October 26, 2016

Market outlook

Daily charts
- trend is up on daily charts
- today, markets reversed from upper trendline of falling channel
- markets closed 1% in red, AD was negative
- VIX was negative implying no panic
- option writing support 8500 (NOV series)




5 min charts
- first bar was large body candlestick
- it was also a gap down and a hammer
- the first bar high low was never crossed.
- difficult taking a short trade
- if considered, max profits would have been 35-40 points
- only positional traders would have got max profits.


17 comments:

  1. so till the time the markets r in the falling channel , it will be tough to trade on up or downside ,so long term traders should better wait for some more time to get clear direction ?

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    Replies
    1. Long term investors should follow the technicals of the specific stocks.

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  2. hi kpl,

    nifty moves down with overlapping legs....interpretation bullish....

    give me your views plz

    https://www.tradingview.com/x/UMfR9yH3/

    ReplyDelete
    Replies
    1. Falling channels are usually bullish.

      I am bullish as long as 8500 holds.

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  3. Sir, is falling channel bullish irrespective of it's preceding trend ?

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  4. No... the prior trend has to be up and a falling channel (sloping downwards) shows healthy correction of the previous rally. When correction is over, the prior trend usually resumes.

    For any trend reversal, look for a fast/ big move in opposite direction.

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  5. "if considered, max profits would have been 35-40 points
    - only positional traders would have got max profits."
    Sir ,will please elaborate this ?how 35 points would be max points as the difference between high N low is hardly 5 points.

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  6. Sir,I would like to know if instead of falling channel ,rising channel then should it be considered bearish?Please clear my confusion
    Thanks

    ReplyDelete
    Replies
    1. No. This is in context of previous trend.

      Any corrective move is always slower as compared to current trend.

      So if trend is up, a corrective move (eg. falling channel) usually ends with more rally.

      Similarly, if trend is down, a corrective move (eg. rising channel) usually ends with more downsides.

      Here I am defining a corrective move as any move which is slower/ time consuming.

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    2. Thank you very much sir.
      I was confusing myself with the rising channel in continuation of preceding up trend.Since this rising channel after an up trend is not corrective one .Or rather it is in continuation of up trend.it should be taken as bullish only /supportive only.
      Hope I understood properly.
      Thanks once again sir

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    3. Respected Sir,
      This is further to rising channel.Please take daily chart of PNB bank as classic example of rising channel.Will you please elaborate.Does it support my above statement,.This is to clear my confusion

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    4. There is no rising channel in PNB

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  7. Assume short trade considered after 5-10 min of market open... best entry level will be around 8650 F.

    Assume covering around 8610 F.

    Max profit 8650-8610 = 40 points.

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  8. Sir, is it good time to buy IDEA as its touching lower bollinger band in weekly chart. but my fear is that, walking the bollinger bands in lower band.

    ReplyDelete
    Replies
    1. Buy stocks making new highs, not new lows.

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