Trade With SMAs

I am starting this thread to find trading opportunities in Nifty and Bank Nifty using simple moving averages. I shall be using 3 moving averages to define trend.

Long-term trend to be defined by 100 SMA. If it's sloping down , trend is down.If it's sloping up trend is up.

Medium-term trend to be defined by 50 SMA. If it's sloping up, medium term trend is up. If it's sloping down , medium term trend is down.

Short-term trend to be defined by 5 SMA. If it's sloping up , trend is up. If its sloping down , trend is down.

If 50 SMA is sloping up and 5 SMA is sloping down , we take it as a correction in an uptrend. If 50 SMA is sloping down and 5 sma is sloping up , we take it as a correction in downtrend.

Idea is to enter in corrections in a prevailing trend . As i post charts , things will become more clear .

It's just an attempt to keep things simple. Simplicity rules.

NIFTY Daily



Long-term Trend : Down
Medium-term Trend : Down
Short-term Trend : Up

RSI is at about overbought levels . So, looks like a correction in a downtrend.
Once the short-term trend turns down , time to join the party down. A break below 7424 will imply short-term downtrend in progress.

Bank Nifty Daily



LTT : Down
MTT: Down
STT :Up -Flat

Oscillator near overbought level. A break below 14989 will imply STT down to resume.

WaveSurfer,

One problem you will note with MA is that a gap open can turn a downward slope MA to upward slope MA - especially in the short term. As a result the historical charts will look perfect.... but in realtime, not so, more so in the short term MA..... This is my experience with MA - though they can be used to gauge the LT direction. My 2C.

The idea is to look at end of day charts at the end of day . What the reading shows today holds good till next day's close.

I would like others to contribute their ideas for entry and exits. It's just an idea we are sharing. Let the creative ideas flow.

Let the bull/bear spreads, butterflies and straddles to flow freely . :clap:

Since i am not much into option strategies , would love the options experts to visit here and put something creative.

HDFC Bank Daily



LTT : Down
MTT : Down
STT : UP

Here , i have spruced it up with my EW labellings . So, what it says is it should not go above 1067 and continue down to make lower lows.

RSI is showing reverse divergence that means downtrend to continue. A break below 1010 implies STT down in progress.