Thursday, May 20, 2010

Gold Views!!!

I haven’t done a post on Gold since this one…Anyway here it goes…

First the weekly chart on to your left; you can see we’ve had one steep rise in gold and the dotted orange trend line is in for some serious testing!!!! Also I have put a small dashed white TL at approx 1175 (based on closing price), any close below this would put pressure on gold to test 1140 and perhaps 1100 too…for starters. Finally we are having a negative divergence on the weekly chart…Price will confirm it by failing to hold to previous Highs and make a new lower high and then perhaps a lower low too???

The daily chart above to your right also shows a steep parabolic rise we have seen in last three and a half is falling from overbought levels…and heading to test the neckline of the inverse H&S and the 50 periods moving average! It would pay to watch the price action at 1150/70 coz any weakness there would result in sharp $50 drop!

PS: If you are a trader who trades on technicals, then I would suggest, trade what you see on your charts and don’t worry about gold/equity relationship…coz getting into that will only confuse you further!!!!

Reliance Futures.....A Wedgeee Play???

Tuesday, May 11, 2010

Readers Contribution....BalrampurChini !!!

It seems Sugar is everybody’s favorite, below is a chart contributed by a good friend and a regular reader of the blog, Anup Bade. Anup is bullish on Balrampur Chini and uses RSI for most of his trades.

  Thank You Anup for contributing here!!!

Monday, May 10, 2010

Do You Have A Checklist??? Never Too Late To Make One!!!

I recently read a book review by Dr Alexander Elder, of a book by Atul Gawande, titled The Checklist Manifesto, and decided to buy a copy for myself. It’s well written and makes a pretty light reading. The book deals with the concept of making or rather having checklists for works to be done. It journeys into introduction of checklists, in aviation industry(You are safe in the air coz your pilot has A CHECKLIST), as early as early as 1930’s. It also delves into how the checklists when introduced to construction, have resulted in safe buildings and very importantly checklists introduced into health care have drastically reduced accidents and errors in operating room and also have resulted in less post operative complications.

Why am I talking about the book, because like Dr Alexander Elder, I also believe that traders especially intra players need to have some sort of checklists, to avoid them for turning into trigger happy Johnny’s! In fact many must be already having there lil checklists, some written and some mentally stored. Some in form of spreadsheets and rulez they follow, nevertheless we will discuss here how a basic checklist should be like. Now before I proceed, let me inform you that most of the stuff I am putting forth, I have picked up from different people whose trading has influenced me. I also believe that by the time you are done with your checklist, it will be unique to your trading style and personality, but the goal remains the same for every one-“Not to loose Money”!

Ok we all know that you keep a tab on global markets and some broader news items on Bloomberg, but when it comes to opening bell what would you do….well you would observe the open and then subject it to the following checklist and hope you arrive at a sane decision. We will concentrate more on two scenarios, where at the opening the OPEN LOW or the OPEN HIGH are same, as both these scenarios give pretty good intraday trades!

If Open High is same
If OH is below the Daily Pivot or S1 Or S2
More Negative
If OH is below the breakdown level of some Pattern Play/MA/Trend line
More Negative

In the above scenario one can go short with the Stop at OH. Adherence to the Stop is a MUST. If the price is hesitant to fall and takes out the OH, then it becomes more potent for a powerful move on the upside!

If Open Low is same
If OL is above the Daily Pivot or R1 Or R2
More Positive
If OL is above the breakout level of some Pattern Play/MA/Trend line
More Positive

In the above situation a long trade can be taken with the OL as the Stop. Similarly to the OH scenario, here also, if the price cuts below the OL it makes the scrip an ideal candidate for stop and reverse to short for a powerful down move.

A few more pointers to look into;

Price trading above/below the ATP

Volumes Increase with Increase/Decrease in Price
Most Active Calls/Puts

This is not THE LIST but something you can work on and refine and improve. Similarly you can have a checklist in case of GAP openings! Always remember that you can make the best practical checklist but what’s important is that you follow it. You must have the patience (a whole lot of patience) to wait for your trades to materialize and the tons of conviction to carry them through. It’s easy to have the conviction if you are loyal (fiercely loyal to your STOPS)!

Saturday, May 8, 2010

ICICI Views!!!

Weekly Glance At The World Indices!!!

We Lose Some...and Then We Win Some!!!

ONGC Views!!!

Oil & Gas Index has been underperforming the broader Index for a long time and so has been ONGC. But now it seems to be changing tracks, see the chart above (top right), it shows the RS line (below in blue) of ONGC(green Line) vis a vis Nifty (red line) beginning to move up. Alos if you notice though Nifty has made a new lower low ONGC has had a higher low.

The weekly chart (bottom right) is to show you the broader picture and how its holding above some important support!

The daily chart to you left, has some convergence happening (need to have patience for Divergence as none happening yet);

  • We are trading at the 20/50 EMA zone
  • We have already jabbed the Down trend line from Jan Highs
  • The weekly is kinda OS

 ONGC trading above 1045/50 faces resistance at 1060/62, and then it’s straight towards to likely breakout resistance at 1080 (a confluence of channel resistance and 200 periods EMA!), which holds the key to the future move in it!

RIL Views!!!

SnP 500 Views!!!

Dollar Views!!!

Monday, May 3, 2010

SnP 500 Views!!!

With SnP 500 it aint over yet! I have put forth, both the weekly as well as the daily chart, to show that so far what we are witnessing are just dips and not the DEEPS!!!

I have always maintained that till the time we don’t break and close below the 1150 mark, there wont be any significant change in the bullish set up. As repeated many a times, we need to make a lower high and then a lower low to fathom any change in trend! I have added the fibs on both the time frames, to enable you to understand that till what price we treat the dips as pullbacks!!!

As the wise always say the trend is your friend, till it bends…and it aint bending YET!!!

Price/ Volume Breakout Scrips!!!

Below is the list of stocks, which have given a price/volume breakout (yes…there’s always a bull market somewhere!!!). The parameters used to scan this list were “Displays securities where the price increased 5% and the volume is 50% above a 50-day moving average”.


In the chart above, you can see the current close followed by the previous close which leads to the percentage change! Then of course the volume, the 50 day MA of Volume and the percent increase in volume.

Another filter I added was RS (Relative Strength Comparative) measuring the strength of the scrip vis a vis nifty. And to put it graphically I have put  charts of Uttam Sugars (to your left) and Valecha Engineering (to your right) showing the two most extreme cases where one is underperforming the nifty and the other outperforming, and yet both are breakout candidates!!!  Who knows Uttam Sugars, the laggard, might be just starting a turnaround story???