EOD Update Nov 30 2010

La Belle Dam Sans Merci ----

Shorters trapped today . But today was not a short covering day .Today Bulls were really back in action owing to the positive GDP data . After the initial sell off NF stabilized and moved to clear major resistance of 5840 - 5860 -5880 and even moved higher. The momentum is clearly in favour of bulls .. I would term it a cautious optimism.The reason being while 5900 puts OI increased not much covering in 5900 calls -- Implies that still 5900 - 5925 NF is a decent resistance to cross.Only a Gap up can clear that resistance or  a fast rise setup.

For tomorrow 5837 - 5845 NF would provide a good support and any dip towards 5840 may be utilized for buying. 5925 NF is a resistance to be cleared above which we may move sharply to 5987 - 6041 level.For a short term Bulls are back with vengance so any dip should be used for buying. On the NF chart today closing makes a bullish engulfing candle which suggests upside.

EOD Update Nov 29 2010

A cautious up move ...

After a panic of  two weeks we can say that NF stabilized today . If I have to interpret then we are done with a short term bottom as of now. Today NF move slowly gaining strength above the resistance of 5801 and 5840 but the move halted at 5860.5860 NF is acting as a tough resistance as of Now.Also the EOD charts are not indicating any thing except that volatility is getting reduced.

For tomorrow the support comes at 5827 NF and resistance at 5860 NF. Tomorrow morning ORB would be very useful in deciding the trend as any side break out would give a good move.

EOD Update Nov 26 2010

There's always another sunrise !!!!!!!

A really bad month for me with just managing to recover my losses but no profit. Markets not favouring -- system crashed --- not able to update Almost all problems at a time.Well then there really lies the true spirit of man just to fight till he gets knock down or completely out.

A delighful month for bears simply the best. It reminds me of the last diwali. Last diwali too SBI made a new high then till expiry almost 400 odd points down. History has reapeated again this diwali. Not much to say you can get the idea by simply remembering the last diwali.

The dynamics of market has chaged drstically in the last 14 days.I was completely wrong in judging the market and I have paid the prize of it.Never underestimate the market just follow it and that is what i have learned the hard way.

Looking to the weekly charts we are nearing a bottom quite exhausted -- why i am stating exhausted because the kind of vertical fall expected is not happening instead there is immense buying happening at lower levels.Look at the EOD charts do you see any selling ?????? I leave it on you.The whole world is talking about now 3800 odd levels. Time to be cautious NS just managed to close above 5950 at 5951. Does the bell ring. It is just a game plan by the big players to trap the shorts the reason being if there are no shorts then who is going to buy. For the time being 5750 is the established bottom and look for buying for target of 6041.

For monday obvious resistance lies at 5801 NF and above it 5840 NF. The dynamics would change entirely above 5860 so dont short blindly as we are nearing the bottom and a decent upmove till 6041 NF is observed in the market.

Currenlty i am holding 5800 calls to be square at 6041. After 6041 NF i would decide on the future move of market whether to hold or not.

Cortsey : www. icharts.in

Sorry for the delay

I will be able to post only after sunday as some problems in my connection so
not able to place charts too.

EOD Update Nov 23 2010

An adrenaline filled day ... Today

Today in panic i squared all my positions just to see NF recover at the end.Owing to the War situation i went in panic and squared all positions.

But looking to today's pattern it is a range Bound movement between 5800 and 6000 NF.

A bullish engulfing candle spotted at the low of the day suggests if we cross and sustain above 5960 tomorrow it could be a bear squeeze and NF would definitely touch 6041 and 6141 Levels.

Alert

Owing to global uncertainity stay away form market till the dust settles.

All positions squared and neutral on market.

EOD Update Nov 22 2010

If we do not hope we would not know what is beyong our hopes.

Tollay missed todays action because of some social obligations.Today was a day dominatied entirely by buyers.After side ways move in the morning once NF crossed there earlier resistance of 5940 it was a cake walk above 6000 NF. Just NF defied all laws of gravity today.Shorters be aware was the clear message today. Why i am saying this because looking at the options OI today 6000 calls have made a comeback by decent covering and viceversa 6000 put has build up considerable OI today suggesting 6000 NF as the immediate support as of now.

For tomorrow 5987 NF would acts as the support and below it 5940 NF as major support where again buying can be done. 6041 is a minor resistance area and  above it straight way to 6085 NF level where major resistance may be faced Above 6085 straight way to 6141 NF where there may be a temporary halt for the time being.

I would suggest going long on dips as looking to todays action we might trade in broad trading range of 5800 NF to 6400 NF.I am not able to post the intraday charts so would post tomorrow morning.

EOD Update Nov 19 Nov 2010

A bend on the road is not the end unless we fail to turn around.

Need less to say that Friday was a panic day owing to china rate hike and  Indian politics . NF went below the major known support of 5930 level and panic was observed among the retail investors which led to some more panic in the market, The bottom is near I suppose around 5700 odd levels. Look at the chart 1 and watch the money flow index it has stabilized and poised to move up.This indicated that smart money is already buying the panic sentiments.If  long then please average your position and roll over to December as 6600 NF is the target measured after such a healthy correction.You might be thinking that why i am so bullish but till date the net FII and DII figures are not in selling and the volume before Diwali has not matched any volume even in this fall.

For Monday the resistance comes around 5940 above which a retest of 6141 NF the reference level. 6141 NF would act now as major resistance level where shorting can be done for  quick gains. As such below 5930 NF major supports comes only at 5400 - 5500 NF levels but still it is early to say that. Look for buying near the support region of 5840 - 5800 - 5750 for ultimate target of 6140  NF level and 6225 NF

Courtesy : www.icharts.in

My position as of now is holding 6100 Calls and also 6400 calls and bought 6000 calls too for target of 6141 - 6225 NF.Also would look for shorting opportunities near the resistance levels of 5940 -6005-6141 NF to recover part loses 

EOD Update Nov 18 2010

Was today an expiry day ???

Remarkable day NF falling on low volumes Buying emerging at supports and shooting up.The Support levels of 5950 NF was held after some panic.A 100 point gain both on short side and buy side. Really a Day for traders.Looking at the charts after the panic fall NF stabilized and moved up and volumes too were good on the up swing. Today's action shows a clear sign of reversal but more confirmation needed with a close above 6141 NF the reference level. Look at the Bullish candle with a long lower wick indicating buying pressure with volumes on the chart.

Yesterday i talked about decoupling from global markets and the same happened today.Will this continue ?For tomorrow we would see a gap up around 6075 - 6085 NF much above the resistance of 6047.. the part booking level for call and longs and above 6095 NF straight way to 6141 NF.SL for all longs continue to be 5900 NF on closing basis.

I am still holding 6100 and 6400 calls all to be squared at 6141 NF.

EOD Update Nov 16 2010

All movements are in waves ; in politics , in business , in the atmosphere , in spirit  ---  Rest with the descending wave & Mount with the ascending wave.

A great thought to share at this juncture of market . A stupendous show by bears before a holiday. Shorting or Long liquidation (pointed by our own Kumar at Just Nifty ).Why i say long liquidation because of the FII and DII figures. Then what took the market in so panic.In both case the Selling by FII was not that much that the market was in so much panic. I would term it as the nervousness owing to global sentiments and a holiday in Indian Market. Look at the charts Straight way form 6105 NF to 6000 NF accompanied by the highest volume of the day an then the whole day consolidating in very narrow range.I didn't expected any fall below 6075 NF but once broken NF just fell like pack of cards. Also as of now looking to the four volume bars looks like a balanced day NF shorting at higher level and covering at lower level but the lack of buying was missing.We are near a very crucial juncture form were two sides are possible so it is going to be a tug of war.Why saying because already the major support of 6040 NF is broken and we are near another major support of 5950-5935-5800 NF. If this levels don't support then a decent 15% to 20% correction would be seen in market.It may not happen now or never but chances can't be ignored.At present a bounce is in the offing.

Chart Explanation : The oval marks represent the shorts and then the profit booking . The rectangle shows buying . ( purely my opinion ). The white lines show the resistances.

For tomorrow a bounce is sure which may take NF to 6075 - 6141 . 6141 NF is the major reference level so NF has to test the level to check the strength of this down trend .All longs should be immediately liquidated at 6141 NF level and wait for clues from global market.The decoupling of  Indian Markets from rest of the World happened for almost 5 months and now we are imitating the Global trends. It may happen that since China is Curbing FII inflows the same would come in Indian Market and again we may decouple from the Global Markets

I would suggest going long as a contrary trend for a bounce till 6141 NF. At the max 5900 NF on closing basis should be the ideal SL for all longs and calls. Above 6141 NF with volumes 6225 is the immediate target.

My position as of now is 6100 calls and 6400 calls ( confident in 6100 calls but 6400 calls only a miracle can save) . I suggest to liquidate all longs and calls partly at 6075 and fully at 6141 Levels of NF.

Lastly Wishing you all   ---- EID MUBARAK .

EOD Update Nov 15 2010

We can Appreciate the Miracle of  Sunrise Only if we have waited for it.

Today was really a beautiful day much to the delight of traders. As expected we had our first target of 6141 NF met in the late hours.After the morning panic visible volumes accompanied with extremely oversold conditions were enough to decide the direction of the day. As expected we had a bounce to 6141 level and closed in the upper band of today's trading range.The momentum may continue tomorrow too in my opinion.A decent volume build up at 6075 NF and a good upmove till 6148 after crossing 6120 supports my opinion of NF moving upwards.

For tomorrow 6115 NF and 6075 NF would act as the supports and buying can be initiated for targets of 6196-6225 NF.Looking at the prize-volume behavior below 6075 NF chances are very very less. In case it happens then 6005 - 6037 NF would act as supports.

I would suggest only buying at support levels of 6005-6037 NF for the above mentioned targets and much more.

History Always Repeats

If History Repeats itself then why we have to learn it.

Last week I mentioned about bolinger bands and the possibility of touching the lower band and it happened too . Refer the link

Look at the weekly charts (courtesy icharts.in).The trend line from Sep Low has been violated accompanied by beautiful negative divergence. Though volume was not much in the fall compared to the volumes that happened  till Diwali Up Move.

If we go only by the prize-volume behavior then this is just a technical correction which may end at 6040 or 5935 Max  from where we started and move higher & If we go by the negative divergence then a straight correction to 5400.

I expect a very good bounce from 6040 or 5935 till 6225 in a very short time.

Courtsey  www.icharts.in

Note : Owing to the dynamic nature of  market the indicators taken for the purpose of  study too vary.The idea here is to take that indicator that can give the best probable direction of the market.But in every time frame prize-volume behavior will always have supremacy over the other we just need that eyes to identify it.

EOD Update Nov 12 2010

Man must be prepared for every thing in life as Nothing is durable

One of the highest weekly fall in NF since May 2010. Volume was less in NF and on the  contrary equities witnessed more volumes.In the morning NF was taking support at 6196 NF level but once broken it was a very fast journey southwards . I expected 6141 NF level since the Diwali high and we managed to reach that level and in panic it even touched 6077 NF. Almost all supports broken . Repeatedly i was emphasizing the 6141 NF level (Refer to last week post) as it was the reference level from where we had great up move till Diwali. Are we done with the lows or still some left ??.We Will discuss in the another post after this one. This is just and EOD Update. Would update the weekly chart after this one ( History Repeats )

Bullish Scenario

Look the EOD chart beautifully poised for and up-move till 6149 - 6196 - 6225 NF.Look at the volumes at EOD Three green candles accompanied by volume. Does the Bell Ring . Every low of the day is being utilized for buying by some big players .I have considered two criteria for this.

Firstly : Extremely oversold conditions and since the last 1.5 years oversold condition has managed to correct and scale up very soon unlike the overbought levels which tends to continue. 

Secondly : single day OI addition of almost 110% in 6100 calls (some body is definitely going to come to slaughter the 6100 call writers ruthlessly / same as the case with 6300 puts on Diwali). Remember we are in a secular Bull Run till 7200 odd levels in NF. 

I would term this as only a technical correction which is a healthy sign for NF and Market too.Also if 6225 NF holds then we can retest of 6347 - 6380 level.

Bearish Scenario

Owing to the two day fall in market if the major support of 6040 NF doesn't hold then 5935 - 5850 NF Region would be tested again . Below 5935 -5850 NF much deeper correction correction to 5400 NF ( very very remote chances).

For tomorrow 6141 is resistance level and above it very fast move towards 6195 - 6211 - 6225 NF would be seen. Down side looks limited owing to oversold conditions still if 6040 NF breaks then 5935 may be visited.

My position : Covered all shorts (taken at 6275 NF) at average of 6136 & 6400 calls naked and  accumulating 6100 call for target of 6225 NF

EOD Update Nov 11 2010

"Life never comes with guaranties and waranties it always comes with possibilities and opportunities"

At last the unexpected happened. As the saying goes yesterday was a possibility and today it turned out to be an opportunity. Yesterday mentioned that break on either side would give fierce moves . Today the same happened when NF got resisted at 6327 and broke the yesterday low of  6295 it was no looking back and NF continued its south-wards journey. Also the earlier support of 6245 too got broken. Bears would be definitely rejoicing. Volumes at the end session are confusing "Is it profit booking by Bears or Buying  by Bulls at supports".Tomorrow the picture may get more clear.

For tomorrow NF resistance comes at 6261 and above it it may be a cake walk till 6320 . On the other hand below 6243 NF 6179-6141 are visible targets.6300 Call/Put OI favor the bearish possibility as of now. Also 6200 calls are being written suggesting downside till 6179-6141.

My position as of now :  50% covered ( Shorts taken at 6275 NF ) and 6400 Calls open.

EOD Update Nov 10 2010

Better today should have been a trading holiday

I expected an up move today but owing to weak negative global clues the day turned out to be an inside day stuck in a very narrow range.One thing noticed that the low of 6295 made in the morning was held firmly.On the intra charts definitely there was a double bottom but the up move didn't culminate.Yesterday I talked about 6327 as the support but today NF got sold off form the same level twice.

For tomorrow too NF resistance comes around 6327 level and we may see sharp run up above it till 6380. On the other side below 6295 NF support comes around 6245 level where again buying may be initiated. Tomorrow morning ORB would give a direction to this clueless market.

Expect the unexpected tomorrow, as today was an inside day and any side break out would give fierce moves.

EOD Update Nov 9 2010

A traders delight today ..... +60 on downside and +60 on the upside.

Nifty

In the morning NF shooted up giving a false break out on the upper side.This time it was accompanied by volumes too but slowly and steadily dipped downwards just to check the supports and moved in a very narrow range and then managed to climb breaking the day high in the closing session.Thus we can conclude that there was a decent buying in the 6290-6296 region as in the last hour NF manged to break days high.

Tomorrow would be positive day and if every thing goes right then 6327 should act as support for the  whole day. I expect NF to touch 6380 - 6400 level form where shorting can be done.For tomorrow downside looks limited but if any how breaks 6267 NF then we may visit 6229 levels.

Currently i am short in NF at 6275 and hedged with 6400 double quantity calls.

You might be thinking that i am beting both on the short side as well as long side but stating in clear terms the state of the market is confused so have to take both sides till a clear direction emerges.

Bank Nifty

A stupendous show of strenght . SBI with Bad results too wasn't able to shake out BN. Volumes of the morning indicate buying pressure in BN as it even did'nt touch the Days low again and managed to break the days high.

Just posting the charts to explain prize-volume behaviour.

Reliance

At the lows of the day volume indicate buying pressure in Reliance.

Just posting the chart to explain prize-volume behaviour.

Nifty Futures

Bank Nifty Futures

Reliance Cash

Bird Eye View on Reliance

Reliance is showing decent volumes at the low of the day. Seems like delivery picking up.

Buying can be initiated with a small stop below today low.

Intraday Alert 9th Nov 2010

Chart shows volume based buying in the 6296 - 6290 Region.

Currently I am hedging my shorts taken at 6275 with double quantity of 6400 calls and would add another shorts at 6380 and book in 6400 Calls.

EOD Update Nov 8 2010

In simple words just confused state of market.

Look at the chart -- if we forget the morning candles then NF moved in a very narrow range ; what i call as the congestion Zone. Volumes too were low and didn't indicate any movement on either side. Also looking at the OI figures both 6300 puts and 6300 calls are being written . This indicates in decision both by the Bulls and Bears.One indication of bearishness is today formed a lower high and lower low.

For tomorrow too above 6340 NF may march towards 6380 ( Less possibility ) and Below today's low we may visit 6225 - 6140 NF.

I am still betting on the short side (Shorts taken at 6275) for target of 6140.

Note : I have taken 6300 Calls and Puts because the action was centered around this region

Some Beautiful Thoughts

 

Trading Chaos

It’s well known that the heart has to be largely regular or you die. But the brain has to be largely irregular; if not, you have epilepsy. This irregularity, chaos, leads to complex systems.It’s not all disorder. On the contrary, I would say chaos is what makes life and intelligence possible.The brain has been selected to become so unstable that the smallest effect can lead to the formation of Order.—Ilya Prigogine

Chaos can be termed as a higher form of Order.I would not much go in the intricacies as it is more scientific learning . I have tried to put an implied form of chaotic behavior in trading by the below example.

Take the case of above example if we try to throw a ball from point C definitely it is going to roll on the curve and eventually settle at point B or D as this is the balancing level.But how far the ball will reach i.e point A or point C depends on the force exerted on the Ball.

In many cases it would happen that the Ball after reaching A would tend to come at B and then again move towards Point A or Point C depending on the force exerted. Also note that if the force exerted is more than we may cross the point A and thus complete a full circle and reach point C.

Imagine the Ball as NF. Every Day we have with us a Pivot (B or D) the opening C and A either support or Resistance.What we have to look at is the volumes (force) at the equilibrium point B or D. Depending on the volumes we would then initiate a trade at equilibrium point B or D. If we reach at point A or C then we reverse our position or book out as the ball (NF) will again try to come to equilibrium point B or D.The cycle never completes.Only we have to identify the equilibrium points and volumes at that particular point. Remember that the nature of market is dynamic and equilibrium points changes every hour, day with the kind of  force(volume) exerted.

Many permutations and combination can be worked out . I leave on you to come up with more on this theory.

Will come shortly with left brain and right brain and how it affects trading.

We know the direction --- Still are direction less

"Follow the Vague and Intangible and it will become Definite and Tangible"

  Anonymous

Here I have taken 6 months chart of NS for my study (courtesy icharts.in).From June it is observed that when ever the Bo-linger Bands have touched the upper end they have started correcting to touch the lower line of the band.As of now it seems that NS is in a hurry to touch the 6400 mark or even cross it and then correct downwards.Volumes were all time high when we crossed the 6225 Spot Thursday followed by a good run up till Diwali Muhurat Trading.If we go by the prize-volume behavior then it is a breakout on the upper side.

I would remain on the short side as NF is overbought and also after huge run up ,3 unfilled gaps Nifty needs a cooling. If we call this an up trending market then a usual behavior of nifty is that it always comes to check the support to verify the strength of the market.

On the upside we would be on a no mans land "Charts don't make the market Market makes it" . This time it has proved right till date especially in case of Bank Nifty.

My opinion is Nifty Spot correcting to 6140 before any further up move & am already short since 6275 and would add more at 6380.(Reason being with almost 170% OI in 6300 puts some one is surely going to slaughter the writers of the put -- last month i.e in October this was the case with 6200 put when NF touched the 6317 mark)

Source : www.icharts.in

EOD Update Nov 4 2010

Again a Gap Up and Nf crossing all the resistance swiflty.

Today NF was going just one way and that is up up up up ...... Tomorrow Diwali may see a new high around 6317 - 6350 -6380. The FED decision has cheered up the markets worldwide.The only thing that is paining is "FED is going to average this stimulus over 5-6 years" Read Somewhere.The last hour candle today also suggest buying interest seems we are going to open higher tomorrow.

Nothing much to add as the euphoria continues.

I have shorted NF partly at 6275 and would add other at 6380 if it comes.

Again Wishing you All Happy Diwali and Prosperous New Year.

HAPPY DIWALI AND A NEW YEAR

WHEN THE SOUNDS OF CRACKER FAINT AND THE CLOUDS OF SMOKES DISAPPEAR

ALL THAT REMAINS 

ARE MEMORIES OF HAPPY DIWALI

WISHING YOU ALL

A HAPPY DIWALI

&

A PROSPEROUS NEW YEAR

Intraday Update 4 Nov

Look at the selling a the high of the day accompanied by volume.

I would bet on the short side as of now.

Alert Intraday Nov 4

The Diwali Euphoria continues .... all Resistance crossed swiftly Next visible target is

6317 - 6353 - 6380.

Shorts can be created partly at this level and partly at 6380 level.

EOD Update Nov 3 2010

Again A Gap Up ... Come Home Diwali this year

One thing noted is that NF is crossing every resistance in a Gap up and just manages to stay in the upper range entire day . Today also NF moved in a very narrow range of 6188 - 6205 . Nervousness was Visible . I expected a decent profit booking today ahead of FED Meet and NF overbought but didn't happen.Volumes entire day were not encouraging seems the retailers are nervous . Decent volume was seen only at the end . This again shows some buying interest. Profit booking on the individual end was a wise decision after 3 days of  rally. Much depends on the FED decision tonight .

For tomorrow 6188 - 6176 would act as support and on the upside 6224 - 6234 - 6248 may be visited and if all crossed the we can march towards 6317.

Again Saying the entire market for tomorrow depends on the fed decision tonight.

Aggresive stand if taken then if tomorrow if it is a Gap Up then shorts can be created agressively for quick gains ( Just for Die Hard Traders -- Those who dont have apetite may avoid it).

EOD Update Nov 2 2010

A Frustrating Day ..... Could not resolve much 

Today action was quite a frustrating one for day traders. Side ways move The action was almost locked between NF 6144 - 6167 . Some whipsaws were there but could not resolve much. This is what happens when volumes are low. We can term it as the Blood of the Market .Even the RBI meet failed to cheer up the volumes.Can we term it as "Chaos" before the great Fed Meet.( Will come shortly with Trading Chaos).NF went below the reference line of 6141 and again managed to climb back just to face resistance two time around the 6174-6170 region. No signs of profit booking or shorts in the market.

Tomorrow's action would be an action packed one to the delight of traders Nervous Bulls may book profit before the Fed Decision .With OB reading NF may correct to 6110 - 6080 - 6067. Resistance still comes at 6170-6175 region a break above it would lead to 6197 - 6224 and much higher.

As of Now the bias is still Bullish with upper targets of 6197- 6224.

Note : In may brokerages firm trades in Reliance have crossed the Ban limit Some thing fishy is cooking in it. Reliance is just shaking the weaker hands out of the market and then would resume its up move till 1140-1160.

Intraday Update Nov 2 2010

Till Morning Open High of NF was same it was a good break out though volumes were low.

Reference line too tested at 6141.

NF is a buy here for a target of 6197 - 6234.

The parameter considered is the break of today OPEN HIGH.

EOD Update Nov 1 2010

Wow .... A huge gap up and the Journey continued ... Looks like bulls want to move up ...

But nervous

Looking at today intraday chart after huge Gap up Nifty did manage to touch a major resistance

level . There was lack of follow up buying . May be because of the nervousness of tomorrow

Fed Meeting . At the High of the day there was a profit booking on low volumes and Nifty did

manage to retrace to 6141. Not once twice the level of 6141 was tested where at the end a

decent buying interest was seen ( See the volume at 3.00 -3.20 ).( Look at the ovals market in red ).

For tomorrow 6141 becomes the immediate reference level below which we may visit

6116-6126 region where buying interest may be seen . Below 6110 Straight way Nifty may

try to fill the gap or touch 6080-6067-6043. Watch for volumes at the mentioned levels.

Above today's high a new story may take place till 6197-6224.

 

 

Intraday Update Nov 1 2010

Look at the volumes in the 6126-6136 region and then 6148 - 6156 region . Till now a higher high and a higher low after a gap up.The retracement form after noon high is very mild. Seems Bulls are in full control . Every small retracement has been bought till now .Also volumes are on the up move with nifty

A move below 6110 NF may immediate give 30-40 points till 6080 -6067 if it comes..

Till then its a Buy. At present all scenarios point to 6193 - 6234 level by today or tomorrow.