May 30, 2015

NIFTY monthly chart

NIFTY forms second lower high lower low this year on monthly charts.

We have good support at 8000 spot levels... break of this will lead to deeper correction in the markets.


May 29, 2015

Market outlook

- trend is up on daily charts
- swing low SL shifted to 8270 spot
- immediate resistance 8500
- advance decline mildly positive
- option writing support 8200 resistance 8800


MCX CRUDE charts

Trend is up...  support 3350 - buy more above 4000


MCX SILVER charts

SILVER is trading in a range... do nothing.


MCX GOLD charts

Trend is up and will reverse on close below 26500.


May 28, 2015

Market outlook

- after 3 days of decline, nifty forms outside bar
- break below 8270 spot will lead to more declines
- note that on weekly charts, we are still trading in previous week's hi-lo levels
- advance decline was negative though not strongly.


NIFTY intraday futures chart

- first big bar of day set initial trading range
- this bar was also breakout bar but which failed
- break below this bar and defining area was short trade trigger
- cover on break above trailing SL.


Banking stocks which have corrected the least

Logically, in the event of any rally, these stocks should do well. You can identify other stocks in different sectors.

Just ensure that all stocks are highly liquid, that you have identified an SL before you take a trade and you do not risk more than 1% of your capital on any single trade.

BANK NIFTY breakout levels

As per kplswing indicator, trend will turn to up on close above 18800.


As per monthly high low breakout strategy, the buying above level is 19000.


For positional futures trade, you should use 15 min or hourly charts.


May 27, 2015

Market outlook

- markets form third day of lower high lower low
- within this, markets opened gapdown but closed near day's high
- advance decline was however negative
- key levels tomorrow will be 8250 spot and 8350 spot
- some more downside possible if 8250 breaks
- option writing JUN series support 8000 resistance 8800


NIFTY futures intraday charts

- did not trade short because of strong nearby supports
- lower tails did not encourage short trades
- breakout above first box was first long trade
- this gave no profit no loss
- aggressive long trade would be at 5th or 6th bar.
- strong intraday recovery negated any short trade consideration
- did nothing the whole day as markets were rangebound


Hot stocks

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25 most liquid stocks

List is sorted by Vol... SUNPHARMA leads the list

Look at the volumes in a day... a small cap/ mid cap will take 5-6 months to achieve the volume what these stocks achieve in a day.


Stocks with good liquidity

FILTER: 20 day average price volume multiple > Rs.50 crores per day.


May 26, 2015

Nifty Companies Aggregate Profits Have Fallen 21%

Source: http://capitalmind.in/2015/05/nifty-companies-aggregate-profits-have-fallen-21-even-if-you-ignore-the-mammoth-loss-by-sterlite

Nifty results continue to be HORRIBLE. I can’t even begin to tell you how bad the situation is, but see this today. Three Nifty companies announced results. And they were like this:

BHEL saw consolidated profits fall 59%
Tata Motors saw consolidated profits fall by 56%
Tech Mahindra saw consolidated profits fall by 39%

Even RBI is starting to say the worst is yet to come. Whatever happens, don’t ignore your stop losses. And remember that in such a market, investing in a consistently profitable company is probably even more important than ever before.

Avoid stocks with low liquidity

In a rally, it is always easy to buy most stocks. However in times of correction, liquidity suddenly vanishes.

Look at AXISCADES... stock had a nice run up from 200 to 400 levels but a much faster fall from 400 to 200. Needless to say, stock opened and closed at lower circuit 12 days in past 2 months (there was no upper circuit during the rally).

My general rule is to focus on stocks having 20 days average volume above Rs.20 crores. This gives a universe of 160 stocks and is more than enough for any trader/ investor.


Market outlook

- trend down on daily charts as markets form 'lower high lower low' for second day
- advance decline negative
- 61.8% retracement for this correction gives approx target 8200
- option writing clues point to support at 8000 and resistance at 9000 (JUN series).
- above means chances of higher swing low followed by rally.



NIFTY futures intraday charts

- initial bias was bearish
- 3 down arrows show best short entry trade (I took first 2 boxes)
- cover around 8330 F.
- I covered near the hammer at 8330 F around 1.30 (and not the later one after 3 ).
- overall difficult day today




May 25, 2015

Market outlook

- we have a sell on nifty spot as index breaks 2-3 days low
- enough warnings in past few days specially the breadth
- expect more weakness below 8200 spot
- this correction can lead to formation of higher swing low
- this means assuming 8000 holds in JUNE we can expect new highs
- option writing supports this view with initial writing levels at 8000 put 9000 call
- this is a huge range


Sell signal on hourly charts

- we have a sell signal on nifty futures hourly charts today
- SL will be 8500F


We have a similar sell signal on bank nifty charts also


NIFTY futures intraday charts

- initial bias was bearish as markets broke previous day's support
- action in first 4-5 bars of the day (first box) showed no buying support from bulls
- break of support followed by no buying means one can take short with SL at day's high
- trailing SL shifted down during day
- exit at close.

- tomorrow, consider long above 8400F only.


May 23, 2015

How to take food from a pride of lions without a fight

And the stock markets are no different. While confidence is what you need, risk management is obviously important.

May 22, 2015

NIFTY intraday futures chart

- did not trade as I was out of market whole day
- there were 2 buy signals today
- first on breakout above small inner box (if you are following only today's chart)
- second on breakout above bigger box (if you following historical intraday charts as well)
- long trade got stopped on break of 8460 F
- the first (early) long trade was slightly profitable
- the second (late) long trade was in loss
- candlesticks would have warned of break of 8460F if one studies patterns
- finer entry/ exit is possible on 1 min or 3 min chart at cost of more trades/ whipsaws


Market outlook

- trend up on daily charts as higher high higher low maintained
- advance decline does not support rally
- divergence in banknifty index as it closes in red even as nifty closes in +ve
- option writing support seen at 8300


May 21, 2015

Market outlook

- trend is up on daily charts
- breakout from range is not showing fast rally; more like a struggle
- advance decline negative today
- consider 8300 as good support; watch this level for trend reversal
- option writing support 8200 resistance 8500


NIFTY hourly charts breakout

- we got the breakout on hourly charts triangle
- however the breakout rally is missing
- nifty fut has barely moved 100 points in 4 days
- something else is happening
- immediate support 8370 F below which trend reversal possible


NIFTY futures intraday chart

- markets still rangebound
- break below first box was short trade which got stopped out at small loss
- breakout above second box was long trade which gave small profit
- overall a day for the broker


May 20, 2015

NIFTY futures intraday charts

- breakout above first swing high (small thick line) was bullish
- but this brings entry level close to previous day's high
- so it makes sense not to do anything (in hindsight)
- long trade here get stopped out at no profit no loss
- short trade does not make sense
- overall a day for brokers and not traders.


Market outlook

- trend is up
- swing reversal level increased to 8100
- advance decline flat though market was up 0.7%
- follow thru buying after a breakout is missing
- option writing support 8300... cut in OI in 8500 call options


May 19, 2015

Market outlook

- trend is up despite intraday volatility
- doji with upper tail indicates selling at higher levels
- expected breakout rally not happening
- advance decline flat
- option writing support at 8000 resistance at 8500


NIFTY futures intraday charts

- ignore first bar of the trade as it is a freak trade
- breakout out from initial trading range was buy signal
- close below 8405F was exit call for long position
- short trade not considered as overall bias was bullish
- in hindsight, big bar breaking SL could be considered as possible trend reversal intraday


May 18, 2015

Market outlook

- nifty spot above recent swing high
- technically trend is up
- close below today's low can mean breakout failure
- advance decline 2:1
- option writing support at 8100


NIFTY futures intraday charts

- breakout above 8290F was bullish
- however this signal could be ignored because of trendline resistance on hourly charts
- next breakout was above 8325F (day's high).
- this was profitable with no whipsaws

Today there was a drop of 10% in VIX - this meant profits in call options were limited. For eg., options at 2.10pm were cheaper than at 10.30am even while nifty was at same level.




Breakout on nifty hourly charts

Today we had a breakout on hourly charts.  Next resistance 8400F.

Consider trend as up above 8300F... close below this will mean possibility of breakout failure.




May 17, 2015

NIFTY yearly charts

You have missed nothing had you gone on a vacation this year...


1929 The Great Crash. - a video

Nothing has changed except the people. But the emotions of greed, fear, hope etc remain the same.

May 16, 2015

With or without Modi, markets will blast

All media is talking of one year performance after Modi.

Ignore this analysis, news and views... it has no value if you are a smart trader/ investor.

See the chart... can you tell who was what, where and when?

The best rally happened from 2003 to 2008 (no one remembers this). After that it was consolidation and thereafter a breakout.

It is normal for a breakout level to be retested so we can have a correction followed by a super rally.

Irrespective of who is in power....




May 15, 2015

Market outlook

- trend down on daily and weekly charts
- next week, close above 8400 will be bullish
- advance decline marginally positive
- option writing points to support at 8000 and resistance at 8500


NIFTY futures intraday chart

- markets trade in range formed by first 2-3 bars
- no reliable trades today
- still, I traded long and got a whack


And this is how the triangle on hourly chart looks like


Alan Greenspan quote on beating the market

This decade is strewn with examples of bright people who thought they had built a better mousetrap that could consistently extract an abnormal return from financial markets. 

Some succeeded for a time. 

But while there may occasionally be misconfigurations among market prices that allow abnormal returns, they do not persist.


May 14, 2015

Triangle in hourly charts 300+ points

- development of triangle seen in hourly charts
- size of triangle is 300+ points
- expect a breakout atleast of similar size whenever this happens
- direction of breakout unknown; let market's tell us when this happens
- key levels to watch 8100-8300 F


NIFTY futures intraday charts

- markets trade in range formed in first 5-10 minutes
- we are nearing end of triangle (hourly charts) so does not make sense to trade.
- I took an intraday short trade - got stopped in 5 min.
- did nothing thereafter


Market outlook

- trend is down on daily and weekly charts
- reversal value is 8350-8400 on daily charts
- support is at 8000 below which monthly trend can turn down
- watch for triangle development in hourly charts (separate post on this)
- possible inverted H&S though a weak one as right shoulder is bigger than left!



MCX CRUDE technicals

Trend is up SL 3700

Minor negative divergence on RSI


MCX SILVER technicals

Currently rangebound between 36000 and 40000.

Breakout above 40000 will be bullish.

Note RSI is already hitting resistance levels.


MCX GOLD technicals

Trend is up SL 26500 resistance 28000


May 13, 2015

Market outlook

- trend down on daily and weekly charts
- trend reversal level is 8400
- support 8000
- close below 8000 on monthly basis will be bearish


Triangle formation in NIFTY hourly charts

Triangle formation in NIFTY hourly charts... wait for breakout and then trade in direction of the breakout.


NIFTY futures intraday charts

- initial bias was bullish
- first bar of the day was breakout bar as it broke above yesterday's trading range
- went long on this breakout bar but got stopped out at minor loss
- traded short as per second arrow - this trade was profitable
- did not take last long trade (3rd arrow)



May 12, 2015

Infidelity and stock market crashes

Original source: unknown

Once upon a time there was a village in which there lived many married couples. There were certain qualities about this village, though, that made this village unique.

Whenever a man had an affair with another man’s wife, every woman in the village got to know about the affair, except his own wife. This happened because the woman who he had slept with talked about their affair with all the other women in the village, except his wife. Moreover, no one ever told his wife about the affair.


Hot stocks and charts

LAST updated: 12-MAY-2015 
  • These charts are for educational purposes only.
  • This is not a recommendation to buy or sell
  • Follow the trend... if stock is at 20 days high, trend is up and vice versa.
  • Golden stoploss: min 10% or 20 days low (long position).
  • Never risk more than 1% of your capital on any trade.
  • All charts are provided by icharts.in
CAIRN INDIA
CAIRN INDIA chart

Market outlook

- markets unable to cross 8350-8400 spot
- big reversal bar
- inference is of a market rangebound between 8000 and 8350
- option writing points to resistance at 8500
- close above 8400 will be bullish
- break of 8000 will lead to more downsides