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

[S S]

Hi!

So… the Spot Nifty surged ahead with full steam. The current chart for Spot Nifty as at close of markets on Fri 13th Jan 2017, is very interesting. See the 10 DMA Red line and the position of candles from session to session.

During most of Dec 2016 that the daily candles were below this 10 DMA Red line. Around the lower black dotted line that the candles first made an attempt to get into the channel formed by the two lack dotted lines, and simultaneously crossed the 10 DMA Red line to go above it. By last Friday, that is, by 6th Jan 2017, the candle had reached the region of upper black dotted line and also the 100 DMA Blue line which was expected to give some kind of resistance for the spot Nifty.

Monday 9th Jan 2017, as anticipated had a downward moving Nifty. But thereafter, during the next three sessions that the spot Nifty moved upward convincingly, which I had not expected. I had anticipated the spot Nifty to remain sideways for some time, which did not happen.

For the current situation, there are few important points to be noted.

1. While the upper Bollinger bank is around 8478, the lower Bollinger band is around 7929, which has a gap of almost about 550 points. This was almost only around 200 points during the mid Dec 2016.
2. The candle for the spot Nifty for Fri 13th Jan 2017 almost appears to be engulfing the previous candle of Thu 12th Jan 2017, which is a bearish indication.
3. The High for the candles for the spot Nifty on Fri 13th Jan 2017 is around 8461 which is very near the upper Bollinger band level of around 8478, creating a kid of resistance gap.

Therefore, I strongly feel that the markets for Mon 16th Jan 2017 and thereafter, shall now remain mostly sideways and with less volatility. During this time, the Nifty and also various stocks shall get consolidated. The action during this period is more likely to be stock specific.

My opinion based on my knowledge of the markets and the charts, and I could be wrong.

@MurAtt

On Fri 23rd Dec 2016, the Nifty had closed around 7986, when you had raised a question about buying SIP.

If anyone would have bought even one lot of 8400 Call option for Nifty for Jan 2017 on the next session, till yesterday, the difference of 475 points in Nifty (ignoring the premium) would itself had made him earn (475*75), which is more than NET Rs 35,000/=.

Next week, if the markets remain sideways as anticipated, it shall be a great idea to buy only one lot of Nifty 8400 call for Feb 2017 when markets come down. Lots could be added on dips thereafter. Budget is expected to be good and is expected to give good earnings. But…

Be cautious on the Budget day itself. Markets may either fall drastically and then rise to reach the skies, or vice-versa. Remain alert to book the profits at appropriate times. Risk-Reward ratio shall work out far better than selling Puts or buying Futures for Nifty.

Cheers!
SS

 

[S S]

Hi!

Last week, till Thu 19th Jan 2017, the spot Nifty really stayed sideways, only to have the expected Friday fall on 20th Jan 2017.

From the chart for spot Nifty at the close of session on Fri 20th Jan 2017, one can clearly see that the candle for Friday has crossed over the 10 DMA Red line and has closed below it.

At this point, possibly the gap between the upper Bollinger band and the lower Bollinger band is more important. For this gap to get reduced, the spot Nifty shall have to remain sideways again (and come down to some extent) for the next week, and this time, one could expect the fall on Thu 25th Jan 2017, which is a settlement day.

Once the spot Nifty is somewhere near the lower Bollinger band, that the markets are likely to remain sideways, till the Budget gets declared. I may be wrong, but I expect the difference in the Bollinger band at the close of Pre-Budget session on Tue 31st Jan 29017 to be around 250 points or less, and in the subsequent three days, it may increase by 50% or more, if (and only if) the markets shoot up.

There is an exception though.

This budget is going to be mostly for the lower level of the society, and it may not help the markets immediately after the budget presentation is over. There could be some points which may not be clear to the market players, and it is only after the clearance is received to remove these mis-understandings that the markets shall move up.

As at this point, what is more important for the ruling BJP led govt at the centre is to ensure that all the states which are going to have the state elections immediately after the budget, have the victory for BJP and to form the state govt thereafter. Therefore, the market related goodies may be purposely kept in the fine print, till these elections get over. This may be done to avoid mis-interpretations of those goodies for the market by the opposition parties to mis-lead the lower class citizens of the country. Therefore, I am expecting the closer of spot Nifty around 8600 for next month closing or earlier.

My opinion based on my understanding of markets, charts and the current political situation in the country, and I could be wrong.

Cheers!
SS

 

[S S]

Hi!

Great….! The Nifty hurriedly caught up with 8600 and then also crossed 8650 to reach a recent high of 8672.7 on Fri 27th Jan 2017. In last four trading sessions, the Nifty appeared to be Full Steam ahead, not taking any contingence of the rate at which US $ was trading.

This is too tricky. One could wonder, whether there is some kind of Trap in the offing. I say this because,

1. The spot Nifty has already touched/crossed the Upper Bollinger Band.
2. The RSI is Above 70, indicating that the market is in Overbought state.
3. It is clear that there are no negativities related to demonetisaion.
4. The Budget on Wed 1st Feb 2017.

Market appears to have already factored in some points for the Budget, like, the rates and slabs for Personal Income Tax are going to be extremely favourable to the common man, and there shall be a lot of Thrust in development of Infrastructure, especially in the Rural area.

The government appears to have collected good amount of taxes, and the amounts found in raids, which were confiscated, further increase the kitty.

But the Useless Paid Media in the country makes everything appear differently.

Like for example, when Mr Modi promised “Achhe Din”, the idiotic media mis-understood that to happen overnight. The media kept on harping on that issue for such a long time, that common man also started believing the media.

Likewise, the media has now started assuring the viewers about the likely goodies that shall be made available to all “BECAUSE THE BUDGET SHALL BE FOLLOWED BE STATE ELECTIONS IN FIVE STATES”

This raises expectations for all. That is what the Indian Paid Media wants. So, when the Budget is out, the paid media can join the opposition parties in fault finding for the budget, and continue blaming the current “Non-Secular (?)” government.

Every time I have heard Mr Modi, he has always said “Sab Ka Saath, Sab Ka Vikas”, treating people of all religions and casts equal. Top Leaders of all other Secular(?) Political parties cannot talk without bringing either the religion or the cast.

Why Am I writing all this….? Just a Caution.

No matter how good is the budget for everyone, and even if the markets do shoot up temporarily, there is likely to be a massive fall thereafter.

Like the Demonetisation was mis-represented and the actual results are totally different than what the media projected all along through chats and debates, the Budget shall also get mis-represented.

So… Take Care. Do NOT get caught is some kind of Trap. It is ok, if you earn less, so long as you ensure that you do NOT loose.

My opinion and I could be wrong.

Good Luck. Cheers!
SS

 

[S S]

Hi!

It appears that the market has liked the budget beyond any doubts, especially because the fear related to removal of LTCG and increase in STT were proved to be totally baseless. It was expected that after zooming up on the budget day, the market may take a breather, but NO. It continued to trade in a limited territory, but without coming down.

Currently, the most active Calls are at 9000 and Puts at 8500, and the closing of spot Nifty for Fri 3rd Feb exactly in the middle zone. Last three candles give a Bullish signal, but I do not take them on face value because earlier, the candle stick theory has proved to have an exception.

Therefore, even if the candlestick signals show a Bullish outlook for the Nifty, I believe that there could be some correction due to Profit Booking. Therefore, while trading during the forthcoming week, one needs to be careful for a sudden fall on some day, due to profit booking, especially because the RSI is already showing the Nifty to be in the overbought zone.

I am sure that the day traders must have booked quite some loss in last two trading sessions, when there were no clear cut signals visible, and yet some people possibly were tempted to jump in to trade and get their asses burnt.

If one looks back, in my message posted on 24th Dec 2016 (not so much long ago), when the spot Nifty was BELOW 8000, and I had suggested that it could be a good idea to buy Nifty Futures for Feb 2017, possibly it might have appeared to be a ridiculous idea, to some. With Feb Futures for Nifty having already crossed 8700 on Intraday basis, it would have given 700 points raise, and for one lot of 75 points for the Nifty, that would have been over Rs 5 Lakhs.

Cheers!
SS

 

[TraderRavi]

you mean 10 lots ?
700 x 75 = 52,500

 

[travi]

you mean 10 lots ?
700 x 75 = 52,500

O bhai, where did you read 10 lots ?

 

[msa5678]

O bhai, where did you read 10 lots ?

since SS mentioned over 5 lakh profit. traderravi bhai is asking whether he meant 10 lots

Sent from my SM-G610F using Tapatalk

 

[S S]

Hi!
Candles for last 5 sessions show, that it is a tight range, in which the spot Nifty has been active. While the last four sessions have Red candles, thereby indicating that, although the markets tried to go to higher levels, they did NOT sustain those levels, and fell to some extent.

In addition, the last two candles have their high levels around 8822, almost creating a double top.

Therefore, it shall be interesting to see the Open and High levels for spot Nifty for Mon 13th Feb 2017. For confirmation of the bullish trend, it is essential that both these levels are above 8822.

The chart also shows that on 3 occasions, this level of around 8822 has acted as a resistance during Oct 2016, forcing the markets to fall.

One should now keep a watch on the 10 DEMA Red line. If it does NOT take a downward turn, fine. But if it turns downwards, then a correction to around 8670 may take place.

My opinion and I could be wrong.
Cheers!
SS
NB : My mistake in my last posting. It was 0.5 lakhs, erroneously written as 5 lakhs.

 

[S S]

Hi!

In my last message, I had written that for the spot Nifty, the level around 8822 was a strong resistance, and to continue with the uptrend, it is required for the spot Nifty to open above 8822.

However, on last Monday, on 13th Feb 2017, the spot Nifty opened below 8820, managed to cross 8822 level to touch/cross 8826, and then fell downwards. Thereafter, till Thursday 16th Feb 2017, the spot Nifty could neither touch this level of 8822, nor it could cross it.

There is some problem in uploading the chart, so I am posting this message without any chart.

On Fri 17th Feb 2017, however, the spot Nifty opened above this 8822 level and stayed above it for most of the time, only to close at 8821.7, which is marginally below this level.

Most important part was the gap-up opening on 17th Feb, creating a gap of about 20 points between the high of about 8784 on 16th Feb and low of about 8804 on 17th Feb. This gap shall now act as a major resistance.

The Bank Nifty played a major roll by reaching it’s all time high and also an all time high close. Barring unforeseen circumstances, the Bank Nifty is likely to go upwards, thereby pushing the Nifty also in upwardly direction.

Hence, an immediate target for the spot Nifty is around 8969, which was the high created by the spot Nifty on 7th Sept 2016.

And this surely is neither going to happen overnight, nor in a straight line.

By opinion and I could be wrong.

Cheers!
SS

 

[S S]

Hi
That was fast. The Spot Nifty hurriedly moved to the anticipated level of around 8969 as mentioned in my last message, but within five trading sessions which was, in a way, unexpected.

There are few things, which one could make a note of.

First, the last high of around 8969 on 9th Sep 2016 was touched/crossed again on 23rd Feb 2017, thereby fulfilling the immediate target.

Second, one can see that since the low of around 7893 on 26th Dec 2016, the candles for the daily spot Nifty have all along been above the 10 DMA Red line, and only on 2-3 occasions that they have touched/crossed this line downwards, but have immediately recovered. During this time period, the Nifty, on many occasions, has touched/crossed the Upper Bollinger Band in Indigo colour, but during all those incidences, the Upper Bollinger Band has Failed to act as a resistance, allowing the Nifty to move ahead with full speed.

This is an indication of the steam still balance in the Nifty to move ahead. However, it does NOT mean that every time the Upper Bollinger Band shall do the same, and allow the Nifty to continue moving upwards.

Therefore, while the immediate upward target has been met on Fri 23rd Feb 2017, one needs to be cautious hereafter because, all of a sudden, one day it shall show it’s resistance to make the Nifty turn downwards, and profit booking shall do the rest to bring the markets down again at least for a short period of time.

It shall also be interesting to find, whether the all time high of around 9119 attained on 4th Mar 2015 is touched/crossed again before the completion of two years. If so, that has to happen during next week, which may be difficult, but NOT impossible.

My opinion and I could be wrong.
Cheers!
SS