A look at YEARLY charts of Sensex and Nifty and try and predict what might happen in 2013.
I will be posting this study tomorrow - Sunday 9th December
I will be posting this study tomorrow - Sunday 9th December
Saturday, December 8, 2012
Tuesday, September 25, 2012
A TRADERS' MEET
Announcing, perhaps, for the first time ever in India, a residential Traders' meet in Bangalore on 26th and 27th October.
This will be an unique opportunity for traders who trade with the help of Technical analysis.
There is a lot to be learnt from the speakers and also getting to know many other traders.
MORE DETAILS HERE:
www.traderscarnival.com
Friday, March 9, 2012
The DIRTY picture or the BIGGER Picture
After the massive rise from 4531 to 5629 in 2 months, the last standing bear had become bullish and had started talking of new highs in Nifty (above 6350). Targets of 7500 were also given on some channels.
The rosy picture soon became a DIRTY picture from 22nd February, and Nifty fell all the way to 5171, supported by the dismal performance of the ruling Congress in the state elections. As expected, the last bull became bearish and targets of even 4900--4200 were given.
Here it pays to see the BIGGER picture - weekly chart of Nifty. During the massive rise to 5629, Nifty had broken through a parallel channel above 5250-60.
Weekly charts seem to indicate that the subsequent fall is nothing but a retest of the breakout, and the recent low 5171, was exactly on that trendline. Additionally, the 200 DMA also could not be ignored.
Once bulls realised on Wednesday that they had managed to successfully protect the trendline as well as the 200 DMA, they did what they do best - a gap up today of almost 50 points (this gap may or may not be filled in coming days).
No sooner had they managed to trap bears today, good news started flowing in - a 75 bps CRR cut, and also rumours again of abolition of STT.
As long as the breakout above 5171 holds (the trendline), a simple arithmetic calculation gives a target of 5920 - 6000 in coming weeks / months.
In the process, the current weekly candle is a long-legged doji (almost a hammer), and once the high of 5382 is crossed next week, bears might panic. This level is just 40 points away from today's close and another gap up on Monday can take Nifty above 5382.
Happy trading.
The rosy picture soon became a DIRTY picture from 22nd February, and Nifty fell all the way to 5171, supported by the dismal performance of the ruling Congress in the state elections. As expected, the last bull became bearish and targets of even 4900--4200 were given.
Here it pays to see the BIGGER picture - weekly chart of Nifty. During the massive rise to 5629, Nifty had broken through a parallel channel above 5250-60.
Weekly charts seem to indicate that the subsequent fall is nothing but a retest of the breakout, and the recent low 5171, was exactly on that trendline. Additionally, the 200 DMA also could not be ignored.
Once bulls realised on Wednesday that they had managed to successfully protect the trendline as well as the 200 DMA, they did what they do best - a gap up today of almost 50 points (this gap may or may not be filled in coming days).
No sooner had they managed to trap bears today, good news started flowing in - a 75 bps CRR cut, and also rumours again of abolition of STT.
As long as the breakout above 5171 holds (the trendline), a simple arithmetic calculation gives a target of 5920 - 6000 in coming weeks / months.
In the process, the current weekly candle is a long-legged doji (almost a hammer), and once the high of 5382 is crossed next week, bears might panic. This level is just 40 points away from today's close and another gap up on Monday can take Nifty above 5382.
Happy trading.
Thursday, March 1, 2012
How Volumes can confuse a trader
Volumes in a stock are very crucial in Technical analysis, and are generally followed by all good analysts. However, just as a chart can look different in different time frames, volumes too can be interpreted differently.
There was an example of this in DLF on NSE today. Anyone who studies only daily charts, would see that DLF declined 5.5% and with a 35 day high volume figure of more than 2.55 crores. This number is also 2.5 times the 20 day average.
This is bearish for the stock.
However, a peek into the intra day chart gives a completely different picture. The 15 min chart shows that DLF crashed from 216 to 197, and rose back fast. The rising volumes were far more than the declining volumes.
Anyone who follows hourly charts will treat this as a bullish sign.
As they say on Twitter #youprefer
There was an example of this in DLF on NSE today. Anyone who studies only daily charts, would see that DLF declined 5.5% and with a 35 day high volume figure of more than 2.55 crores. This number is also 2.5 times the 20 day average.
This is bearish for the stock.
However, a peek into the intra day chart gives a completely different picture. The 15 min chart shows that DLF crashed from 216 to 197, and rose back fast. The rising volumes were far more than the declining volumes.
Anyone who follows hourly charts will treat this as a bullish sign.
As they say on Twitter #youprefer
Tuesday, January 24, 2012
Is January 2012 the new October 2011 ???
Nifty has touched the 200 D EMA (5129) today, and a close above it can take to the 200 D MA at 5211 - so the current chart says !!
What does the title mean - 'Is January 2012 the new October 2011 ?'
To see what can happen in the future, it is better to see what happened in the recent past.
The stock market saw a spectacular rally in October 2011 against all odds, when everyone was giving targets for Nifty which were far lower. There was a major congestion zone around the 5170 - 5200 band which was formed from August 2011. Nifty faced a major hurdle at this band and declined all the way to 4728 in early October and then a sharp rally happened which crossed the congestion zone. It cleared all hurdles making a double bottom, a W bottom - all hints of a significant bottoming formation. Nifty went all the way to 5399, and then many started giving targets of 5400--5700.
What happened then - Nifty could not cross the major resistance at 200 DMA (near 5400) and crashed all the way down to 4640 in just 3 weeks.From the bottom of 4640, the next rally took it to 5099, only to make a new low at 4531.
This 'previous swing high' of 5099 was successfully crossed today.
I am afraid, crossing just a previous swing low cannot be a start of the 'next bull run'.
The monthly chart clearly suggests that a bottoming out can be confirmed only on a close above the trend-line (above 5150-75 on a monthly basis). This might seem pretty easy, since there are 4 days left for January to close and the hurdle is only 50 points away.
However, a bottoming out formation needs to happen on the monthly chart too, and it either needs to spend a few weeks near the lows, or keep going down and rising to form a U shaped bottom. A fast rally in the form of a V shape is generally dangerous.
Monthly chart:
Looking at the rally in October and now, it is seen that the sector leading the rally is different in both cases. It was the CNX IT that led the rally then, but it failed to cross the Oct high of 6432, and has crashed below 6000.
CNX IT chart:
The sector that led the rally this time is Banking. The BankNifty too has not been able to cross the October high yet (10080 then, 9885 today). I heard someone saying that the BankNifty is at a level equivalent to Nifty 5400 already - yes, fine, but what about CNX IT.
It is not correct to use this as an explanation that a major bottom is formed.
Looking at the other indices, Midcap and Nifty Junior, one can see that these topped out a little later than Nifty in October (they topped out in early November), and are still way below that top.
Midcap and Nifty Junior:
So, what does this all mean?
I doubt that a bottom has been made, and Nifty might start going down in the first week of February.
Nifty might go sideways in the next week to 10 days, and midcap stocks might still rally (similar to what happened in early November).
One midcap idea:
If the market behaves as mentioned above, Aurobindo Pharma looks promising as long as it does not go below the recent low of 95.5. Aggressive traders can buy now with a stop below 95, and conservative traders can buy above 106 for a target near 125 - 130.
What does the title mean - 'Is January 2012 the new October 2011 ?'
To see what can happen in the future, it is better to see what happened in the recent past.
The stock market saw a spectacular rally in October 2011 against all odds, when everyone was giving targets for Nifty which were far lower. There was a major congestion zone around the 5170 - 5200 band which was formed from August 2011. Nifty faced a major hurdle at this band and declined all the way to 4728 in early October and then a sharp rally happened which crossed the congestion zone. It cleared all hurdles making a double bottom, a W bottom - all hints of a significant bottoming formation. Nifty went all the way to 5399, and then many started giving targets of 5400--5700.
What happened then - Nifty could not cross the major resistance at 200 DMA (near 5400) and crashed all the way down to 4640 in just 3 weeks.From the bottom of 4640, the next rally took it to 5099, only to make a new low at 4531.
This 'previous swing high' of 5099 was successfully crossed today.
I am afraid, crossing just a previous swing low cannot be a start of the 'next bull run'.
The monthly chart clearly suggests that a bottoming out can be confirmed only on a close above the trend-line (above 5150-75 on a monthly basis). This might seem pretty easy, since there are 4 days left for January to close and the hurdle is only 50 points away.
However, a bottoming out formation needs to happen on the monthly chart too, and it either needs to spend a few weeks near the lows, or keep going down and rising to form a U shaped bottom. A fast rally in the form of a V shape is generally dangerous.
Monthly chart:
Looking at the rally in October and now, it is seen that the sector leading the rally is different in both cases. It was the CNX IT that led the rally then, but it failed to cross the Oct high of 6432, and has crashed below 6000.
CNX IT chart:
The sector that led the rally this time is Banking. The BankNifty too has not been able to cross the October high yet (10080 then, 9885 today). I heard someone saying that the BankNifty is at a level equivalent to Nifty 5400 already - yes, fine, but what about CNX IT.
It is not correct to use this as an explanation that a major bottom is formed.
Looking at the other indices, Midcap and Nifty Junior, one can see that these topped out a little later than Nifty in October (they topped out in early November), and are still way below that top.
Midcap and Nifty Junior:
So, what does this all mean?
I doubt that a bottom has been made, and Nifty might start going down in the first week of February.
Nifty might go sideways in the next week to 10 days, and midcap stocks might still rally (similar to what happened in early November).
One midcap idea:
If the market behaves as mentioned above, Aurobindo Pharma looks promising as long as it does not go below the recent low of 95.5. Aggressive traders can buy now with a stop below 95, and conservative traders can buy above 106 for a target near 125 - 130.
Sunday, January 22, 2012
Speed breaker ahead for SBI
Update on SBI - comments on chart self explanatory.
Moreover, it is also approaching Overbought zone on daily chart
Wednesday, January 18, 2012
Bears in SBI - CAUTION
After the massive move in DLF, here is another stock that can rally fast and furious.
It has been the most hated stock in the past few months, and probably wants to give it back to bears this month.
SBI - A close above 1875 can take it fast to the 200 D EMA (2058) and possibly the 200 D SMA (2136).
The breakout is a parallel channel breakout of almost Rs. 300, and the 200 DMA is a good target to achieve - SBI has been below the 200 DMA for the last 7 months, and a rally back to 200 DMA is very much on the cards.
All the best...........happy trading
Tuesday, January 10, 2012
So, here is an interesting chart - DLF, the stock which is firmly in a bear trend.
However, the volumes traded today (3.62 crores) were extremely high (4th highest ever for the stock in its history, which includes the listing day).
Historically, whenever this has happened, DLF has rallied between 6 to 10% from that days close.
This gives 2 targets 195 and 203 if this move happens now.
Moreover, this moves come after DLF has moved up after making a low near 173 (the third time in 5 months that it has turned upwards from here). This can serve as a multi-month bottom, giving more power to the bulls.
Looking at current charts, DLF has a resistance between 192 and 196, where it might take a pause. But once crossed, it can race upwards to 205-210 - all in this month.
Good luck.....
New Year's resolution
Sorry for being away.
But..........
My New year's resolution :
TO RESUME BLOGGING AND DO IT REGULARLY.
Watch this space soon............
But..........
My New year's resolution :
TO RESUME BLOGGING AND DO IT REGULARLY.
Watch this space soon............
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