Poor Nifty “Lows to lows, dust to dust if inflation doesn’t get her Left must”. This is what happened today! The government decided to bell the cat and hike the much needed oil prices. Tough choice in an election year, with their coalition partner (THE LEFT) denouncing the hike and announcing week long strikes (these are nothing but paid holidays!) things aint going to be easy. You see the market doesn’t like uncertainty and most important it doesn’t like government meddling too much. Now moving on to today’s action; Nifty opened firm and was list less till about 12 p.m. when that all important news announcement came. It looked the market had already discounted this news of price hike (it was just waiting to see what percentage the hike would be). There was a sharp spike and then news of Left (usual blah blah!!!) all over the channels. Technically we retraced and failed to claim the highs. The small little M you see on your 5 minute chart did the initial damage and after that it was domino effect. The 4625 which we had so assiduously protected yesterday also went for a song. This is a place where the system now has built many shorts (in fact these are new aka weak shorts). Any positive trigger will make these shorts scurrying for cover, which in short will be a pull back rally. Another important observation is that our man ADX seems to have woken up and stealthily moving up. For now this signals the strength of this down move is getting stronger.
Below is the chart of Reliance (courtesy Shiree Mamgain); this shows the 2B set up from trader vic’s book I had earlier posted in my blog titled Little Trend Line Trick. See how this simple set up gave a very good trade!!!
"Experience is what you get when you don't get what you want."
Dan Stanford
Hmmm that’s why I was wondering what I was getting when I wasn’t getting money in trading; EXPERIENCE!!!!
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