Funny yesterday we took solace in opening of the Asian bourses and firmed up and today; the same Asian cues at the opening got our goat, and later Europe also didn’t help much either. Like I said yesterday, that ahead of the Inflation data, not many people are adventurous enough. The 5 minute chart below is a simple picture of a down trend with the bulls not even in strong enough to muster the courage to touch upon the falling 20 period MA for most part of the day. A lengthy positive divergence in MACD; but failed due to lack of confirmation from Price action.
The hourly chart has broken the pivot low. Its heading for 4250 our strong point and below that 4220 which is the 50% retracement level of the swing as marked in the chart. Any close below this will lead us to 4150 and probably reverse our intermediate trend. Speaking of trends I personally feel we are in the following position right now; Long term: DOWN, Intermediate term: Sideways a.k.a CONFUSED, and Short term: DOWN. We have had the 20 and 200 period EMA cross above (another ominous sign); Nifty needs to reclaim 4315 and 4370 as quickly as possible to assuage the grief of the Bulls!
Finally the daily chart below, a picture perfect with the recent red bar stuck between the jaws; the 20 and 50 period MA’s and a nice cradle support below. The ADX structure is a bit confusing, we have the –DI and the +DI going for the KISS but the ADX is showing a reading below 20, does this mean this kiss is lacking the Passion and the Intensity??? RIL the King now has to SING(H) (it has formed a nice pattern suggesting a pullback) and Nifty just can’t dance without RIL otherwise 4150 is the line of control for the BEARS and the BULLS. I am out of the market; cant make up my mind to initiate a trade so will wait for a clear trend to emerge. If you are long you should have your strict stops in place and if you are short then don’t let yourself become Comfortably Numb (btw a terrific song from Pink Floyd). If you’re on the sidelines and feeling sad at missing the trades, I think you let the feeling pass and enjoy a good night’s sleep (a commodity which is always in short supply for a trader!)
"Pain is inevitable, suffering is optional"
Origin Unknown
2 comments:
Hey Manoj excellent intrpetation even after a long holiday, i liked the way u have explained the whole picture and most imp thing is it is very convincing also..however am not here to praise ur work but honestly the words which u have used in the explanation is very good and keep the good work on...
Am pretty new the trading i work for GE and trade only in nifty and nifty options during the day times..n8 as usual work...do u have a yahoo id so that i can add u thr...
tk cr all the best...
Abhilash
abhilash_prakash@yahoo.com
Abhilash...Hi
Glad u liked the blog. Its just an attempt to learn TA myself.Hoping one day I will be a good trader!Any help if I am able to render you are always welcome to ask.
Regards
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