Saturday, June 26, 2010
We had a major announcement yesterday to do with Oil prices…we are moving to free pricing method….immediate result…the prices were free to rise!!! This augurs well for the oil marketing companies which might attract the FII investments and also the fancy of some fund house as sound investments. This also might lead to some political backlash (it usually does…after all politicians are paid for making NOISE!!!) and also will have an effect on inflation. It was this confusion yesterday that kept the NIFTY in a limbo…the OILnGAS sector tried to fire up the Nifty but the Banks doused any such attempt coz of fears that this hike in gas prices might lead for RBI to raise interest rates to curb inflation…so much for gassing around…time to take a look at the weekly chart of nifty;
From the chart above we can make out;
- We have multiple tops happening at 5400(cool that makes it one breakout point!)
- We still trading above all the three key weekly EMA’s
- Lengthy Negative Divergence on the indicators below
And now to the daily chart below;
- We have drifted too far from the nearest MA…mean reversion!
- A bull Flag?
- We still above all the three key daily EMA’s
Finally the chart which has all the action, the hourly;
- A small H&S breakdown (shoulder tgt already achieved!)
- Oversold indicators suggesting a short bounce???
- 5180/5200 supports
Yes it’s this 5180 near bouts that conservative bulls will be looking at from here, i.e. a break from 5250 means straight down to test the above mentioned supports. The trend is confusing and the only play we have is “buy the supports and sell into the resistances”! Means if we open weak or flat then one can go long near 5250 with a tight 20 pointer stop and trail the position upwards. Some intraday strength will happen if we trade above 5285/5305 zone, after that the decider will be once again the 5335/40 levels.
Posted by Tryin2Trade at 6:04 PM
Sunday, June 13, 2010
Wednesday, June 9, 2010
Tuesday, June 8, 2010
I am not able to update the blog frequently as I have my primary business (flowers) to take care of. Besides planning to join my kids on family vacation. My last post was about the inverse H&S and hinted will the volatility mess it up!!! It seems volatility is indeed messing things up maybe because on the daily we are trapped between the 200 DEMA (below) and the 20/50 DEMA combine (above).
Anyway below is the Nifty spot hourly chart, which now looks like a clear bearish H&S!!! Yeah, and this comes into play once we make a decisive break below the 4965/60 level with volumes.
From the above chart one can also see that we have broken down from a wedge, tested it with a pullback, found tough resi at the 200 periods MA and now formed the above mentioned bearish H&S. Any shorts initiated here can have conservative stops above the right shoulder and should be immediately trailed to breakeven (in case of any volatile down move). The wedge and the H&S, if it plays by the book can give a 200 pointer move to the downside!!!
Having said that “if it plays by the book” let me also reiterate nowadays we are having a good newsday and bad newsday, and sometimes it’s both the good and the bad newsdays…this is what is making trading difficult and a whole lot of churning is happening. If volatility makes you sick stay out!!!
If you are the patient types then trade Divergences (both hidden and regular), they don’t occur often, but when they do, they surely give some good trades!
To wrap up my favorite quote “TRADE WHAT YOU SEE AND NOT WHAT YOU THINK” and of course TRADE LESS TRADE SMART!!!
Posted by Tryin2Trade at 6:44 PM