Nifty may get resumed in the subsequent week, till 4100 is crossed/3820 is touched.

But that is my opinion, and I could be wrong
Cheers!
SS

 

[S S]

Hi!

Till around 1 pm on Friday that I was relaxed. Spot Nifty was still making a Doji on the weekly chart as at that time. There was no visible effect of the surge in Dow Jones on previous day.

Then suddenly something happened. All the doors of cages for Lions and Tigers were opened and they all started a chase behind Nifty, and Nifty ran like hell.

Why? I do NOT know. Definitely NOT due to the heavy rains that poured down in Mumbai.

But a re-look at the daily EOD for Spot Nifty tells few more things.

1. Throughout the week, the Nifty was sideways till Friday afternoon.
2. The chart shows that from the high of around 4693 on 12th June to the low of around 4143 on 23rd June, upward retracement has commenced.
3. If this retracement is only 61.8% to around 4485, then a kind of H&S formation may occur to take the Nifty down thereafter.
4. But the high of 4693 on 12th June is the brim of the cup, and once the handle gets completed, the trend should be upwards.

Therefore, everything gets concentrated on one simple issue. Where the hell this handle going to get completed?

The two possibilities that I see are :

1. The retracement mentioned in (3) above shall NOT halt at 61.8% but may continue to rise and cross the 4693 level to go to a new recent high.
2. The retracement is 61.8% or less, confirming H&S and the markets fall, with Nifty having the targets of 3995-3800, and only then the handle gets completed and the upward rise starts.

How can one know which one is more likely? One needs to watch this week’s behaviour for Nifty and markets, with Adv-Decl numbers playing a crucial roll.

With the Union Annual Budget round the corner, that usually lot many things leak out. This may be due to the ministers, politicians and the bureaucrats taking actions prior to the budget day, based on their ‘inside info’

So the markets move one way or the other. Somehow I find that this year, more people appear to be expecting a Very Good Budget, although the elections have already taken place. But market usually defies the larger expectations.

Whatever action one wishes to take has to be based on the market trend and NOT on tips, because such action may prove to be dangerous. The Volatility may remain very high that is the chance for making a lot of profit for some and a lot of loss for many.

But that is my opinion, and I could be wrong
Cheers!
SS

 

[MurAtt]

On the Hourly, 2 Hr and 4 Hr, we have formed an I-HnS which has already broken out of NL and tgt is 4500
(of course anything can happen inbetween ...)

What would you suggest ....

 

[S S]

Hi!

Cup & Handle is usually followed by an upward break-out....that means, the break-out above the brim of the Cup. In this case, it stands around 4693. So, I would rather be interested in trying to figure out, whether the Spot Nifty shall have sufficient steam to reach 4693 and go above it?

You specify a target of 4500, which means I am talking of a longer time span than what you have in mind. But in either case, one needs to wait till the Handle formation is complete.

The Technical Target shall then be above 6500 for Spot Nifty.

Cheers!
SS

 

[S S]

Sorry. Missed one point.

On Friday, the maximum traded Nifty option was 4500 CE but the OI appears to have been reduced. This could be taken as an indication for a probable rise beyond 4500 for Spot Nifty.... just a probability. Action should always be based on the actual trend during the trading session.

SS