Nifty Auto Chart!

Nifty Views

NF Chart Views !!!!

The Daily Drama;

As you can see from the chart below the NF traded in a tight range as there was no clear clues from the East as well as the West but what it did BEST was to hold its ground !!!. In the intermediate uptrend which appears to hold water so far the NF tried and tested the resistance provided by the confluence of 20/200 EMA and still held above the 50 EMA.

The best trend identification ; sequence of  high and higher high accompanied by higher low is still visible on the daily chart and like I said above so far the intermediate uptrend holds water....

Another thing I want to point is that there seems to be a hint of Hidden Divergence (Bullish) on the daily chart as marked on the chart with red dotted lines.

The Hourly Picture;

The hourly shows that the GAP that NF filled was the reason it was subdued. Price action does test and retest gap areas. Plus here also you will see that small redline was the 200 EMA on the hourly charts.

The 15 Minute Break;

The chart below lucidly illustrates the concept of old supports turn to resistances.

So if one were to see what does one get????

 Well you get the broader view, the hourly will give you support and resi levels to plan your trade and the 15 minute chart would give you the entry !!!

Its a buy between 7780-7800 with an immediate target of 7830 which might stall the move up for sometime and would require a push accompanied by volumes. Above that its NF's play ground or I must say its upto the Bulls to show their Mojo!!!.

Howsoever a break of today low might result in a sudden 50 pointer drop before any buying comes in.

I have always stressed that its not important to trade daily or trade for the sake of trading. Whatever one does he or she shall make sure as soon as you place your trade, the next second one should place the STOP !!!!

Nifty Future Hourly Chart....Hidden Negative Divergence???

DLF...An Example Of Hidden Negative Divergence!!!

This is purely an academic post of a setup that’s already been spent! I am a person who likes to trade divergences now and then; shuffling through my charts I came across DLF, which made a beautiful Hidden Negative Divergence. Look at the shaded area and you will see while the price made a lower high, all the three indicators made a higher high, the price also confirmed by failing to hold on the MA breakout and reversed.

Having discussed what’s already happened let’s see if we have any trade in DLF, if you compress your charts to show two years of data you will see that DLF is at important demand area which has held out quite a few number of times. Also with the MACD showing some positive divergence and the indicators making small double bottoms, a very low risk buying opportunity is to buy now (250/55) with a stop near 240/245 or a better trade is to play safe and buy if it breaks above 258/60 for a target of 290/300!!!

Hidden Negative Divergence????

Divergence!

Just a few days back I had written about divergence. Well it’s a favorite trade set up of mine so thought would make another post out that with illustrations. Two reasons for doing this, one, this is my blog, two, I wanted it in my blog for future reference. As Pring states when the momentum and price are moving in tandem, there isn’t much to read other than assuming we have a healthy trend. It is when the momentum and price get out of sync we have Divergence in hand.

There are 2 basic types of Divergence.

REGULAR DIVERGENCE

1-Price is making higher highs while the indicator is not: Bearish

2-Price is making lower lows while the indicator is not: Bullish

HIDDEN/REVERSE DIVERGENCE

3-Indicator is making higher highs while price is not: Bearish

4-Indicator is making lower lows while the price is not: Bullish

Divergences test your patience, you have to let them develop and then get ready to put in your trade. One of the mistakes us novices make is we jump the gun too soon when we spot Divergence. It should be remembered (I might as well put this in bold font to drive home the point), Divergences in themselves do not signify a reversal or a trend change, they merely gives us an advanced warning of the underlying strength or weakness in the prevalent trend. The real confirmation comes from the Price action itself.

There is a lot one needs to understand about Divergence, than these simple interpretations. The significance of Divergence, the Divergence Trap and Complex Divergence (will add these later). I reiterate again that one should read Pring’s book on Momentum to get better hang of things. Divergences if traded right, can give phenomenal trades, but then you need to spot them, and wait patiently to let them develop, and finally pull the trigger when the PRICE gives the signal!

"Whether you think you can or think you can't, you're right." Henry Ford