Nifty Recap For The Day!!!

As I had mentioned earlier on the RIL post, that today was just the day which was long and frustrating. Below is the hourly chart of Nifty(please do scroll down and see the hourly I had posted on my weekend views post), we can see after the opening surge we just tried to surpass the 50 periods MA and spent most of the day there before giving up. This has once again led to a small reverse divergence on the charts. It’s like this, we all know that Momentum precedes price, in this case we have seen Momentum going higher and price failing to follow the Momentum. We have stalled exactly at the shaded area shown in my weekend post; this also was the 38.2% fib retracement from the recent lows. Now the price is nestled between the 20 and the 50 period MA, where as the 200 periods at 2825 and the 2850 above are the real challenges if one has to have any serious bullish fantasies. As for the supports if the 2715 doesn’t hold well then this time we are once again going to test the 2650 or perhaps lower.

So far we have held well vis a vis Dow, I wouldn’t worry much for DOW, as this is now testing and confirming the bottom going on. We are going to get the positive Momentum divergence on the weekly chart and hopefully things will become clearer then.

"Success usually comes to those who are too busy to be looking for it." Henry David Thoreau

My Ril Trade....A Lesson In Patience!!!

Today was one of those days where it was better off doing any other chores than trading. It was just not the day, with Nifty barely moving, things were static, Ril was no exception either. I decided to do a quick scalp trade by shorting the Ril Fut. Below is the first chart I put up when I initiated the trade. I was wrong here for many reasons; I tried to preempt the move, I didn’t wait for some more confirmation, in short I thought I was SMART.

Now look at the second chart at the end of the session, I did achieve the target what I had in mind. But to wait for these 15 points for the whole day was just not worth it. Anyway I got out at breakeven earlier in the day. The reason was simple; I had a Scalp trade in mind and it just didn’t move immediately as planned, so I guess I considered it as a Time Stop thingy and got out. Though it never breached the Stop I had, but the wait was frustrating. Infact I have annotated the second chart as to where I ought to have shorted to have the desired result; time wise and target wise. Any way no damages done just a lesson learnt learn to control the URGE!!!

NH-NL Index and Nifty!!!

Divergence At Play! A Satisfying Trade!!!

This is the chart of Nifty futures I had sent to a couple of friends when I decided to enter a long trade in the morning. It’s self-explanatory, so not adding anything more to it.

And this is when the day ended, as you can see, with a little patience you can get very good low risk opportunities.

"Ability is what you're capable of doing. Motivation determines what you do. Attitude determines how well you do it." Lou Holtz

Weekend Views On Nifty!!!

Na… I aint in a mood to do a Nifty this week, its not only getting to be frustrating but more importantly its even getting confusing. The coil is getting tighter; the wait for breakout in either direction is getting painful. No wonder they say PATIENCE is a virtue one should have aplenty when trading. Nothing fancy in today’s post just posting a daily chart below, it also has an inset of line chart. The idea is to show how the range is getting smaller day by day and how difficult it is getting to take a clear call.

The hourly below as usual makes a things wee bit easier, the two bands in red at 2780 and 2850 are pieces de resistance! All the MA’s are lined up in perfect bearish order, the 20 (green), the 50 (blue) and the 200 (red). A small positive divergence is in the making due to the oversold nature which is likely to result in some kind of a pullback. Maybe shorts would like to take off some money here off the table and look at higher grounds to short further?

Like I had said earlier, it’s getting really difficult to trade Nifty, and it’s better to concentrate on individual stocks which are generating some good swings. Maruti, GMR and Aventis Pharma are a few stocks which are showing good relative strength vis a vis Nifty.

"The difference between the impossible and the possible lies in a person's determination."

Tommy Lasorda

Ril Views!!!

Reliance is one of the heavy weights in Nifty, known as the KING among the traders, below is a weekly chart of it. As you can see that it’s in a coil, it’s just managed to kiss its 20 periods EMA and reiterated from there. The weekly impulse is red, not permitting us to buy (its either short or stand aside), if long is your play, wait for it too turn blue. Another thing worth noting is that 1450 and 1500 is a strong band of resistance on the weekly chart. I have shaded the area red, as you can see we have a fib cluster there, we have the 200 period EMA, almost horizontal there and of course the 20 and 200 periods cross also lays there. All this makes it one helluva resistance, if this gets broken on the upside….you just imagine what will happen!!! But we will come to that when get there, as of now lets just respect it and fear it. 1150/80 remains a good support.

The daily chart below shows that, we have managed to close below both the 20 and 50 periods daily EMA’s. We’ve had one false breakout, and now all things long should be looked into on taking out 1280/1315 band convincingly. 1280 I feel has been a very relevant pivot in the past, need to see how we behave there. The daily also supports our earlier views about 1150 odd levels.

The action is better witnessed on the hourly chart shown below, as we can see we are a bit oversold and a pullback is in the order. It’s sitting right on the trendline support. The 1280 I mentioned earlier is also seen here in the shape of the flat 200 periods EMA (in red) and the 20 is also there! The LL and LH formation is on; it gets reversed only when we take out 1315!

"Success is the small sum of efforts, repeated day in and day out." Robert Collier

Dow Views!!!

What you see above is the weekly chart of the Dow, heading towards the 2002 lows or perhaps lower…good, infact very good! This I feel will finally be a bottoming out process, but that’s not what I am looking at, I am looking for a divergence on the weekly chart to finally happen, making a case to go long. Anyways as things stand they are pretty oversold and perhaps a short covering rally (a lil bouncy) is in the order.

The chart below is the daily, once again I have highlighted a favorite setup of mine; the Divergence. In this case the red arrows marked, are an example of reverse divergence or as some prefer to call it hidden bearish divergence. I wouldn’t say it’s prudent to short here coz we are already way below the value zone (stretched below the MA’s), infact its time to cover your shorts or at least be agile with your stops to protect those profits. In Short (pun!!!) there is no place for baby bears right now!

Like I mentioned in one of my earlier posts that a friend of mine commented about the divergence between the Baltic Dry Index (chart courtesy Investment tools) and the SNP, I thought I might as well put up the chart here. What the heck with this divergence and hoping to get a positive divergence on the weeklies, who know we just might have ourselves a nice rally!!! Wishful thinking??? Yeah it is…didn’t I tell you once, that hope lays eternal in a Bull’s heart!

"I can accept failure, but I can't accept not trying." Michael Jordan