Charts for the Day

[mksreeram]

Dear Sreeram,

This is very general analysis, and i dont have tested it. But what it appear from your strategy, you are shorting only if MACD crossed down, RSI turning down and price close below 20EMA. Here what is your TGT, a nominal one..since your Stoploss is almost 65 points up. So your TGT should be greater than stoploss. And yes timeframe. If your trade initiated on short side, and if market remains in the range what is your plan going to be.

Please state your strategy, look how this indicators fared on past signals. And likely TGT.

Thanks Anil for your comment. Can you please guide me how to compute the target price. I went through various source and everywhere I was told that in risk/reward ratio target price should be more than SL. I was not able to understand how to identify target price.

Second question. I was told everywhere to look at ADX. ADX is still trend bound but on a daily chart I am seeing reverse, which is fine. My question is how do I identify such true/false reversal.

thanks in advance for your clarification.

 

[ritesh.bafna88]

Thanks Anil for your comment. Can you please guide me how to compute the target price. I went through various source and everywhere I was told that in risk/reward ratio target price should be more than SL. I was not able to understand how to identify target price.

Second question. I was told everywhere to look at ADX. ADX is still trend bound but on a daily chart I am seeing reverse, which is fine. My question is how do I identify such true/false reversal.

thanks in advance for your clarification.

i would like to know abt these questions too.... anyone??

 

[anil_s_trivedi]

Thanks Anil for your comment. Can you please guide me how to compute the target price. I went through various source and everywhere I was told that in risk/reward ratio target price should be more than SL. I was not able to understand how to identify target price.

Second question. I was told everywhere to look at ADX. ADX is still trend bound but on a daily chart I am seeing reverse, which is fine. My question is how do I identify such true/false reversal.

thanks in advance for your clarification.

Dear sreeram,

Target price is nothing but a previous demand-supply mismatch point. I mean study price action, and see from where demand-supply mismatch occured..If prices in a congestion zone, demand is meeting supply, so no point of leading by one force. When starts trending up, demand leads the way up, similarly on downtrend supply dominates. So starting point of domination by these forces is where we call it a breakout/breakdown point.

Second way to arrive at TGT point is trendline resistance, and key moving average or a simple fibonacci projection.

Regarding reading ADX, Rising ADX is new strength coming and by which force you need to refer +DMI or -DMI leading...similarly falling ADX is nothing but a consolidation/correction of previous trend, it doesnt necessarily mean a reversal. Its just a cooling off, and with ADX falling the signals by DMI crossing should be avoided...Read everything in connection to price..if DMI starts diverging it means volatility rising and new strength trying to develop, if ADX to rise its a confirmation, and price should be break out of consolidation zone to make it a final one...

Your primary focus should be on price, if you dont understand it..it will be useless to refer indicators...

 

[rajasree1]

Anil Sir,
can we get DLF at 193 lvl ?I think stochastic(15,3,3) divergence will appear . Is it correct? Is it a buy at this lvl (200) or will wait ?

 

[anil_s_trivedi]

Dear Rajasree,

Please dont call me sir...call me anil only..will do..

From weekly charts, it broken downtrendline and retesting going on, so need to watch closer this week. If sustained a rise is due. Also we are closer to rising trendline from june 2012 lows. 50 weekly SMA is turning flat. So a rise got controlled here.

Shifting to daily charts, as it seems prices reteraced close to 80% from lows of august and almost 61.8% nearby from lows of june 2012. So its a good support zone of 198-201 zone. 34 SMA is still rising, so the trend is still UP as of now. Prices now consolidating at 200 SMA.

Inference is a likely closing below 201 once, and then probably a rise will take place, to have a positive divergence developed. And regarding 191 yes, closing below its not good and i would love to hold that level.

 

[prst]

Dear sreeram,

Target price is nothing but a previous demand-supply mismatch point. I mean study price action, and see from where demand-supply mismatch occured..If prices in a congestion zone, demand is meeting supply, so no point of leading by one force. When starts trending up, demand leads the way up, similarly on downtrend supply dominates. So starting point of domination by these forces is where we call it a breakout/breakdown point.

Second way to arrive at TGT point is trendline resistance, and key moving average or a simple fibonacci projection.

Regarding reading ADX, Rising ADX is new strength coming and by which force you need to refer +DMI or -DMI leading...similarly falling ADX is nothing but a consolidation/correction of previous trend, it doesnt necessarily mean a reversal. Its just a cooling off, and with ADX falling the signals by DMI crossing should be avoided...Read everything in connection to price..if DMI starts diverging it means volatility rising and new strength trying to develop, if ADX to rise its a confirmation, and price should be break out of consolidation zone to make it a final one...

Your primary focus should be on price, if you dont understand it..it will be useless to refer indicators...

rightly said sir.
regarding adx, there is an extensive book on adx and its strategies, written by Mr. Charles Schaap. Interested ppl can have a look at it.

 

[mksreeram]

Dear sreeram,

Target price is nothing but a previous demand-supply mismatch point. I mean study price action, and see from where demand-supply mismatch occured..If prices in a congestion zone, demand is meeting supply, so no point of leading by one force. When starts trending up, demand leads the way up, similarly on downtrend supply dominates. So starting point of domination by these forces is where we call it a breakout/breakdown point.

Second way to arrive at TGT point is trendline resistance, and key moving average or a simple fibonacci projection.

Regarding reading ADX, Rising ADX is new strength coming and by which force you need to refer +DMI or -DMI leading...similarly falling ADX is nothing but a consolidation/correction of previous trend, it doesnt necessarily mean a reversal. Its just a cooling off, and with ADX falling the signals by DMI crossing should be avoided...Read everything in connection to price..if DMI starts diverging it means volatility rising and new strength trying to develop, if ADX to rise its a confirmation, and price should be break out of consolidation zone to make it a final one...

Your primary focus should be on price, if you dont understand it..it will be useless to refer indicators...

Anil,

Thanks for your reply. Regarding price target. I tried drawing trend line and have drawn two. Can you please comment whether what I have drawn is correct. Attaching picture.

Trend Line 1 support - 5585
Trend Line 2 support - 5550
also Fibonacci Retracement 50% is at 5585. Shall I choose this as target?

 

[anil_s_trivedi]

Anil,

Thanks for your reply. Regarding price target. I tried drawing trend line and have drawn two. Can you please comment whether what I have drawn is correct. Attaching picture.

Dear sreeram,

possible trendlines as per me are...and see the convergence zone of all, highlighted in the chart, it has more significance...
Hope i am clear now...

 

[mksreeram]

Dear sreeram,

possible trendlines as per me are...and see the convergence zone of all, highlighted in the chart, it has more significance...
Hope i am clear now...

Yeah Anil. It is clear. Thanks a lot for your help. Hope I didn't bother you much.

Thanks
Sreeram

 

[anil_s_trivedi]

Dear sreeram,
In above chart, many institutions given buy report on L&T, as an astute technical follower will you sit on train now, when it is already over extended. So question is, why did the buy reports generated on it. So technicals here pointing out risk/reward not favourable here...I agree in daily it is making higher high-higher low, so its in a uptrend, but this uptrend lacking strength...also its a time to look into probably booking some profit, if already long, as it is closer to weekly uptrend channel resistance...

Point is watch ADX move in the chart for two corrective/consolidation scenarios, where in first its a time correction more, so my observation is, specially for elliott wave followers, while framing traingles, ADX generally fall or remain below 15 level, as a crocodile under water,waiting for its turn to open mouth...