Nifty has top formation kind of candles in last 3 sessions.
On 16th the index opened with a gap up but ultimately it was kind of shooting star formation. Next day it gave dragon fly doji and today the formation is again shooting star.
The index also closed the gap it had on 16th and the high on that day is still to be crossed in futures. The band has been too narrow as the index is trading within 60 to 70 points intraday.
In pivots also the Nifty has closed touched the second support (S2) and is closing below the R1 from last two days.
Is it pause in the move or change in direction going forward? Well right now time has the answers.
There are some times in trading when it is better to let time resolve the formations and then trade those formations. I feel it is one such time right now.
Wednesday, November 18, 2009
Monday, November 16, 2009
Entry point for a trade
There is a well known saying that in investing you shoul buy when others are selling and sell when others are buying. I feel it is true in some sense for trading the bottoms or when looking for entry for a trade.
Nifty got sold off aggresively on 12th Nov and it tested the 20 hourly MA on 60 min charts. The index was down by more than 1% in one hour. The breadth was totally skewed to declines. It seemed that the market will move down from here.
But well Nifty is now above more than 2% from those levels. So what seemed like selling/shorting point was in fact the buying point for the next rally.
There were many indications for the same. Major one was holding of the 20 hour MA on intraday charts and the quick reversal form the down candle. Second one was that the Nifty never broke down form the first Support pivot on that day. Moreover there was a perfect hammer candle on 15 min charts.
Altough I do not usually see charts below the 60 min but some times the action in 15/30 mins do provide a real good view when the market is at crucial support levels as Nifty was at 20 MA support on that day.
This shows the convergence of multiple signals which become powerful to trade.
Nifty got sold off aggresively on 12th Nov and it tested the 20 hourly MA on 60 min charts. The index was down by more than 1% in one hour. The breadth was totally skewed to declines. It seemed that the market will move down from here.
But well Nifty is now above more than 2% from those levels. So what seemed like selling/shorting point was in fact the buying point for the next rally.
There were many indications for the same. Major one was holding of the 20 hour MA on intraday charts and the quick reversal form the down candle. Second one was that the Nifty never broke down form the first Support pivot on that day. Moreover there was a perfect hammer candle on 15 min charts.
Altough I do not usually see charts below the 60 min but some times the action in 15/30 mins do provide a real good view when the market is at crucial support levels as Nifty was at 20 MA support on that day.
This shows the convergence of multiple signals which become powerful to trade.
Thursday, November 12, 2009
SPX recent shorts
S&P 500 rallies seems to be driven entirely by the short coverings. Every time there is a fall the SPX reverses and makes a new high.
Also there is remarkable similarity in the way the fall comes and the %age of the fall.
Like the average fall for last 4 times has been 5.5%age form the top and then there is new top formation of about 2-5% from previous top.
The same pattern was in play during the recent downtrend and then rally. Also SPX has made a new high at 1105 worth noting is how much further the rally can go now.
Also there is remarkable similarity in the way the fall comes and the %age of the fall.
Like the average fall for last 4 times has been 5.5%age form the top and then there is new top formation of about 2-5% from previous top.
The same pattern was in play during the recent downtrend and then rally. Also SPX has made a new high at 1105 worth noting is how much further the rally can go now.
Nifty Fibonacci levels
Sometimes indices respect fibonacci levels to the point. The recent rally in Nifty is one such case.
The rally from 4550 had first major support at 4775 (38.2% retracement levels) then the next levels of 50% at 4860 proved support for the next leg up.
And from last two days Nifty is facing resistance at 76.4% levels of 5024 and the sell off from there took support at 61.8% levels of 4930.
The entire fall in retraced 76.4% times which is a major recovery. Needs to be seen if the current wave is impulse or still a correction.
The rally from 4550 had first major support at 4775 (38.2% retracement levels) then the next levels of 50% at 4860 proved support for the next leg up.
And from last two days Nifty is facing resistance at 76.4% levels of 5024 and the sell off from there took support at 61.8% levels of 4930.
The entire fall in retraced 76.4% times which is a major recovery. Needs to be seen if the current wave is impulse or still a correction.
Tuesday, November 10, 2009
Weekly Indices review 10 Nov 09
Auto Sector
CMP: 6621 The index took support at 50 DMA of 6250. Weekly candles are bullish with good base formation.
Resistance level is 6750 which is old top. Support at 6400.
Market Perform Can be brought on cross of 6700. Break of support of 6400 is bearish.
Cap Goods
CMP: 13140 Index is below the Daily 50 MA of 13400. Also weekly charst have bearish RSI divergence.
The levels of 13500 is 50% retracement which is resistance now.
Under Perform Any bounce to 13000 above levels can be shorted as fibonacci breakout has failed.
CNXBank Index
CMP: 9125 The weekly charts still show more upside momentum as is it still above the 21 WMA of 7950.
Strong weekly candles suggests 9500 top can be crossed.
Market OutPerfrom Support of 8950 and resistance of 9600.
FMCG Index
CMP: 2825 Weekly charts have bearish RSI divergence although the upside momentum is still strong.
Support at 2650 levels. Resistance is at 2900.
Market Perfom Short term weakness can be brought.
Healtcare Index
CMP: 4578 Weekly breakout on charts. Strong upside momentum.
Daily prices at support of 21 MA of 4400.
Market OutPerform Dips to be brought.
IT Index
CMP: 4492 Short term weakness is there on weekly charts
Support at previous bottom of 4260. Resistance at 4600.
Market Perform Range bound movemnet within 4800 to 4200.
Metal Index
CMP: 14850 Weekly rebound from 21 MA of 1300 levels.
Shorting can be done at top of 15500 as RSI divergence is there.
Market Perform Resisatnce is at 15000 levels.
Oil & Gas Index
CMP: 9861 Weekly charts are rebounding from lows. Bearish formation as RSI divergence is there.
Daily charts have resistance at 10000 levels.
Market Underpeform The index has resistace at 10000 levels.
Power Index
CMP: 2990 Index holding support at 21 WMA of 2950.
Daily resistance is at 3050 levels.
Market UnderPeform Shorts can be added at 3100 levels.
Realty Index
CMP: 3827 Index has not broken out of 23.6% retracemnet levels.
Daily resistance levels are 4300 levels.
Market UnderPerform Weakest sector among all. Major support is at 3000 levels.
CMP: 6621 The index took support at 50 DMA of 6250. Weekly candles are bullish with good base formation.
Resistance level is 6750 which is old top. Support at 6400.
Market Perform Can be brought on cross of 6700. Break of support of 6400 is bearish.
Cap Goods
CMP: 13140 Index is below the Daily 50 MA of 13400. Also weekly charst have bearish RSI divergence.
The levels of 13500 is 50% retracement which is resistance now.
Under Perform Any bounce to 13000 above levels can be shorted as fibonacci breakout has failed.
CNXBank Index
CMP: 9125 The weekly charts still show more upside momentum as is it still above the 21 WMA of 7950.
Strong weekly candles suggests 9500 top can be crossed.
Market OutPerfrom Support of 8950 and resistance of 9600.
FMCG Index
CMP: 2825 Weekly charts have bearish RSI divergence although the upside momentum is still strong.
Support at 2650 levels. Resistance is at 2900.
Market Perfom Short term weakness can be brought.
Healtcare Index
CMP: 4578 Weekly breakout on charts. Strong upside momentum.
Daily prices at support of 21 MA of 4400.
Market OutPerform Dips to be brought.
IT Index
CMP: 4492 Short term weakness is there on weekly charts
Support at previous bottom of 4260. Resistance at 4600.
Market Perform Range bound movemnet within 4800 to 4200.
Metal Index
CMP: 14850 Weekly rebound from 21 MA of 1300 levels.
Shorting can be done at top of 15500 as RSI divergence is there.
Market Perform Resisatnce is at 15000 levels.
Oil & Gas Index
CMP: 9861 Weekly charts are rebounding from lows. Bearish formation as RSI divergence is there.
Daily charts have resistance at 10000 levels.
Market Underpeform The index has resistace at 10000 levels.
Power Index
CMP: 2990 Index holding support at 21 WMA of 2950.
Daily resistance is at 3050 levels.
Market UnderPeform Shorts can be added at 3100 levels.
Realty Index
CMP: 3827 Index has not broken out of 23.6% retracemnet levels.
Daily resistance levels are 4300 levels.
Market UnderPerform Weakest sector among all. Major support is at 3000 levels.
Monday, November 9, 2009
Nifty buy in Point & Figure
Nifty futures have reversed and now in buy mode. The rebound was from the trendline support area.
The previous high of 5100 is still the resistance zone.
The previous high of 5100 is still the resistance zone.
Saturday, November 7, 2009
SHCOMP Trendline action
SHComp index has an interesting trendline formation on weekly/monthly charts.
The index has taken support at the Mar 09 and Oct09 trendline till now while at the same time it is now at resistance of trendline from 2008 highs and Aug'09 highs.
This does not qualifies as a triangle technically. The volumes have been higher on upmoves which shows a possibility of a break on upside. The elliot count also in corrective wave.
What is interesting is that the break out direction will set the stage for the world indices as shcomp has been leading index till now.
The index has taken support at the Mar 09 and Oct09 trendline till now while at the same time it is now at resistance of trendline from 2008 highs and Aug'09 highs.
This does not qualifies as a triangle technically. The volumes have been higher on upmoves which shows a possibility of a break on upside. The elliot count also in corrective wave.
What is interesting is that the break out direction will set the stage for the world indices as shcomp has been leading index till now.
Friday, November 6, 2009
Nifty 4800 Battlezone
There are some price levels in Index's where there is no direction for days. It is at these levels that the index spends good amount of time as the battle drags on between bulls and bears.
In last few months the levels of 4800 and 5000 has been the major battle zones.
Nifty spend 6 days at 4800 levels in Oct, then 2 days in Nov while going down and now today it again closed at 4800 levels bouncing of from lows.
Same ways Nifty spend 11 days at 5000 levels in Sep/Oct and 3 days in Oct while moving down.
These battlezone levels acts as magnets where the index gets pulled back there again and again. The breakouts are generally large directional candles.
Worth noting is the time spend at these levels.
Lets see how much time nifty spends at 4800 levels this time.
In last few months the levels of 4800 and 5000 has been the major battle zones.
Nifty spend 6 days at 4800 levels in Oct, then 2 days in Nov while going down and now today it again closed at 4800 levels bouncing of from lows.
Same ways Nifty spend 11 days at 5000 levels in Sep/Oct and 3 days in Oct while moving down.
These battlezone levels acts as magnets where the index gets pulled back there again and again. The breakouts are generally large directional candles.
Worth noting is the time spend at these levels.
Lets see how much time nifty spends at 4800 levels this time.
Wednesday, November 4, 2009
Nifty Elliot Count Update
The 5 th wave up in Nifty Index seems to be over after the sharp fall in the indices.
The next wave down now is wave (ii) of larger wave 3 up.
The first part of the corrective wave is an impulse whose count is shown in the chart.
The rebound can be expected to 4750/4820 range .
The next wave down now is wave (ii) of larger wave 3 up.
The first part of the corrective wave is an impulse whose count is shown in the chart.
| Wave | Start | End | Move | |
| 1 | 5182 | 4968 | 214 | |
| 2 | 4968 | 5034 | 66 | |
| 3 | 5034 | 4755 | 279 | |
| 4 | 4755 | 4853 | 98 | ~=1.5* wave 2 |
| 5 | 4853 | 4538 | 315 | ~=1.5* wave 1 |
The rebound can be expected to 4750/4820 range .
China SHCOMP Update
In my earlier post I pointed that SHCOMP and SPX are at trendline support lines. while SPX has broken the trendline, China's SHCOMP moved up from those levels.
The candle formation is not bullish as of now till 3150 is crossed.
The Shanghai index is now at minor resistance line of 3130 which also looks like a triangle in formation. This also supports my elliot view that next upper wave is pending. Since China has been leading the world indices, we can see some upside worldwide. The main question is if the old top in China at 3400 is crossed.
Will update some time later on this index's elliot count.
The candle formation is not bullish as of now till 3150 is crossed.
The Shanghai index is now at minor resistance line of 3130 which also looks like a triangle in formation. This also supports my elliot view that next upper wave is pending. Since China has been leading the world indices, we can see some upside worldwide. The main question is if the old top in China at 3400 is crossed.
Will update some time later on this index's elliot count.
Tuesday, November 3, 2009
Nifty & SPX Point & Figure
Nifty has given the sell signal in Point & Figure format. The index is below the support levels of 4800 which was high of last X columns.
Worth noting is that the recent up trendline is still maintained and the last horizontal support at 4400 is crucial.
Any break below the previous X column lows of 4400 can change the bullish view of Indian Markets.
Also the Index sell off came exactly from the top of the upside resistance line in Nifty. Will Nifty be in the upside channel is worth watching.
Point & Figure charts are best in terms of intermediate term view and tension free trading.
Like after the recent sell signal the Nifty has moved down by 150 points. Only worry is when the reversal occurs.
SPX Point & Figure charts
The SPX has also triggered the sell signal in point & figure. Crucial support level is at 1010.
Worth noting is that the recent up trendline is still maintained and the last horizontal support at 4400 is crucial.
Any break below the previous X column lows of 4400 can change the bullish view of Indian Markets.
Also the Index sell off came exactly from the top of the upside resistance line in Nifty. Will Nifty be in the upside channel is worth watching.
Point & Figure charts are best in terms of intermediate term view and tension free trading.
Like after the recent sell signal the Nifty has moved down by 150 points. Only worry is when the reversal occurs.
SPX Point & Figure charts
The SPX has also triggered the sell signal in point & figure. Crucial support level is at 1010.
Monday, November 2, 2009
Weakness in Energy stocks
Crude has broken out of zone and touched new 52 Week highs of $80. The same strength should reflect in the oil stocks for the oil to trade at new highs.
The normalising graph of CL1 and Exxon shows that the oil stocks in US are lagging the oil movement.
Exxon (XOM) after breaking out quickly gave up all the gains and is back to zone range again.
If this divergence persists than the oil rally will be in danger.
Also note the continuous underperfomance of Exxon to Oil from March lows. The same kind of divergence was there when oil touched the $145 mark.
The normalising graph of CL1 and Exxon shows that the oil stocks in US are lagging the oil movement.
Exxon (XOM) after breaking out quickly gave up all the gains and is back to zone range again.
If this divergence persists than the oil rally will be in danger.
Also note the continuous underperfomance of Exxon to Oil from March lows. The same kind of divergence was there when oil touched the $145 mark.
Disclaimer
All the posts here are for informational use only. Please do not use the buy, sell or hold as any recommendation. They are my own personal view. Before acting on any of the view please use discretion and take advice of yoyr financial advisor.
India Sectoral Indices View
Auto Sector
CMP: 6307 The candles on weekly charts shows weakness. Though daily charts are still strong.
The index is able to hold the 50 Day MA.
Market Perform Major support at 6000 levels which is the old top.
Cap Goods
CMP: 12875 The index is at weekly support of 21 WMA of 12900. The index is below the 50 DMA.
Daily support is at 12000 where the base formation is.
Under Perform Any bounce to 13000 above levels can be shorted as fibonacci breakout has failed.
CNXBank Index
CMP: 8410 The index turned down from the old congestion of 9500. Support is at 8000 levels.
Strength is daily as it is above 50 DMA at 8250.
Market Perfrom Can be brought at 8000 levels as major support is there.
FMCG Index
CMP: 2808 Weekly candles suggest some consolidation at these levels.
Weekly support at 2700. Strongest index among all the sectoral indices.
Market OutPerfom Short term weakness can be brought.
Healtcare Index
CMP: 4377 Weekly candles condolidating. Last high of 4600 is resistance.
Daily prices at support of 21 MA of 4400. Support at 4200.
Market Perform Short term weakness to 4200 can be brought.
IT Index
CMP: 4425 There is clear top formation at 4600 for some time on weekly charts.
Daily 50 MA at 4350 is pivot support now. Break of it support is at 4000 levels.
Market Perform Can be brought at dips to 4000 levels.
Metal Index
CMP: 13940 Weekly support at 13000 levels. Daily charts also at support levels of 50 MA of 13800.
Any short term bounce can be shorted as RSI divergence is there.
Market Perform Daily support is at 13500 levels where buying can be done.
Oil & Gas Index
CMP: 9434 The index is has turned down from 61.8% retracement levels two times.
Weekly major support is at 8500 levels. Daily prices below 50 DMA.
Market Underpeform The index can be brought only at 8500 levels.
Power Index
CMP: 2915 Weekly breakout has failed. Index has not crossed the 50% fibonacci levels.
Support is at 2600 levels.
Market UnderPeform Expect major support at 2650 levels.
Realty Index
CMP: 3827 Breakout on weekly resistance has failed. Weekly support is at 3500.
Weekly 50 MA is at 2850 levels which can be support for the fall.
Market UnderPerform Weakest sector among all. Major support is at 3000 levels.
CMP: 6307 The candles on weekly charts shows weakness. Though daily charts are still strong.
The index is able to hold the 50 Day MA.
Market Perform Major support at 6000 levels which is the old top.
Cap Goods
CMP: 12875 The index is at weekly support of 21 WMA of 12900. The index is below the 50 DMA.
Daily support is at 12000 where the base formation is.
Under Perform Any bounce to 13000 above levels can be shorted as fibonacci breakout has failed.
CNXBank Index
CMP: 8410 The index turned down from the old congestion of 9500. Support is at 8000 levels.
Strength is daily as it is above 50 DMA at 8250.
Market Perfrom Can be brought at 8000 levels as major support is there.
FMCG Index
CMP: 2808 Weekly candles suggest some consolidation at these levels.
Weekly support at 2700. Strongest index among all the sectoral indices.
Market OutPerfom Short term weakness can be brought.
Healtcare Index
CMP: 4377 Weekly candles condolidating. Last high of 4600 is resistance.
Daily prices at support of 21 MA of 4400. Support at 4200.
Market Perform Short term weakness to 4200 can be brought.
IT Index
CMP: 4425 There is clear top formation at 4600 for some time on weekly charts.
Daily 50 MA at 4350 is pivot support now. Break of it support is at 4000 levels.
Market Perform Can be brought at dips to 4000 levels.
Metal Index
CMP: 13940 Weekly support at 13000 levels. Daily charts also at support levels of 50 MA of 13800.
Any short term bounce can be shorted as RSI divergence is there.
Market Perform Daily support is at 13500 levels where buying can be done.
Oil & Gas Index
CMP: 9434 The index is has turned down from 61.8% retracement levels two times.
Weekly major support is at 8500 levels. Daily prices below 50 DMA.
Market Underpeform The index can be brought only at 8500 levels.
Power Index
CMP: 2915 Weekly breakout has failed. Index has not crossed the 50% fibonacci levels.
Support is at 2600 levels.
Market UnderPeform Expect major support at 2650 levels.
Realty Index
CMP: 3827 Breakout on weekly resistance has failed. Weekly support is at 3500.
Weekly 50 MA is at 2850 levels which can be support for the fall.
Market UnderPerform Weakest sector among all. Major support is at 3000 levels.
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