Nifty View: Update for 4th Jan 2019

Near Term Trend:  ↓ (Down)

Market update: Today, before the market opened, there was some hope among bulls that Nifty will be able to defend 10750-10800 levels ( Especially after overnight recovery in US stocks), however it was not to be. Nifty opened at par and kept on drifting down throughout the day and closed at 10670 level ( down 120 points). Its second consecutive day for Nifty where it has given 100+ point fall and in just 2 trading days Nifty has fallen from 10915 to 10670.

Even though the fall of last 2 days is sharp and has taken most bulls by surprise, regular reader of our blog and subscribers wont be surprised to see this as this is what we have been expecting/predicting since last few days.

Tuesday, when Nifty gave a closing at 10915, there was a small chance of market extending its gains and this corrective move extending on the upside for few more days(I had mentioned the same in my previous post  'Update for 2nd Jan' as well), however Bulls squandered away the opportunity or you may say that Bear came back with a vengeance and showed who is the boss right now.

Now the zone between 10640-10710 is extremely critical and has some solid support. It will be interesting to see if Bulls try to defend this zone. Silver lining for them is that this zone was not taken out today and market closed bang in the middle.

Technically speaking, we are still holding our old view that which says that G leg of diametric got over at 10922 and a new leg down has started now.(you may refer to my older posts for the wave counts). However we still need further evidence ( more weakness from here)  to confirm the same though it doesn't mean that Nifty can not rise from here. Anything can happen in markets and if Nifty throw any surprises at us then we should be prepared for same. If required we will adjust our wave counts and charts ( like the way we have been doing in past). 

Imp Thing: This is not the time to be adventurous, going forward the volatility might increase big time so keep the traded qty in check. I keep reiterating not to leverage or over trade in my daily whatsapp updates and blog posts. Going forward if there is a sharp rise in volatility (and the chances are it will) then it wont be a good situation for someone with a weak heart and leveraged trading position. Keep open position as light as possible and if you decide to book partial profits in between because you are not sure about carrying  shorts then by all means please do that. There is nothing wrong in it. Don't be greedy, markets can turn choppy anytime now throwing you totally offguard.

Trading recommendations:  Same as yesterday, I have been telling those holding longs to exit since Nifty hit 10900 and now we are at sub 10700 levels. If some one doesn't want to go short its fine, but don't hold any longs for time being.
 
We are holding shorts we initiated earlier @10840 and @10688 ( previous shorts initiated @ 10858 levels were covered @ 10535 earlier) and have been updating our subscribers through regular whats app updates as to what to expects and what needs to be done. If you wish to join us on whatsapp then please follow below link, its just a promotional offer and will soon be stopped.

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Nifty Trade Update - 3rd Jan 2019

Update 03:00 PM:  Nifty CMP  10680: Please continue holding shorts. For now trade is going more or less as per expectations. Will update if anything needs to be done ( someone with less risk appetite may book partial profits)



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Technical learnings: Thrust out of a Triangle

Limiting and Non limiting Triangles

 Now that we have covered most of the common forming triangles in my previous posts, the next question is how do we predict Market movement ( or set the target) once the Triangle is complete? To answer this question we need to carefully observe the triangle and try to find out if the Triangle is completing as " Limiting triangle" or "Non limiting triangle". Yes most triangle can further be categorized as Limiting or Non limiting. Thrust or move out of a triangle ( or target) is totally dependent on this.

To identify if the triangle in question is Limiting or non limiting one should look at the 'Apex Point' ( Apex Point is where both A-C and B-D line of the triangle meets). If the apex point is very near to E leg (meaning there is congestion near apex point) then its a non limiting triangle and if there is no congestion and apex point is far from end point ( i.e. E leg) then triangle is Limiting triangle

To make things more clear, lets have a look at below example



Limiting and Non limiting Triangles

Limiting Triangles:

• Like mentioned above, if the Apex point is far away ( general rule is total distance between E leg and Apex point should not be less than 20% of entire triangle). 
• Once the E leg is over you may take a trading position
• Trading target will be 75% to 125% of largest leg of the triangle

Non Limiting Triangle:

• Like mentioned above, in such triangles the apex point is very near to end point of triangle ( too much congestion near Apex point)
• Once the E leg is over, price action breaks in opposite direction
• But as the name suggests non limiting triangle has no specific range or target area and the thrust area out of it is 'non limited'
• Non Limiting triangles generally gives false break out and trend resumes in main direction pretty soon. In other words the movement which follows non limiting triangle may not last for long

Nifty View: Update for 3rd Jan 2019

Near Term Trend:  ↓ (Down)

Market update: After yesterdays sensation pull up in last hour, Nifty opened below 10900 again and traded weak whole day. It even touched sub 10750 levels momentarily before recouping some of the losses and closed at 10790 levels (down 120 points).

We have been saying for long that 10900 -10920 seems like the threshold for Nifty on the upside and that market trend still remained down even after the 100+ point recovery yesterday in late trade. I had also mentioned in my yesterdays post that "if market has to reverse then it has to reverse now there is not much time remaining" and we had a down move of 120 points today itself which proves that our chart reading and wave counts are more or less in right direction and for now we will stick to that.


Technically speaking, seems market has completed the G leg yesterday. It took exactly 4 days like the F leg now lets see if we can see a faster retracement of same in same or lesser time (which translates to Nifty breaking 10530 levels in next 3 days). However lets not think that far ahead and we should be taking each day as it comes. Today our immediate target was a close below 10810 and we achieved that as market finally closed at 10792 levels ( there were few attempts by bulls in the late trade to take Nifty above 10810 but those were not successful).

We had initiated a short trade yesterday (in just half qty) but exited later with a small loss. However today again we entered shorts around 10840 (full trade) and still carrying the same. 

Now slightly off topic, regarding yesterdays trade, many are writing me saying that we should have continued with our shorts yesterday. let me just reiterate, I never recommend carrying a trade if I am not convinced by the market movement or it is not moving as per my expectations. I am not afraid of exiting and booking small losses (and so shouldn't you). I am not a day traders and my aim is not to take 30-40 points. As a positional trader my aim is to catch the broader trend of the market and then ride along with it and if I lose 50-60 point in the process then its absolutely ok with me (in fact this is something I will  gladly accept any day). I understand its not easy and need lots of patience and a cool head so if you want to make money in stock markets then please start being mentally tough, keep a cool calm head always and don't worry about taking small losses. Waiting game in stock market can be dangerous when you know you are wrong then u have to exit ( no exception to this rule) there is no point in waiting because if market catches you on the wrong foot then it will wipe 100% of your capital in no time.

Overall  40-50% of my trades are wrong and will always be wrong, but my  profits are 50-100% time bigger  than my losses. Meaning my wrong trades will cost me 100 points but my right trades will give me 150-200 points. So in long run I will always be in profits (even if I am wrong half of the times). Cut your losses short and let your profits run. If  someone is expecting "100% sure shot calls each time" then I am definitely not the right person. 

Trading recommendation:  I have been advising exit from long position since last few days and still say the same. This is not a market to carry long, exit longs if you are still carrying. As far as our position we are concerned, we entered shorts today (like mentioned above) @10840 and still carrying the same. Need to observe market movement for next 2-3 days to decide our future course of action.

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Nifty Trade Update - 2nd Jan 2019

Update 12:35 PM:  Nifty CMP  10840 Sell

'Sell' is active 2 parts @ 10840.  we feel markets may begin down move from these levels.

Update 01:47 PM: Nifty 10755 : Hold positions , nothing to be done as of now. Nifty likely to be under some selling pressure for some time. Need to observe trading for next 2-3 days to plan our next move.

Update 03:12 PM: Nifty 10795: Hold position for tomorrow. Nifty has recovered 50 points from day low but that doesn't change our stand.

Overall Nifty has closed below yesterdays  low which is a encouraging sign for bears. Having said this, we need further signals from Nifty to confirm if its indeed a start of new down trend
 

Nifty View: Update for 2nd Jan 2019

Near Term Trend:  ↓ (Down)

Market update: Nifty opened 20 points at 10880 levels but quickly dropped to 10830 levels and kept grinding there for major part of day. It kept on trading weak and even touched a day low of 10805 but everything changed during last hour. There was a sharp upmove and Nifty rose nearly 100+ points from day low and gave a closing above 10900.Overall it was a low volume day with majority of world markets closed.

Up move in last one hour was indeed impressive and a close above 10900 does suggest that markets may be are not ready to fall down immediately in near term. However its too early to conclude that the down move is done with and Nifty is in bullish zone. Overall Nifty remains in a bearish trend and theres just a possibility now that this corrective move might extend ( if that happens we might see higher levels on Nifty).

The fall from 10980 to 10535 had taken 4 trading days and now this pullback from 10535 to 10916 (today) has also consumed 4 days but it has failed to post new highs. If this was indeed a bullish move then Nifty should have gone above 10980 by now. Nifty can still rise from here no doubt about that but even then it will remain a corrective move only.

If the down move has to start then it should start soon (there is not much time remaining now), otherwise there is a possibility that this corrective move will extend( both price wise and time wise). Technically speaking, the F leg of diametric lasted for 4 days and today G leg has also consumed 4 days so if it doesn't star falling in next 1-2 days then there is a probability of an extended G leg or Nifty starting a second corrective.

Strength above 10920 tomorrow will be positive for market and on the other hand break of 10840 on the downside will be negative.


Trading Recommendations: We continue to hold our existing shorts and had even initiated fresh shorts (light qty) today at 10823 but exited later in the day around 10885 levels. We need to see further strength in market above 10920 levels to change our near term perspective.

Happy Trading and a Very Happy New Year to Everyone!
 

Nifty Trade Update - 1st Jan 2019

Update 12:50 PM:  Nifty CMP  10823: Sell 1 part ( 50%). Will sell balance before day close if required

Update: 1:05PM: Nifty is lacking any momentum on the downside, we might cover our todays short if we don't see any momentum building before day end.

Update 2.45PM : Shorts exited @10885.Trade not going as per expectations.

There was no momentum on the downside and we had initiated shorts ltd qty in anticipation of downward momentum picking up in the later half (just one part-50% of qty)  however a sharp upmove in the end forced us to close our shorts.