December 31, 2013

NF monthly charts

The December month and the 2013 year has officially ended (at least from a trading perspective) so let us see what the charts look like.

Monthly charts: attempting a breakout at 6300-6400 levels.... strong resistance here. Last 2-3 attempts have failed.

Deep support at 4500-5000 levels.

Quarterly charts: breakout from triangle (not perfect) will be bullish.

Quarterly line charts ... bigger view: nifty is still a buy ... first buy was around 1600 levels ... SL 4500

Of course... this view from academic perspective. Not easy to trade nifty like this.

Top gainers and losers 2013

Filter is average daily volume is more than Rs.5 crores.

Results are shown in YTD% column... ignore other columns.

December 30, 2013

Market update

NIFTY trades rangebound... trend is up and will reverse below 6100.

Overall market is very rangebound so difficult to comment on moves.

December 27, 2013

Weekly update

NIFTY closes at weekly high.... bullish sign. But VIX is still dropping indicating more complacency (nothing can go wrong...).

And weekly charts are not so bullish... expanding triangle is bearish

December 26, 2013

Market outlook

Sideways trading for past 3 days... expiry was a mute affair with selling seen at 6300 levels.

Lower range is 6250... say 6200. Since markets have not tanked or corrected, we can assume previous trend, i.e. UP, to continue.

Trade accordingly.

Option writing clues JAN series

Writers won this DEC series as nifty closed below 6300.

Now next month, tentative figures indicate support at 6200 and resistance at 6500.

In other words, option writers do not expect these levels to cross. So that makes the trading strategy quite obvious (unless their positions shift which we will anyway know).

December 25, 2013

Market outlook

Markets take a pause....Last 2 days we are having rangebound trading with positive advance decline. Normally we should have a reversal at this point but the prior trend is not so strong or long (time wise).

Difficult to comment much at this point.

Intraday levels are posted on charts.

December 23, 2013

Market outlook

Some signs of selling at higher levels. Last 4 days move is a channeled move meaning a corrective move to previous fall. This means that markets might start correcting now. However advance decline and VIX is not supporting this view.

Commodity update

CRUDE OIL possible buy signal... holding 6000 is bullish.

December 22, 2013

Weekend market update

On daily charts, nifty gained 1.7% and closed at the highest level this week. The weekly close was also 1.7% which means all gains came on Friday.

Charts point to possible formation of a higher swing low at 6100 levels. Holding this level coming week will be bullish. On the other hand, if markets close below this level this week, it will mean a lower swing high has formed.

December 20, 2013

This is one lousy market...

If you had gone on a vacation in SEP and come back... you would have missed nothing as a positional trader. NIFTY today is exactly where it was 3-4 months before.

Above ROC shows nifty has gained barely 3% in 20 trading days and 4% in 50 days!

December 19, 2013

NIFTY selloff the second time...

This month we had two ocassions when nifty opened strongly with a gap on whatever called good news but sold off immediately...

The first was on 9-DEC when the VIX gave a double whammy and dropped almost 15%!

December 18, 2013

Market outlook

After 6 days of decline, markets closed nicely in positive. Swing low at 6100 (roughly) is now important.

Intraday update...

We need close above 6260F for strength.... intraday not being able to sustain above 6220F will lead to weakness.

December 17, 2013

NIFTY forms an outside day

Within the correction and the subsequent rangebound trading, nifty has formed an outside day. Normally this is considered bullish but the previous bar is very small so this pattern should be viewed with some suspicion.

Trading above today's high will be bullish....

The 5 min charts depicts the market where we had a nice open but close near day's low.

The 15 min charts give a slightly broader perspective....

December 16, 2013

Market outlook

It is almost 10.30pm and I realised I have not posted an update so here is a quick one.

Today's very small bar is indicative of bulls lending whatever support they can at lower levels. After 5 days of continuous decline a pullback is very much in order.

Whether this will lead to formation of a 'lower swing high' is something time will tell.

Commodity update

COPPER: bullish if it can sustain above 460... immediate resistance 470 and then strong rally.

December 15, 2013

Weekend commentary

NIFTY closes at weekly low and loses 230 points off the weekly high. We have a sequence of 4 continuous days of lower highs and lower lows. We had a gap down opening on almost all days this week.

The initial start of weakness was apparent when markets opened 150 points gapup on Monday and sold off immediately. We used this warning to exit all long positions and this was done before 10am on Monday.

December 12, 2013

Market outlook

NIFTY opened gap down and closed 1% in the negative. The closing has come near a support area of 6200. A bounce is in order here but if this does not materialise and we have a fast break of 6200, then problems for the market. The overall nature would then be changing from buy on dips to sell on bounce.

Weekly charts should be very interesting tomorrow.

US markets

DOW JONES forms a lower swing high at 16050. Break and close below recent swing low at 15800 can lead to start of a bigger correction. Note support at 15800.

RSI is at 50... a support area.

December 11, 2013

NIFTY monthly chart

We are encountering good resistance at current levels. After the 2008 top, this level has never been crossed decisively. Expect a strong rally if a breakout happens...

Slower pace of correction is a bullish sign

NIFTY is taking its own sweet time to come down... the slower pace of correction is a bullish sign. On a different note, VIX also declined indicating lack of any fear within this correction.

GOLD breakout

We might have a possible buy signal in USD GOLD as it has managed a nice close above 1250. On the flip side, broader trend is down and RSI has already hit 50 so this might limit gains. The correct thing is let GOLD form a swing high and then buy on close above this swing high.

The corresponding buy above level for INR GOLD is 31000.

December 10, 2013

Markets still bullish

Despite an adverse advance decline ratio, I am still bullish on the markets. This is because of  a continuous fall in VIX (6% today) and increasing put writing at 6000 levels.... I am hopeful this will increase to 6200-6300 levels.

Drop in VIX implies that even if you bought puts yesterday, you would not have earned today.

December 9, 2013

NIFTY closes at new lifetime high

NIFTY closes at new lifetime high. The closing was however towards the day's low as the high made in first 5 minutes was never crossed. In fact, the first 5 min bar showed a long upper tail which is indicative of selling.

Advance decline was negative even as nifty closed 1.7% in the positive.

Commodities update

COPPER: trend down... bullish on close above 460

VIX drops 18% and option buyers get hit

Markets are currently up 1.4% but VIX has dropped 18% (now 14%). This has led to a peculiar situation where markets have rallied but option buyers have lost. The culprit is VIX which this time again has helped option writers. In other words, even though markets are up, option writers have not lost.

Biggest losers are those who bought out-of-money calls AND puts on Friday... they have lost both on calls and puts.

SGX NIFTY up 200 points....

Just got a call from someone.... SGX NIFTY which I rarely track is up 200 points at 6510.

Trend is already up so blog followers should be making some fantastic money on the breakouts posted here from time to time.

Let's see... we should be alert for profit booking as people who have missed this rally will now suddenly become confident to enter.

December 6, 2013

Weekend commentary

NIFTY holds to yesterday's low and closes at weekly high... this is a bullish sign. VIX  is marginally up so not an issue. Advance decline is marginally positive. Overall trend is positive.

Option writing points to increasing resistance at 6400-6500 levels and support at 6000. We are already at 6300 levels so this might be a problem if you are long ( I am crazily long in stocks!)

December 5, 2013

Testing a new commenting system from Disqus

Testing a new commenting system from Disqus... Facebook users can now directly post comments.

Let's see how it works....

NIFTY breaks out from range but closes at day's low

NIFTY breaks out from range but closes at day's low. The closing was above the range which is a good sign but closing at day's low indicates selling at higher levels. On the plus side, VIX dropped by 8% thus showing diminishing fear at current levels.

December 4, 2013

Drop in VIX and option prices

Last 2-3 days witnessed a substantial increase in VIX - this has a direct implication on option pricing and makes option expensive. Higher VIX implies greater risk or fear so option writers charge higher premiums.

VIX is reflected in option pricing via something called implied volatility. It is something every trader should know and not trade options unless one is thorough about ABCs of option pricing.

NIFTY correction... market still buy on dips?

We have the start of what looks like a minor correction. Fall in VIX and increasing open interest at 6000 put implies limited downside.

Advance decline was flat so we did not really have any selloff.  This can change if decline persists for more than 2-3 days.

December 3, 2013

Breakout or reversal expected in NIFTY

NIFTY closes at upper end of range.. depending on your bias, you will be bullish or look at this as an excellent shorting area as you are close to a stoploss.

10 year GOLD chart

Interesting chart... trend is down and will reverse above 1400. Immediate support 1200... next support 1000.

December 2, 2013

Market update

NIFTY closes at highest level of the trading range... it has marginally closed above the recent swing high.

Option writing points to support at 6000 and resistance at 6500 this series. This implies possible bullishness.

Commodity update

COPPER trend is down... bullish on close above 460

Share this...