Nifty Trend Multi time frame :

Please read the following post on the usage of Multi time frame at

Nifty Trend Indicator with multi timeframe update  which shows how the higher time frame trend can be used for better trading and trend detection.

Nifty index had a good selloff from last lat Apr onwards.

Have a look at the chart below which shows both the 4 hour and 1 hour trend.

Leverage could be increased on confirmation of the trend in both the timeframes.

Nifty Trend Indicator with multi timeframe update

Nifty Trend indicator with 4 Hour timeframe


There are times when there is no clear trend in the index. This generally happens when the short term and longer time frame trades are not on the same page or the traders and investors are thinking differently about the markets.

The ongoing week is one such period in the market. The above conditions can be detected very easily with a trend indicator and using it on higher timeframe.

For example: The following chart shows the Trend for both 1 Hour and  4 Hour time frames.

The hourly trend shows traders activity while the half day (4 Hour) timeframe shows large investors take on the markets.

Right now the 1 Hour Trend is in Buy mode while the 4 Hour is in still Sell mode.
Perfect recipe for confusion and that's pretty much evident also as the Index is seeing buy form lows while the rallies are being faded out.

Related Post:  Trend indicator with multi time frame

Trend indicator with multi time frame

For quite some time I was working on a trend indicator. The trend is derived from high and lows with stop loss based on ATR. This is quite common and I just combined these two techniques.

Using highs and lows price as trend is reduces lag and the stop loss gets adjusted as per the volatility. The ATR is the one of the best indicator for gauging the volatility.

Now the major change I did was to use multi time frame indicator with base time frame. For example with 1 hour trend I use the 4 hour vales and then look for confirmation. When confirmation then its one side otherwise trade less.

A simple screenshot. The Blue line is 4 Hour indicator while the green and red is of 1 hour.

Trading based on multiple time frames is a good technique and can be quite useful in choppy markets.
The best use is to detect what is larger trend is and then position the trades based on that. The smaller timeframe then gives the entry point.

In the above chart the the profit booking sign came at 5850 and has been in sell mode based on 1 Hour time frame. The 4 Hour time frame indicator is still bullish with stop at 5750.

The strategy for traders would be to go short 50% at 5850 and then book profits at 5750. That is for short time frame traders and for institutional traders would be to go short on break of 5750 levels.

The same kind of strategy can be applied for any indicator. More on this particular indicator later.

Related Post:  Nifty Trend Indicator with multi timeframe update

Indian indices nuclear effect visible

Indian futures came down sharply today on the Japan's nuclear explosion.
There is sure a high cost associated with such event and every nation has to pay and I feel every one should help Japan at their times of test.

Coming to futures I feel Put buying has to be done from here as the downside is high from here.

There is every chance that these events can affect a lot of countries and companies. There could a big effect on the earnings and revenues.
The insurance companies has to pay and they can sell off most of the assets parked and equity is the most liquid among all.

Going by history the Kobe earthquake took the markets down a lot as posted y'day here. And this one is most severe that any on other on earth in recent times.

India although is safe from the financial tremors but in recent future there is still no trigger for it to outperfrom. So Put can bring protection to the portfolio.

Nifty Bank Nifty futures: Stuck in Neutral zone

Nifty and Bank Nifty futures are stuck in neutral zone.
The various indicators are at mean levels like Daily RSI at 50 levels. It has been there for last  weeks.

The intraday timeframe though showed weakness y'day. It needs to be seen if that persists below the crucial support levels of 5400 and 10650 levels.

The trend as of now is

14-Mar    Weekly    Daily    180 min    Hourly
Nifty    Lev Sell    Buy    Sell    Sell
               
Bank Nifty    Sell    Buy    Sell    Sell

Nifty and Magic of 13 SMA

There is something special between Nifty and 13 SMA these days.

The index is seeing a spurt whenever it it touching it. Attached is the graph below.

Today it is at 5452 levels so lets see how Nifty behaves at those levels.

Timeframe Trend Summary today:

11-Mar	Weekly	Daily	180 min	Hourly
Nifty	Lev Sell	Buy	Sell	Neutral
Bank Nifty	Sell	Buy	Sell	Neutral

Nifty Bearish Death cross: Breadth following: Is it time for a rise?

Nifty had cross of 50 SMA and 200 SMA. The last such occurrence was in March 2008.
The cross signifies the bearish momentum which has been in place for last 3 months.

Last time the cross took about 2.5 months from the peak and this time it took roughly 3.5 months from the peak.
The 200 DMA though is still rising which is the only bullish sign as of now.

Just a quick observation: The markets after the bearish cross ends higher for next one month. The previous probability is at 70%.

The Bank Nifty cross came last week which shows the banking sector weakness.

Doing such a analysis on F&O stocks shows that 75% of the stocks have bearish cross as of yesterday.

This is clearly a bearish breadth of the market. More details about this in the State of Market report later.

For futures the 5600 and 11100 are resistance for Nifty and Bank Nifty with support at 5400 and 10700 levels. Looking for more range trading here.
In time like these the ladder options strategy is a good one to adopt.

India Futures: 5600 is the bulls barrier

Nifty is not crossing the 5600 levels. The close below opening levels on Friday indicated that sellers are looking for higher levels for sell.
The fall came near the 200 DMA (exponential.) Now bullishness will come on close at 5600 above levels.

The sell came at today's open below 5500 levels.

The Nifty bollinger bands are flat and Nifty reversing direction on touching the lower and upper band. The upper is at 36.8% retracement adds more to the resistance at those levels.

All this indicates that the market will be in range mode for some time. Can look at options trading for range behavior now.

India futures change in color

Nifty daily color is now Buy after today's open. If the index closes above the 5600 it will be considered bullish sign and the weekly color will change to Sell mode from Lev Sell mode.

The hourly charts have been in buy mode from 5410 levels and Bank Nifty from 10700 levels.

Today we have got the bullish confirmation in Daily charts. Attached are hourly charts.

Technicals before Budget: Range is wide.

Lets see what the Technicals for Nifty and Bank Nifty are before the Budget.

The color on daily chart is Lev Sell for Nifty and Sell for Bank Nifty. Both the indices has not broken the last low at 5175 and 10030 levels.
The candle for Nifty is Bullish Hammer indicating sideways/bullishness if 5230 holds.

The lower bollinger band is not broken for the indices.

The weekly is Lev Sell for both the indices. The weekly RSI though is showing signs of base formation at these levels.

To summarize the markets are in Sell mode but the immediate trend is range of 5430 and 5230. That's the range of 4% in Nifty. This wide range at the lows of 5250 levels shows nervousness of the market.

If the markets rise after Budget then the recent Bottom will be good support for few weeks.

India futures: Break of range trading possible

Indian indices are trading within range for last 4-5 days with narrow range and inside day formation at the middle ground of bulls and bears.
The index has given many whipsaws in trading which is key feature of range trading.

The 120 min bollinger band has been a good indicator to trade during this range period.. Will update about that later on in detail.

The daily colors are still neutral as of now but can come sell on break of range of 5400 and 10700 for Nifty and Bank Nifty.

Best would be stay light and learn something new.

India Futures failure to maintain the bullish gap

Indian Indices on Friday saw strong sell off. The bullish formations were negated like closing the bullish gap formation. This is very typical in a Weekly Lev Sell color.

The longs were booked at break of 5550 levels and 11050 levels.

Now the indices are at crucial support levels on daily charts as the retracement till now is healthy. The downside support is at 5400 and 10700 levels. Till then the indicators are neutral.

For your observation: The index gave bearish signs (+/- 0.5%) at  the mean reversion levels we discussed.

Nifty Bank Nifty non stop rally

The Indian Indices Nifty and Bank Nifty has rallied for last 6 days. We had longs from 5375 and 10400 levels. See the post here yourself. What a rally.

The Bank Nifty and Nifty are now in proper buy signals.

This kind of rally is always expected when the street sentiment is so skewed to one side move and the move always happens in the opposite direction. In the earlier post we made that sentiment call.

What now.  Well, Indices closing in green for last consecutive 5 days with the best ever breadth of recent times. This combined with no down ticks at the crucial mid band mean reversion point is bullish sign.
The index has held the earlier upside gap with one formed today so it surely seems that the current wave has way to go.
The next logical resistance is the 200 DMA at 5625/5630 levels and the Fibonacci resistance at 5610 levels could be possible profit taking points although watch for down ticks there.

India futures: Bank Nifty outperformimg

Bank Nifty has continued its stellar performance with 8% rise from 10K levels.
This was expected as Bank Nifty has been relatively out performer to Nifty in Feb.

The Bank Nifty is now in reduced buy mode from 10400 levels with Nifty from 5375 levels.
Since this is the first bounce we can be cautious for down ticks.

Bank Nifty is now at crucial trendline resistance which has contained the fall. So it will be worth watching if the uprise stalls at these levels.

The street confidence is so skewed to sell that the consensus is to sell on rise. While this has been done for last 3 weeks will it sustain more. How come all people feel the same and that also with so much conviction.

Could the tide turn at this much extreme sentiment? I feel that given the strong view there could be some fall in short term but further than that the macro event of Budget comes into play.

Is there any seasonal pattern to Budget time indices return. We will found out in later posts.

At last Indices in green; Bank Nifty in black now.

Indian indices Nifty and Bank Nifty ended in green and today started with gap up.
The shorts were covered at 5265and103000 levels. Bank Nifty which has been relatively bullish moved up a lot.

Now the question is should we go long.

Well there are no signs of going long untill we hold today's gap. The upside has resistance which are quite near.

The color of Bank Nifty is in Neutral from y'day on daily timeframe so that is the most bullish bet as of now.

Why do we tend to go for the bias instead of searching the right direction?

I hope the heading does not put you off or make you think this could be a long discussion post.


What I mean is that some of my recent posts emphasized that the markets are at support levels like Nifty at 5250-5200 band, Bank Nifty at 10K levels, BSE500/Nifty ratio also at double bottom with bearishness at extreme. We booked partial short at 5250 and 10200 but the markets are still down. Though it was good that the other half is still there. But the color was Lev Sell for all the timeframes and there was not even 1% bounce back which could indicate any strength.


What I mean is that our search for bottom or support is it a bias or based on some true foundation?
When we try to predict the market how often it sets in our mind and our eye searches for confirmation only.
The charts and studies starts telling the same story which is revolving in our heads.

These are few points to ponder would appreciate if someone shares his insights.

India Futures 10 Feb: What after 5225?

Nifty and Bank Nifty futures have reached target of 5225 and 1000 levels. Post here.

The daily and weekly color is still Lev Sell so the shorts imitated at 5490 and 10600 are partial closed and the rest will be closed at proper exit signal.

The market is showing signs of extreme bearishness at these levels which can lead to some bounce or range mode since we cannot know when that happens the rest of shorts are continuing so that we should not be left out of any down move.

The Nifty index is still to show any sign of strength on hourly charts. The Bank Nifty though has shown signs of strength and is holding the levels of 10000.

India futures update 9 Feb

Nifty has finally moved below 5300 levels and Bank Nifty near to 10000 levels.
All this looks really bad as markets are breaking all the supports and showing no signs of strength at any levels.

Well one should not fight rising ADX especially when it is above 30 levels. Two days back only I posted (link here) that the ADX is rising from below 20 levels and the trend is bearish. It was the same trade setup which occurred in Sep rally for markets.

For Bank Nifty the 10000 levels will be psychological and action at this level will be worth watching.

The Fibonacci projections for the current wave stands at 5220 levels and for Bank Nifty at 10000 and 9700 levels.

India futures: Rising ADX not good

Nifty has rising ADX at 33 levels with bearish DMI. This has never been a good sign as the indicator has high success rate given that it is rising from below 20 levels.

The index has closed below the lower bollinger band thrice in 2011 with last friday the latest. Also there is crossover of 20 and 200 SMA on daily charts.

The futures are still in bearish zone after the shorts added at 5490 levels and 10600 levels. Daily and weekly for both Nifty and Bank Nifty are in Lev sell mode.

What happened to markets? Did we miss anything?

What a sell off, looks like someone exited India in a big way.

We were Neutral in morning but added shorts at break of 5490 levels which was the trigger for larger sell off.
The daily and weekly being still in Lev Sell any slight short opportunity can be taken to enter the market.



Meantime look at the post here and here. These all are long term signals which were posted quite earlier.