Commodities update 6 Jan

Gold got sold off 2-3% and there were news everywhere.
Well I did the analysis of Gold some time back here in early Dec  where the candles were pointing to range bound move ahead.

The comdty got sold off exactly from the resistance of 1430 levels and is now at lows of last 3 weeks.
The candles still are bearish pointing to reversal with selloff coming at highs above 1415 levels.

What to expect now: The charts are certainly range bound with resistance at 1435 levels. The bullish trend though is still intact with trendline support intact.
The comdty can see some cooling off to the 1350 levels where volume action can be judged for further upside.

Trade Example: Bull Phase Entry points

This post is to highlight some of the good entry points for the Bull phase.

The best entry points are on declines to suitable level where buying emerges. One such entry points is the 50 SMA where many times the buyers enter in a big way and propel the indices to new highs.

One such example is recent bull phase in SPX.

The index has been in the bull phase from mid Nov.  Whenever the index touched the 50 DMA it made a new high.

Highlighted are 3 points on 4 hr charts when the SPX made a new high. Most recent was y’day when it declined to 1256 levels but then closed at new yearly high.  Now the catalyst was ISM report and Employment numbers but the charts were foretelling that this is a good entry point for the upmove.

Attached is the chart.

Well, the above trade is not as easy as many other factors need to be considered to differentiate good entry so that risk reward is favorable. Example is Gold decline in last 2 days.It failed to move up on touch of 50 SMA on daily charts.

I will make a detail system with proper back testing results for the above system

India Futures update 6 Jan

Nifty continues to be in neutral mode on Hourly and Buy mode on daily charts. The crucial level to maintain is 6060 for the bullishness and 5980 for the structure to remain bullish.

The index is showing signs of consolidation instead of any breakout as of now. The major level to watch is action at 6100 which is an important fibonaci cluster here.

Though the Hourly Daily structure indicates that some spurt can be there. This particular setup is the D60-H40 and I will write about that later on.

Bank Nifty is Sell Mode on Daily charts after break of 11500 levels.

Reliance is in Lev Buy on Hourly and Daily charts with support at 1060 levels for Hourly charts.

See more details Sectors here and about Color here.

India Sectoral Trend Weekly as of 4 Jan

India sectoral color can give a sense of flow which can be used for positioning.
The update is as of 4 Jan eod and are based on weekly charts which are less volatile than daily charts.
This means that the weekly color has more significance than daily color.

Key observations:

1. BSE FMCG index is now in weekly Lev Buy mode which was triggered on Friday 31 Dec.

2. BSE Metal is also in Lev Buy mode.

3. Both the FMCG and Metal Index changed from Neutral to Lev Buy mode which assumes more significance and can be bot on first change of color.

4. Nifty changed to Lev buy from Neutral and has been updated regularly here in this blog.

5. PSU, Midcap and Small cap are in Lev Sell mode. The PSU Index has been in sell mode from 19 Nov.

Color view.
 

Picture of Major Movers India

Here is the standing of the major movers for Indian markets.

The level of reversal means support for long position and resistance for short positions and from where the respective view changes.


Legend:
Lev Buy --> Leverage Buy. It means one can go 150% of the normal size for the position.

Nifty and Bank Nifty profit book 4 Jan

Both Nifty and Bank Nifty have given profit booking signal.

Bank Nifty had profit booking at 11700 levels and the Nifty at 6160 levels.

Closing the trades mentioned here.

China SHCOMP something is cooking here

China has been more in news for bearish factors than bullish as every rate hike as preceded a decline in global equity markets.
The index has been one of the most laggard in BRIC's indices.

But there is something very unusual happening in the SHCOMP index.
The volumes have made new highs in last quarter  and then declined to average levels.
The chart shows that volumes have been highest in last 4 years even higher than 2007 peak.

Rising volume with rising price is the bets indicator for further bullishness and that has happened in the marked areas of chart.  The worrying factor is the sudden decline in volumes after the spurt. It shows no follow on.

Also this time the index gave most of the gains and is now trading at the supporting trendline.
All this indicates reduced interest at the prices above 3000 levels.

Strategy from here:
If the index maintains the 2770 levels which is trendline support then we can see new highs above 3200 levels and if it breaks the 2770 levels then 2200 is a possibility.

Another possibility is within range of 2770 and 2900 levels. Thats where no major trading can be done.

I feel range bound has higher possibility from here than the straight breakout.

Nifty & Bank Nifty update 4 Jan

Nifty is struggling at 6200 mark which is an important level to cross for the bullishness to remain.

The 6200 level is also the 76 retracement level of the recent fall from peak and for Bank Nifty the levels of 11900 is the 38% retracement.
So for further bullishness from here the indices has to cross these mark otherwise it can be another bounce back rally.

In Nifty there have been many instances where the index bounces to 80% of the levels and then starts fall again.
For that we need to see action at 6220 levels, if the volume returns above those levels then it can make a new high.

One more area of concern is the low volume activity on the rise which is a bit bearish here.

Bank Nifty: The index stalling at 38% retracement level itself shows that there is weakness and it can continue to log for some more time.The 11700 is an important level to maintain for any bullishness.

The system is long with first stoploss at 6150 levels.

State of Market 3 Jan: Bullishness follows

Nifty gave the leveraged buy signal on 22 Dec in post here. The Index still continues to be in Lev buy mode. The index has made two gap ups in the process. Updated chart.

Doing the state of market analysis shows that about 50% of the stocks are in leverge buy mode with 75% in total buy mode.

I have chosen the liquid FnO stocks for the analysis as by doing so the liquidity can be tracked in a better way.

Nifty update for 3 Jan

Nifty and Bank Nifty are in strong buy signal form 29th onwards and the buy was triggered at 6050 and 11550 levels.

The same has come on daily leveraged buy signal.Post here. This shows conformation from 2 systems.

Chats

Other technical indicators are also pointing to bullishness.