New Trend....???

karthikmarar · #1 17th October 2005, 03:23 AM

Dear Friends

Directional system (ADX, DI+, DI-) is a good system to tell when new Trend is about to form. Also they provide good trading opportunities and risk are low when the trends are young. So how to we use this system to predict new forming trend. Let us see what Alexander Elder has to say about this
Quote
“The single best signal of the Directional System comes after ADX falls below both the directional lines. The longer it stays, the stronger the base for the next move. When ADX rallies from below both the Directional lines, it shows that the market is waking up from a lull. When ADX rises by four steps from its lowest point below both Directional lines it “Rings a Bell” on a new trend. If the DI+ is on top the trend will be up and DI- is on top the trend will be down.”
Unquote

Now while we wait and watch how big the current correction is going to be, let us have look at our market for possible new trends. The ADX is has reached the lowest point for the following stocks.

ARVIND MILLS

The ADX values has been languish between 15 to 12 for a long time. The stock was moving sideways from May. The DI+ and DI- were crisscrossing each other showing a keen fight between the bulls and bears. Now they have started diverging with DI- on top. The ADX has also started moving up. The RSI and MACD are giving bearish indications. All these indicate that we are in an intermediate downtrend for this stock. This has already broken its support at 128.

COLGATE

The ADX has been at its lowest level for quite some time. The DI+ and DI- show a keen fight between the Bulls and Bears. This one seems ready for a good big move. Which way? It will be worth watching.

NUCLEUS & PAPER PRODUCTS

Looks like these are ready to start a downward trend. The ADX has started an upward movement. Now DI- is on top and DI+ is gone below ADX. The MACD and RSI are giving bearish signals.

Other stocks who’s ADX are having low values and worth watch are

BHUSAN STEEL
GLAXO
GOETZEIND
RAINCALCIN
RANEBRAKE
TEXMACOLTD
TRENT

I will keep you update on the above stocks. It will also interesting to see how Elder’s theory works. I welcome all your views on this.

Regards

Karthik

karthikmarar · #2 17th October 2005, 08:46 AM

Oops... forgot to enclose charts....here are the charts of Arvind and Colgate for ready reference

karthik

naga2054 · #3 17th October 2005, 09:49 AM

Great work karthik.. shall come back with queries of ADX soon..

Just to support your work.. hindu has come up with a sell on Arvind on Sunday. falling below 125, it advices readers to short the scrip in futures for 90-95 zone.

So lets watch..
Nagzu

dpkshny · #4 17th October 2005, 12:00 PM

Thanks Karthik

I have been tracking Arvind Mills closely. Waiting for it to come down in 115 - 120 range...

Thanks again

Deepak JS

siju070 · #5 17th October 2005, 12:28 PM

Is it good to buy Arvind Mills at current price or shud wait for further fall?

Pls advise

usha · #6 17th October 2005, 01:57 PM

Quote:

Originally Posted by siju070

Is it good to buy Arvind Mills at current price or shud wait for further fall?

Pls advise

Hi,
I donot think so from karthink's analysis ,it is not a good buy. I think the analysis clearly says to either short the stock or to stay away from it. And it is also not saying any price to enter. Have I understood correctly karthik?

usha

srisara · #7 17th October 2005, 03:42 PM

Hi Karthik,

I basically trust MACD and DI put together. As said, again its an individual call how to extrapolate the things.

But whenever I combined DI and MACD, it has given fabulous results (study purpose only).

Satya

Saint · #8 17th October 2005, 03:46 PM

Quote:

Originally Posted by karthikmarar

Dear Friends

Directional system (ADX, DI+, DI-) is a good system to tell when new Trend is about to form. Also they provide good trading opportunities and risk are low when the trends are young. So how to we use this system to predict new forming trend. Let us see what Alexander Elder has to say about this
Quote
“The single best signal of the Directional System comes after ADX falls below both the directional lines. The longer it stays, the stronger the base for the next move. When ADX rallies from below both the Directional lines, it shows that the market is waking up from a lull. When ADX rises by four steps from its lowest point below both Directional lines it “Rings a Bell” on a new trend. If the DI+ is on top the trend will be up and DI- is on top the trend will be down.”
Unquote

Now while we wait and watch how big the current correction is going to be, let us have look at our market for possible new trends. The ADX is has reached the lowest point for the following stocks.

ARVIND MILLS

The ADX values has been languish between 15 to 12 for a long time. The stock was moving sideways from May. The DI+ and DI- were crisscrossing each other showing a keen fight between the bulls and bears. Now they have started diverging with DI- on top. The ADX has also started moving up. The RSI and MACD are giving bearish indications. All these indicate that we are in an intermediate downtrend for this stock. This has already broken its support at 128.

COLGATE

The ADX has been at its lowest level for quite some time. The DI+ and DI- show a keen fight between the Bulls and Bears. This one seems ready for a good big move. Which way? It will be worth watching.

NUCLEUS & PAPER PRODUCTS

Looks like these are ready to start a downward trend. The ADX has started an upward movement. Now DI- is on top and DI+ is gone below ADX. The MACD and RSI are giving bearish signals.

Other stocks who’s ADX are having low values and worth watch are

BHUSAN STEEL
GLAXO
GOETZEIND
RAINCALCIN
RANEBRAKE
TEXMACOLTD
TRENT

I will keep you update on the above stocks. It will also interesting to see how Elder’s theory works. I welcome all your views on this.

Regards

Karthik

Great stuff as always,Karthik..............keep em coming!!

Saint

karthikmarar · #9 17th October 2005, 11:36 PM

Quote:

Originally Posted by usha

Hi,
I donot think so from karthink's analysis ,it is not a good buy. I think the analysis clearly says to either short the stock or to stay away from it. And it is also not saying any price to enter. Have I understood correctly karthik?

usha

Yes Usha, You have understood correctly. Todays downward movement seems to confirm the downtrend. It broke another long term support today. The DI- is moving up sharply and the ADX also moved up 4 points form lower level. Seems to a classic case for Elder.

We should wait for some clear signal before thinking of re-entry.

regards

karthik

karthikmarar · #10 17th October 2005, 11:39 PM

Quote:

Originally Posted by naga2054

Great work karthik.. shall come back with queries of ADX soon..

Just to support your work.. hindu has come up with a sell on Arvind on Sunday. falling below 125, it advices readers to short the scrip in futures for 90-95 zone.

So lets watch..
Nagzu

Nagzu

Thanks. Please do post your queries regarding ADX. It will be good to discuss and we can all learn together.

regards

karthik

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