Observations & Ideas

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Observation Log: 15th May 2014

15 May 2014
Tomorrow is the day! We had lower volumes. 25 points up and close at 7123. Lets see if the circuit breaks tomorrow.

Monthly
Same as last log

Weekly
Same as last log

Daily
3 birds up in the air. The gap would close sooner or later.

Hourly
Sideways channel between 7150 and 7090.

30 Min & 15 Min
The small bullish extensions are becoming smaller in the sideways trend but all technicals to be discounted for tomorrow.

Overall
I hope all of us have hedged appropriately. Many strangles would be in place! All the best for tomorrow. Nothing significant to jot down today.

 

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Observation Log: 16th May 2014

16 May 2014
With the picture turning out to be as expected we did not see any circuit break but rather a nice booking of profits. Volumes were heavy. Nifty peaked at 7563 before 11am on friday, this was the lifetime high. From here on we might see some correction mostly due to closure of positions but the upward trend remains intact.

Monthly
The upward trend is intact, because of the result day there is a long upper shadow. The previous SL is at 5933 and a good support at 6360.

Weekly
A similar candle to the monthly one. 6638 is the last SL in the upward extension. The extension is more bullish than the previous upward legs.

Daily
There is a gap which is not closed from 7020 to 7065. This might just get closed in the near term future. There is bearish pressure and we might see some swift move downwards due to booking of longs. From the curvature bullish pressure is weakening and this might lead to a downward extension in the upper trend. But the overall bullishness is intact.

Hourly
Except the first two hours we saw a downward leg. The range for the day was 432 points! The trend might continue downwards till 7150 levels.

30 Min & 15 Min
The downward extensions in the day show a variation from weak to strong then medium bearish pressure. The support level as per hourly chart will hold.

Overall
The charts show of a downwards extension which is just a swing in an overall upward trend. We might see profit booking in the next couple of sessions. I think its time to be short till we hit support levels and go back long again. Participant positions and options chain need to be studied for further confirmation. All the best for the next week.

 

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Observation Log: 19th May 2014

19 May 2014
Volume fell and the day closed 13 odd points in the red although we nifty touched newer heights. Close at 7263.

Monthly
Same as last log

Weekly
The first day of the week is a red hammer and signals a trend reversal in an uptrend but this is just the first day of the week.

Daily
Uptrend continues but its nervous and red.

Hourly
The first couple of hours was bearish but then there was strengthening bullish pressure.

30 Min & 15 Min
This is an early formation of a 'dumpling top'. If a small window opens up on the downside tomorrow then this will confirm the same. More on dumpling tops, fry pan bottoms and windows in a later post.

Overall
Cautious market. Was not able to track it in the day as had no open positions neither had time due to a very busy schedule.

 

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Observation Log: 20th & 21st May 2014

20 May 2014 & 21 May 2014

20 May appears to be a SH in the last upward leg (ignoring the high volatility of the election result day). A lot of bearish pressure existed today but a good fight put up by the bulls towards the close. Volumes are decreasing and the last four days have been red.

Monthly
A strong green candle in the upward trend

Weekly
A small red candle forming, this could also be a SH in the upward trend

Daily
There is clear exhaustion of bullish pressure. Bearish pressure there is no indication of. But we can trade using the direction of weakness. I think its a good time to be short till 7050 levels. Support might also come in at 7145.

Hourly
We are in a sideways channel still, oscillating between 7200 and 7300.

30 Min & 15 Min
The 15 Min chart shows the duel from 12:00 to 15:00 today. Well I think this timeframe is only used as an entry for me and not a trading timeframe.

Overall
As noted before bullish pressure is seizing. Lets see if the bulls push the market upwards. But at the moment I see the bears taking control sooner or later.

 

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Observation Log: 22, 23 and 26th of May 2014

22, 23 & 26 May 2014
Higher highs in the last 3 days. The uptrend continues and looks solid.

Monthly
Solid green candle indicating an upward move

Weekly
Although today in the last hour we had a lot of profit booking overall the weekly uptrend is intact.

Daily
The slope of uptrend has resumed to the levels it was before 9th to 16th May period. But still there is bound to be flattening of the slope because historically it is not sustainable.

Hourly
Gap up in the last two days within the steady uptrend. The last 4 candles were a beautiful short opportunity. At 13:30 we had a hammer at a top which was preceded by a SH. Then a long red candle.

30 Min & 15 Min
At 14:15 was the time to safely short. Looks like people made a killing today!

Overall
Uptrend is intact and will surely see more movement northwards but there is certainly going to be some intermittent play in the next three days.

p.s. Had a nice call with a hedge fund owner based out of Singapore today. It is based on the 'funds of funds' concept. Some important points of note if one wants to make into the industry
1. Entry for a novice is possible only on the sell side analyst or a sales trader
2. This hedge fund is fundamental based and the Graham Dodd principles rule the trades
3. Two most important things are a) Networking b) Knowing how to make money. Nothing else matters whether you are a top shot MBA in Finance or a PhD
4. There are more technical traders than fundamentalists in the industry
5. Price Action Traders and Pattern Based Traders make the most money but lack consistency and can have dry periods. Nobody is a pure fundamental trader though and algo trading is not the next biggest thing.
6. Book recommended was Security Analysis by Graham & Dodd