September 30, 2014

Market outlook

Some signs of buying today which got fizzled out soon.

So the impact of Friday's apparently "good news" of S&P upgrading India's outlook did not impress the market. So much for fundamentals. And when markets sell off on good news or ignore them, it means something else is happening.

September 29, 2014

Small cap index chart

Trend is down... more downsides below 4800.

Weekly charts shows support very well

Market outlook

Friday's bullish piercing bar failed to generate any follow through buying thus negating any bullishness the one day rally created.

This means the previous trend i.e. down is likely to continue.

Weekend update

On EOD charts, we had a bullish piercing bar - this has bullish implications as long as today's low 7840 does not break.

Further confirmation will come if we have a gapup opening on Monday (i.e. above 8020 spot).

Inability to sustain at higher levels can mean weakness and negation of any bullishness attributed to the piercing bar.

The broader trend as per swing theory is down... this will get negated if markets close above 8200 spot.

Option writing points to support at 7800 and resistance at 8200.

September 26, 2014

BANK NIFTY update

Breakout above 15600-15700 failed.

BNF also broke the swing low formed at 15775 thus indicating a change of trend.

September 25, 2014

Market outlook - first sell signal in 13 months

NIFTY broke key supports for the first time in this rally. The positional buy has turned to a sell the first time in 13 months.

Charts are very interesting and today I will be presenting different perspectives.

September 24, 2014

Market outlook

Trend is up and will get "stopped out" on close below 7920 spot.  However expect support near 7850 spot.

If we get an exit signal, this will be the first sell signal after 1800 points rally in nifty.

India's Mars mission Mangalyaan creates history


Yipee..... this is fantastic news and pardon this post in a stock market site but I am crazy about space related stuff and hence could not resist this.

This is nothing short of a historic and a phenomenal achievement if you consider the time frame (less than 2 years from start to finish), the cost ( 450 cr a mere 10% of what others spend) and the result (first country to achieve this on maiden attempt).

Full detailed and exhaustive information available on this wikipedia link.

Also read the press release by ISRO

Special congratulations to the ISRO team who all made this possible.













September 23, 2014

Market outlook

Trend is up but is showing signs of exhaustion. The frequency of down days is increasing and number of up days is decreasing.

Good support exits at the region of 7850-7900. Close below this will mean trend reversal (nifty).

This will also lead to formation of lower swing high and break of recent swing low (7925).

However there is a complication from the option writing clues which shows highest support at 8000 levels (OCT series). As of now option writers are bullish in the sense they do not expect 8000 to break in OCT series. This situation will change going forward though.


September 22, 2014

Market outlook

Trend is up with support at 7850 spot. Advance decline was marginally bullish.

Close above 8200 will lead to more bullishness.

On a different note, VIX is below 12 and complacency is increasing in this market. Note that there is

September 21, 2014

Peakprosperity.com - interesting site for bulls and bears

Just chanced upon http://www.peakprosperity.com/ when I was searching for something else.

I found it interesting for various reasons....
1.Expectations of a crash in US economy (long term)
2.Series of short simple and easy to understand videos on managing the coming crash.
3.Refreshing new way of analysing current global economy.
3.The author. Chris Martenson has an interesting bio which nicely explains his motivation to get into teaching, then financial management and his transition to an eco guru or scientist. Bio makes pleasant and worthwhile reading.


September 19, 2014

Weekend update

NIFTY closes near high of this week. All time high is 8180 spot.

Going forward, the region of 7850-7900 is going to be an important level for trend reversals.

VIX is at record low levels and is creating fear in me just when others are getting greedy.


September 18, 2014

Market outlook

Trend is up with reversal level at 7540 spot... my tentative higher SL is now at 7850 spot.

VIX is at extremely low levels and I am getting worried now.


September 17, 2014

Market outlook

Trend is up with support at 7540 spot.

On my swing indicator, trend reversal will be confirmed on close below 7850 spot.

NOTE: this sell signal can sometimes lead to a whipsaw as profits to date are high at 1700+ points and after a strong trend it is normal for markets to trade sideways and thus generate false signals.

September 16, 2014

Market outlook

Trend is up with swing low support at 7540 spot. While correction has started, a faster retracement of the rally starting 7540 will confirm end of this bigger rally starting from 5500 levels.

Open writing points to resistance at 8200.

VIX was marginally up indicating not much panic in option writers.

September 14, 2014

Fear of losing profits

No matter how much analysis you do, the probability of any trade failing or succeeding (over a 1000+ trades) is on an average 50%.

Position sizing will take care of the risk.

Once you understand this, it does not matter what system you follow or how much analysis you do.

September 13, 2014

Question on Risk management/ Money management

I understand from your blog that risk per trade should be limited to 1% of capital. So if I have Rs.500000 to invest, my risk per trade would be Rs.5000. Suppose the Last close of a stock is Rs 100 and SL is at 90 (10%), the no. of shares I should limit to is 5000 / (100-90) which is 500 valued at Rs. 50000.

What is your advice regarding limiting investment per stock to certain %age of total of capital, say 2%, 3%....so on,  or should it be decided by number of max positions one should keep. Suppose, I am not comfortable with more than 20 open positions at a time. This will limit my investment to 500000/20 i.e. Rs.25000 investment per stock. What are your views on limit of investment per stock, if one is keeping aside Rs. 5 lac capital for shares. And what will be investment limit per stock if the capital is Rs. 10 Lac.

B.P.Singh

September 12, 2014

Weekend update

Trend is up with support at 8000 and then 7540.

Option writing points to support at 8000 and resistance at 8300. Overall bias is bullish.


September 10, 2014

CNX IT technicals

Trend is up with support at 10600.


On weekly charts, trend is again up ( 3 year charts) and we have minor support at 9500 and swing low support at 8500.



BANK NIFTY technicals

BNF is bullish with support at 15600... last few candlesticks indicate sustained buying at lower levels.


Market outlook

Trend is up with support at 8000-7840 spot.

Though markets opened gap down, selloff was limited and advance decline was actually positive. This is a bullish sign.

September 9, 2014

Market outlook

Trend is up and will reverse on close below 7540.

Strong support exists at 8000.


September 8, 2014

Market outlook

Trend is up with support at 8000-7840. Deep swing low is 7540 spot.

Option writing points to increasing support at 8000 levels.

Decreasing VIX is a cause of concern as complacency has usually led to trend reversals.


September 7, 2014

MCX CRUDEOIL charts

Trend is clearly down and with reversal possible on close above 6000. Immediate SL is 5850.


On weekly charts, expect strong support at 5500. But if this breaks and crude is unable to recover, expect next support 20% down at 4500.


MCX GOLD

Trend is down and the correction/ fall may increase once 27000 breaks. Next support is at 26000.

A token pullback may happen just as GOLD is getting oversold but you can ignore this.

If short, your SL is 29000.


Crude oil BRENT charts

On EOD charts, trend is clearly down and will reverse on close above 105.


On weekly charts, BRENT is trading in a range for past 2 years and has good support at 97.50. Break of this can see a further fall to 90 levels.



September 6, 2014

Bollinger band and reversals

Several times, I read in forums or receive emails saying so and so stock has hit upper Bollinger band so can I short. Or stock has hit lower Bollinger band so can I buy.

Just remember one simple rule - buy strength and sell weakness. For trend reversals, look at break of areas of support or resistance.

For eg. look at this chart of JP ASSOCIATES.

September 5, 2014

Weekend market update

Broader trend is up with support at 7540 spot. Intermediate support exists at 7840.

Option writing clues are bullish and point to support at 8000.


September 4, 2014

Market outlook

Markets form first day ow "lower high lower low" correction. After 2 weeks of a rally, a pause is perfectly fine. This pause can be for 3-4 days and it is normal.

OPtion writers are bullish that 8000 will not break this series.

Quote of the day

Whatever you are today is because of the choices you have made in the past.

What you will be tomorrow will be determined by the choices you make today.




September 3, 2014

Human weaknesses

1) Loss Aversion: the strong tendency for people to prefer avoiding losses over acquiring gains

2) Sunk Cost Effect: The tendency to treat money that already has been committed or spent as more valuable than money that may be spent in the future

3) Disposition Effect: the tendency for people to lock in gains and ride losses

4) Outcome Bias: The tendency to judge a decision by its outcome rather then by the quality of the decision at the time it was made

5) Recency Bias: the tendency to weigh recent data or experience more than earlier data or experience

6) Anchoring: the tendency to rely too heavily, or anchor, on readily available information

7) Bandwagon Effect: the tendency to believe things because many other people believe them

All traders have in one or another time been affected by one or several of these biases. Its easy to make mistakes when you are under pressure and dealing with money.

As Jesse Livermore once said, above all other things we have to guard against ourselves.

Market outlook

Trend is up with support at 7540... On hourly charts, support/ swing reversal level is at 7850 spot.

Option writing points to support at 8000 levels. Writers are bullish and do not expect this level to break this month.


September 2, 2014

Market outlook

Trend is up and will reverse on close below 7540. Immediate support exists at 7840.

Option writing points to support at 8000.

NIFTY diametric chart

I have posted this before but am unable to find the link. This is not my research but this chart has appeared in firecharts in JUN 2013.

The view here is of a rally to 11000 nifty is expected (F wave) followed by a crash to 4400 levels... this will be followed by the start of super massive bull run.

Do not be obsessed with the levels or the accuracy.... just focus on the pattern.

So generally there seems to be a consensus that this rally will continue for some time, we will have a big correction and then start of a new bull run. The levels/ timing differs but that is ok.




September 1, 2014

Market outlook

NIFTY and B Nifty close at new record highs.

NIFTY closes first time above 8000 and BNIFTY above 16000. So far trend is still up.