Update 2.45 PM: Nifty trading at 10760 levels. We might enter into a trading position around 3.15 so be prepared
Update 3.15PM: No trade. Opportunity didn't materialize.
Update 3.15PM: No trade. Opportunity didn't materialize.
Thursday, December 13, 2018
Wednesday, December 12, 2018
Nifty View: Update for 13th Dec 2018
Market Update: Big day today for Nifty, it traded strong through out the day (aided with short covering) and closed around 10740 levels ( up 190 points). So what can we expect going forward after last 5-7 days of wild swings and gap down/gap ups? For starters let me make it clear that these wild swings are just a way or method by which market get rid of 'weak hands' or 'speculators' or 'undecided traders' who simply trade basis their gut feeling or the news flow. Usually such moves are seen just before when markets are about to give a trending move in either direction ( A cleaning act is required before such a move can take place).
Trend going forward remains indecisive, the bullish scenario I was holding for Nifty was changed when it broke below 10650 but even then I was not bearish and still even after a rally of almost 400 points in last two days I have not turned bullish. Market made one important high today ( 10750). This entire range of 10650-10750 is extremely critical, if nifty can consistently trade above 10750 (todays high) then we can expect the rally to continue and I might turn bullish again. However if this not broken then we can expect a retesting of 10300 levels ( even 10K below that) pretty soon. So sit tight market is going to move big but to ride that movement you need to be patient.
As a smart trader one should not try to trade these wild moves its almost impossible to trade Nifty when you have 100-150 points in either direction so its always better to sit out and wait for market to remove the froth ( shaking up is required to generate and remove froth). Like I said in my previous posts too, the broader trend will remain in one direction these swings will come and go. One should not give too much importance to them and definitely shouldn't try to trade them.
I have not been able to post my wave counts yet ( as it needs some more validation) but will do so real soon.
Trading recommendations: No open position and I don't recommend getting into one just yet. Movement we are seeing could be due to unwinding and short covering by speculators. But we should be getting a trading opportunity pretty soon ( whenever there is one, will try to update the same live here).
Trend going forward remains indecisive, the bullish scenario I was holding for Nifty was changed when it broke below 10650 but even then I was not bearish and still even after a rally of almost 400 points in last two days I have not turned bullish. Market made one important high today ( 10750). This entire range of 10650-10750 is extremely critical, if nifty can consistently trade above 10750 (todays high) then we can expect the rally to continue and I might turn bullish again. However if this not broken then we can expect a retesting of 10300 levels ( even 10K below that) pretty soon. So sit tight market is going to move big but to ride that movement you need to be patient.
As a smart trader one should not try to trade these wild moves its almost impossible to trade Nifty when you have 100-150 points in either direction so its always better to sit out and wait for market to remove the froth ( shaking up is required to generate and remove froth). Like I said in my previous posts too, the broader trend will remain in one direction these swings will come and go. One should not give too much importance to them and definitely shouldn't try to trade them.
I have not been able to post my wave counts yet ( as it needs some more validation) but will do so real soon.
Trading recommendations: No open position and I don't recommend getting into one just yet. Movement we are seeing could be due to unwinding and short covering by speculators. But we should be getting a trading opportunity pretty soon ( whenever there is one, will try to update the same live here).
Tuesday, December 11, 2018
Nifty View: Update for 12th Dec 2018
Market Update: Nifty opened with a huge gap but recovered smartly to end the day up around 70 points at 10549 even though the news flow was all negative. Today was a classic example of age old rule of "buy on rumor and sell on news" (or vice versa). Nifty saw a recovery of more than 200 points from day low once the 'rumor' of BJP losing became 'news'.
It was a 4th consecutive gap down in last 6 days and eventually turned to be the "exhaustion gap" I spoke about in my previous post. I had mentioned yesterday that index usually turns after posting 2-3 gaps down and the next gap down could turn out to be an exhaustion gap meaning it gets retraced fully ( below is the excerpt of my post) and this is exactly what we witnessed today.
To understand it much better please see the below chart ( hourly chart). We had 3 gap downs in a row which Nifty was unable to recover from but today it was 4th gap down and nifty recovered it on same day itself. Idea here is not to boast but to educate readers about few basic technical parameters. One should not get carried away when gap downs/ups are taking place consecutively. It can be a good trading opportunity if you are able to identify the pattern
It was a 4th consecutive gap down in last 6 days and eventually turned to be the "exhaustion gap" I spoke about in my previous post. I had mentioned yesterday that index usually turns after posting 2-3 gaps down and the next gap down could turn out to be an exhaustion gap meaning it gets retraced fully ( below is the excerpt of my post) and this is exactly what we witnessed today.
To understand it much better please see the below chart ( hourly chart). We had 3 gap downs in a row which Nifty was unable to recover from but today it was 4th gap down and nifty recovered it on same day itself. Idea here is not to boast but to educate readers about few basic technical parameters. One should not get carried away when gap downs/ups are taking place consecutively. It can be a good trading opportunity if you are able to identify the pattern
Now when the election results out ( which are more or less as per mkt expectations), Nifty is happy to put the event behind and move on from here. Todays rally is basically a sigh of relief from Nifty. Market is range bound for now and hopefully in a few days the real trend should emerge. For now I am neither in Bull camp nor in Bear camp. Market is choppy and entering into a trading position at this stage will require a big stop loss so recommend waiting for few more days. As a trader we do not have to trade daily but keep observing markets all the time and as soon as the risk reward ratio is in your favor you should jump in. Lot of short position were entered today in the first half and then we had some short covering+profit booking by speculators which might continue for next few more days.
Trading recommendation/Trade update: No open position right now and I don't recommend going long/short at this stage. Market is being choppy and the big swings might cause you to get trapped or thrown out in no time. Happy Trading to you.
Monday, December 10, 2018
Nifty View: Update for 11th Dec 2018
Market Update: Nifty had another bad day and crashed below 10500 levels and ended up closing almost 200 points down. Todays fall was significant as it broke below the previous low of 10490 however it took Nifty 5 days to do that ( the previous rally from 10490 to 10950 had taken 5 days too). If you remember I had mentioned in my previous post that Nifty needs to break below 10500 in 4 days to signal a start of fresh downmove however Nifty refused to go down on Friday and gave a huge gapdown today. Break below 10490 in 5 days ( equal time) is counted as a negative too however the negative/downside impact of the same may or may not be that severe. Further on the hourly charts, the fall looks slow.
Thursday market was oversold on short term charts and I had said further fall from here looks difficult. And on Friday (inspite of a 100 point rally), I had mentioned that downside risk has increased recently and Nifty might slide down below 10600 again. Bullish scenario has changed now and I am not in a hurry to long anytime soon. Please note that momentum on the downside is increasing and even after a 200 point fall nifty is not oversold today.
Technically speaking this is the 3rd consecutive gap down we have seen in last 5 days which is unique and usually after 2-3 such gapdowns Index turns and the next gapdown becomes what you call an "exhaustion gap". Meaning if we see another gap down then its likely to get retraced fully. We still have some +ve divergence on hourly charts with RSI and couple more indicators are still in positive zone but its definitely not in buy mode and don't recommend buying at this stage. There are contradictory signals in Nifty present so waiting it out for few days is the best strategy. Presently the election/exit poll result is ruling the market sentiments and this could cause few more wild swings in near term. Further weakness from these levels would suggest that Nifty is likely retest 10K levels however it might just give a sharp pull back once again before it decides to do so. I was bullish at 10600 and even when Nifty was at 10900 but have been proven wrong (but no significant loss suffered in trading as our entry point was low) and things changed once market broke below 10650 levels. Now we need to observe how market is behaving in next 2-3 trading sessions before taking our next trading call. As of now risk reward ratio is not in favour of trading (buy side as well as sell side).
Trading Recommendations: Our last trade ( buy at 10650 was exited at 10630) was closed on Thursday and like I mentioned above, we need to observe how market is behaving in next 2-3 days before taking next trading call. For now I don't recommend going long or short at this stage as the wild swings in market can throw you out in no time.
Thursday market was oversold on short term charts and I had said further fall from here looks difficult. And on Friday (inspite of a 100 point rally), I had mentioned that downside risk has increased recently and Nifty might slide down below 10600 again. Bullish scenario has changed now and I am not in a hurry to long anytime soon. Please note that momentum on the downside is increasing and even after a 200 point fall nifty is not oversold today.
Technically speaking this is the 3rd consecutive gap down we have seen in last 5 days which is unique and usually after 2-3 such gapdowns Index turns and the next gapdown becomes what you call an "exhaustion gap". Meaning if we see another gap down then its likely to get retraced fully. We still have some +ve divergence on hourly charts with RSI and couple more indicators are still in positive zone but its definitely not in buy mode and don't recommend buying at this stage. There are contradictory signals in Nifty present so waiting it out for few days is the best strategy. Presently the election/exit poll result is ruling the market sentiments and this could cause few more wild swings in near term. Further weakness from these levels would suggest that Nifty is likely retest 10K levels however it might just give a sharp pull back once again before it decides to do so. I was bullish at 10600 and even when Nifty was at 10900 but have been proven wrong (but no significant loss suffered in trading as our entry point was low) and things changed once market broke below 10650 levels. Now we need to observe how market is behaving in next 2-3 trading sessions before taking our next trading call. As of now risk reward ratio is not in favour of trading (buy side as well as sell side).
Trading Recommendations: Our last trade ( buy at 10650 was exited at 10630) was closed on Thursday and like I mentioned above, we need to observe how market is behaving in next 2-3 days before taking next trading call. For now I don't recommend going long or short at this stage as the wild swings in market can throw you out in no time.
Friday, December 7, 2018
Nifty View: Update for 10th Dec 2018
Market Update: Nifty saw a sharp upmove today and closed around 90 points up around 10690 levels. I had mentioned yesterday that even though the Nifty is down its definitely not out. Bears may have been able to pull the markets down in last 2-3 days but overall the market remained in the bullish trend. Nifty was oversold yesterday and even the RSI gave a positive divergence so there was not much scope for Nifty to move down in short term. Bears had to take Nifty down below 10500 today to signal a fresh downmove but it was always a difficult task
Having said that now the question is whether Nifty is out of woods? We cant say that with surety yet. Todays bounce back was more on technical parameters. it was a bounce back from oversold territory. If nifty can build on the gains tomorrow and cross 10750-10800 levels then probably yes we can say that Nifty has resumed its upmove but till that time there is always a risk of testing 10600 levels again. especially since the election results are round the corner and Nifty can be volatile for next 1-2 days. I am hopeful that soon the real trend will emerge and we should be able to take a trading call. For now the fall from 10930 levels to 10600 does look like a corrective fall (inspite of a vicious 174 points fall yesterday). I still believe Nifty is in bullish phase and unless proven otherwise I will continue to believe so. That's what I mentioned yesterday ( todays rally is a testimony to that) and even today I will stick to that. Reason we are not taking a trading call right now or we exited from our longs is that risk on the downside has increased a little bit. There is always a risk when you take a trading call in market but once the risk reward ratio is not in your favour then you should always sit out and that's how you respect markets.
As per my wave count the move from 10930 to 10600 its still a corrective move which means a move on the upside is pending. But probably the corrective move is not yet finished so we can see another leg down. On the other hand if the rally continues that would mean corrective move is over and the fall yesterday was a bear trap ( will publish charts soon).
Lots of my friends and followers are asking me why I am not bearish even though Dow is falling 800 points daily and when election results ( which BJP is expected to lose) are around the corner. My answer is simple, Nifty will do what it wants to do irrespective of what Dow or election result does. For short term we might see some swings here n there but overall the tone of market will remain same and as a swing trader we have to stay with broader trend. Short term swing of 100-150 points should not bother us.
Trading recommendation: We have no position right now and waiting for next trading call. I do not recommend any long or short at current levels. Markets could turn volatile and you may find yourself on the wrong side in no time. Overall trend remains bullish just wait for risk reward ratio to be in your favour before you act even if it means entering a bit late and losing 100-150 points . Enjoy your weekend.
Thursday, December 6, 2018
Nifty View: Update for 7th Dec 2018
Market Update: Nifty was totally in Bear grip today and momentum on the downside (which was missing yesterday) was clearly visible. Frankly speaking todays fall has come as a surprise to me as I wasn't expecting Nifty to go below 10750 and finally 10650 levels. this zone was a major resistance area for Nifty and it took more than 3 weeks for Nifty to cross this hurdle and once this was crossed I expected it to hold. But market always surprises and we should always be ready for all probabilities. So what does todays fall indicate? Does this mark the beginning of a new Bear trend? Probably no. Though Bears have surprised bulls with their power today, the overall structure still remains bullish. let me explain.
It took Nifty 5 days to touch 10930 from 10500 levels and till the time Nifty breaks 10500 in faster time the bullish trend stays (as per Neo wave, for new trend to begin the last move should be retraced in faster time). Today was the third day of fall from 10900 levels. So if Nifty breaks 10500 levels tomorrow then we can say that Nifty has started a new leg downwards.
On daily chart Nifty is still making higher highs and higher lows which confirms that market is still in bullish mode. Fall stretching beyond here will definitely mean that things are changing. Also, on daily chart as well as hourly chart clear divergence is visible between RSI and Nifty and Nifty is oversold on short term charts. So it will be very tough for Bears to carry on with the same momentum from here.
So even though I exited our longs today at 10630 ( bought at 10650) I am still not in bear camp. Need to observe market behavior for next 1-2 days to take my next trading call. Todays fall has definitely changed and altered few wave counts I was assuming ( will try to post an updated wave count tomorrow).
So to summarize, Nifty is down but not out ( not today atleast). As a trader once you are with trend don't change your stand till you have conclusive proof. At the same a bigger mistake would be to keep sticking to your stance even when market has shown you otherwise. So for now we will stick to your original stand but will not hesitate to change once market start telling us differently.
Trading recommendation: Longs were exited today @ 10630 (bought at 10650) with a small loss of ~20 points. Due to gap down openings on last 2 days I couldn't exit as per original SL but when you are doing positional trading at times this happens. Now need to observe nifty for 1-2 days before taking a fresh call. I don't recommend going short or long at this point as Nifty is trading in no mans land and can move either way.
Nifty Trade Update - 6th Dec
Update (08:10AM): Nifty again likely to open with a gap down today and below its support area of 10750. Since its a second consecutive gap down the opening rates becomes crucial today. If mkt is trading below its opening low after 9:45 (30 mins) then we exit else hold on. Trading weak below its opening price will be negative for Nifty. However overall trend still remains up for Nifty.
Update 09:55 AM Nifty spot 10665 Not able to sustain above the opening lows (opening price is 10670-10700) and momentum is increasing on the downside however on short term chart indicators are suggesting nifty is in oversold territory. Hold on to your longs for now. Will keep updating. Need a sharp recovery from here soon.
Update (12:35 PM): Nifty spot 10665 Nifty is maintaining a trajectory below opening price ( that is definitely a negative sign). Next couple of hours (second half of the trading) is very crucial as it will decide the trend of Nifty going forward. Hold on to longs need to see how the second half is shaping up before taking a decision
UPdate 2.25PM : Nifty spot 10630 Exit longs. momentum is building on the downside. pls exit all longs
Update 09:55 AM Nifty spot 10665 Not able to sustain above the opening lows (opening price is 10670-10700) and momentum is increasing on the downside however on short term chart indicators are suggesting nifty is in oversold territory. Hold on to your longs for now. Will keep updating. Need a sharp recovery from here soon.
Update (12:35 PM): Nifty spot 10665 Nifty is maintaining a trajectory below opening price ( that is definitely a negative sign). Next couple of hours (second half of the trading) is very crucial as it will decide the trend of Nifty going forward. Hold on to longs need to see how the second half is shaping up before taking a decision
UPdate 2.25PM : Nifty spot 10630 Exit longs. momentum is building on the downside. pls exit all longs
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