Nifty breaks down its large trading range (5730 5900).

Nifty Watch:- Today Nifty opened at 5766. At the same time Nifty touched its day high at 5775 and then start moving down and touched it low at 5687 and finally closed at 5697 with a decline of 69 points to its day open.

Nifty breaks down its large trading range (5730-5900) and closed below it. Nifty is now at its previous low which is made on April 19 2011 at 5693. It may possible that nifty find its support and move up and it is also possible that nifty breaks down it.

Trend:- Nifty is breaks down its 200 days MA and closed below it. Nifty trading above to its 50 days MA.

Level:- Looking for support at 5600. Resistance comes at 5800.

TA Insync (55-5) is in downtrend. It is moving down at -19.39. This suggests that Nifty may move down also.

Summary:- Nifty breaks down its trading range and 200 days MA and moving down. Buying is not
suggested now, thus investors and traders should wait for a buy signal.

Nifty trading at lower level of its trading range (5730 5900).

Nifty Watch:- Today Nifty opened at 5782. At the same time Nifty touched its day high at 5804 and then start moving down and touched it low at 5706 and finally closed at 5751 with a decline of 31 points to its day open.

Nifty breaks down its large trading range (5730-5900) but at the end Nifty came back in large trading range.

Trend:- Nifty is standing on its 200 days MA and trading up to its 50 days MA and still in trading range.

Level:- Looking for support at 5700. Resistance comes at 5900.

TA Insync (55-5) is in downtrend. It is moving down at -18.63. This suggests that Nifty may move down also.

Summary:- Nifty is trading at its 200 MA. It may possible that nifty find its support here and move up and it is also possible that nifty breaks down its 200 days MA and move down. But in both cases Nifty will trade in one direction and that will give the trading opportunity to the investors and traders.

Nifty print a pattern of NR 7 in monthly chart. This suggest that a big move may come in next month.

Nifty remains in a small range (58005900).

Nifty Watch:- Today Nifty opened at 5884. At the same time Nifty touches its day high at 5892 and then start move down and touches it low at 5819 and finally closed at 5831 with a decline of 53 points to its day open.

Nifty remains in small range from 5800 to 5900. Trading in a range require a unique concept of buying at support and selling at resistance. They have a high accuracy rate when traded properly.

Trend:- Nifty is trading up to its 200 and 50 days MA.

Level:- Looking for support at 5800. Resistance comes at 5900.

TA Insync (55-5) is in downtrend. It is moving down at -10.95. This suggests that Nifty may move down also.

Summary:- There is no point in trading a range if it is not wide enough. I advice to wait for a breakout or a breakdown.

Nifty locked in a small range (5800 5900).

Today Nifty opened at 5876 and moved down to 5792 then it consolidated for 2 hours and touched low at 5791 then it move up and touched its day high at 5893 and then came back to its day open and closed at 5864.

A breakout or breakdown is about to come since Nifty is locked in a narrow range (5800-5900) from last 3 days.

Trend:- Nifty is trading above to its 200 and 50 days MA.

Level:- Looking for support at 5800. Resistance comes at 5900.

TA Insync (55-5) is in downtrend. It is moving down at -2.47. This suggests that Nifty may move down also.

Nifty is inside a tight trading range. For position trader buying is suggested above 5900 with a stop of 5800.

Nifty View 26 04 2011

Upbeat: Metals, Auto & Auto Ancilliaries, Oil – All kinds, Shipping, Pharma
Neutral: Banks, Sugar , Real Estate
Downbeat: IT

Overall market direction: Rangebound between 5750 and 5950. The undertone is bullish. In the F&O
segment, 43 stocks are in a strong uptrend (ADX14 > 30 and DMIPlus14 > DMIminus14) while just 3 are in a strong downtrend.

Trading Strategy: Short term traders should go with intra day trades until a breakout in either direction.
Position Traders should buy for a few days/weeks since many stocks are giving signs of bullish bases / patterns. Short selling above 5750 is not recommended.

Nifty trading at the lower end of trading range.

Nifty Watch:- Today Nifty opened at 5824 and touches its high at 5897. After that Nifty move down and touches it’s low at 5722 and finally closed near to its day low at 5732 with a decrease of 92 points to its day open. Nifty is trading at lower end of its trading range (5950-5730). A breakdown at this level (5730) may lead to a down move.

Trend:- The short term trend is up. Nifty is standing on its 200 days MA. If nifty breaks its 200 days MA then we may enter in a downtrend.

TA Insync (55-5) is in downtrend. It is moving down at 17.51.This suggest that Nifty may move down also.

Level:- Looking for support at 5550. Resistance comes at 5950.

Summary:- Nifty is trading at the lower level of its trading range. Buying/Selling is suggested after the breakout or breakdown. Investor should wait for this.

Nifty is in a small trading range.

Nifty Watch:- Today Nifty opened at 5898 and touches its high at 5907. After that Nifty move down and touches it’s low at 5806 and finally closed near to its day low at 5814 with a decrease of 84 points to its day open.

Nifty is trading in a small trading range from 5730 to 5950. A breakout or a breakdown at these levels will decide the next move of the nifty.

Trend:- Nifty is trading above to its 50 and 200 days MA. The short term trend is up.
TA Insync (55-5) is in downtrend. It is moving down at 27.03.This suggest that Nifty may move down also.

Level:- Looking for support at 5730. Resistance comes at 5950.

Summary:- As nifty trading in a range so traders (investors) should take day trade only and also look for the breakout or breakdown at 5950 and 5730. This will give a big buying opportunity.

Market resumes, uptrend above 5950.

Nifty Watch:- Today Nifty opened at 5747 and touches its low at 5735. After that Nifty move up at 5923 and finally closed at 5921 with a gain of 176 points to its day open. Today nifty hold its support at 5780 and move fast towards its resistance level at 5950. On Friday a
breakout at 5950 may see a new high for the nifty.

Trend:- Nifty is trading above to its 50 and 200 days MA. The short term trend is up.
TA Insync (55-5) is in downtrend. It is moving down at 31.73.This suggest that Nifty may move
down also.

Level:- Looking for support at 5780. Resistance comes at 5950 which is very near.

Summary:- If market open cheerful on Friday then buy call options of index heavyweight stocks.
Suggestions are ICICI Bank, Strike price-1120 L&T, Strike price-1700 Infosys, Strike price-3300 TCS, Strike price-1200 A general rule-Focus mainly on bluechips and index stocks. Try to avoide buying midcaps and smallcaps.

Suddenly, risk appetite has gone away. U.S. Markets, Silver are both falling

As I write this letter on Tuesday, April 12, evening, The S&P is trading at 1310, down 14 points,
about one percent, while Silver on the MCX is at 59,000 which is approx 2000 below Monday’s
highs. I assume that the small declines we are seeing are probably a correction after a sensational rally in Silver, and, a steady up move in Equity. But, for whatever it is worth, we do have a decline! Suddenly, people who were prepared to buy anything at any price became cautious. The message is: All markets correct. This is a theme that has helped me time and again.

When I extend the theme to the Nifty, here is what I get: A correction has started for the Nifty. This decline finds support at 5780 and then at 5550. It appears that 5780 will breakdown when markets open on Wednesday morning, therefore, we can expect a move towards 5550.

For the longer term, the Nifty has seen a rally from 2200 to 6335. This entire up move should
correct. But, we cannot say when this correction will take place. It could have started, or, maybe we will see new highs and then correct. Yet, if I believe that a deeper correction is inevitable, then I am holding back on investing in equity, waiting for lower levels.

Nifty consolidation continues

Earnings may influence Index for coming two weeks The Nifty has started a correction. Support should come in around 5820 / 5780. We had suggested that long positions should be held unless the Nifty closed below 6850. The Index closed at 5842, almost at the cutoff number. Therefore, we will take 5820 as our cutoff number for Monday. After the first 15 minutes, if the Nifty is trading below 5820, then we should close all trading position in the Nifty and wait for support to emerge.

Short Term Trades: There are a number of F&O stocks now breaking out of consolidation patterns. These trades usually work out. We have given the charts with stoploss and targets. It is important to follow the market and then take such trades. If the market is falling, we annot go and buy blindly. Look for a stable market, then consider these trades.

Consolidating in narrow range, waiting for next move

The Nifty today, did virtually nothing, consolidating in a narrow range. Today was an NR7 day (narrowest range in seven days). We can expect a trending move tomorrow. Traders should be on the alert. Nifty chart is given below. Note the NR7 days painted in blue. Trending moves emerge from these patterns. The Bank Nifty chart is also given below. The Bank did not make an NR7. The pattern for the Bank Nifty resembles a pennant (small, pointed triangle) which is usually made half way in an up trend. Traders should buy the bank Nifty above 11,900 and avoid buying if it breaks below 11,540.

Nifty, Ascending Triangle targets achieved, What Next?

The Nifty had broken out of an ascending triangle (see March 29 post, do a search for ascending tiangle or March29. Search is on the top, right side) with a target of 5930 approx. This target has been achieved. What happens after a pattern target is achieved? There is no law which says that markets have to stop moving up once upside targets touched. But, a target has technical significane. It is likely that the Nifty will consolidate around 5930 before it begins another move, up or down.

Trend: The trend is up with prices well above 200 and 50 day averages. Trading becomes simple when we have a confirmed trend. Buy on dips, buy on consoliadtion. Expect intra day corrections since this is a move with strong momentum.

What about a reversal of trend? Well, what about it? Reversal of an up trend usually takes place when markets begin a process of distribution. There are no signs as of now.

And then there were Eight!

Wow! The Nifty has recorded eight consecutive days of gains. Yet, as I have written earlier, this is not a record since in the 2009 bull market, there were 14 consecutive days of gains. So, eight and still counting! The Nifty was choppy today, thanks to the F&O expiry which was scheduled for the day. F&O expiry days are not good days for trading. There was an intraday dip of almost 100 points – a buy on dips opportunity. Such opportunities are coming every day, with the Nifty usually falling 40-50 points intraday before recovering. Manage the risk in Long Positions. With every passing day, there is increased risk in long positions. It is possible that markets can keep on going up day after day, but sooner or later we will have a correction, and, a dip. Traders should ensure that they cut their positions when trend indicators on their charts give a sell signal. Trend indicators include change of direction of ZeroLag MA (21 or 34) , MACD with 17,9,12, Ta-Trend crossover of trendline below signal line, TA-Insync 55-5 crossover of insync line from +45 to below, Trix crosses below its

signal line…. The intra day charts should be at least 15 minutes and higher.

Nothing to worry, Nifty keeps on going up

The Nifty closed higher for the sixth day in a row. This is not impossible, since the Nifty has closed higher for 14 days in a row, in the 2007 bull market. I do not know if we will replicate that record, but markets can do anything. As traders, we must learn the art of following the market rather than trying to dictate (to the market). The chart below shows the head and shoulder in the Nifty, giving a target of 6100 approx. The pattern has an up sloping neckline, not clean, but then we cannot have price patterns made to order. The second chart shows an ascending triangle in the Nifty, two resistance points at the same level, and two support points which are ascending – this is a perfect pattern, so we can go for it. Pattern targets here are 5900, but the targets are just that – probable estimates.

There is no need for levels. Watch your charts. try to be with lower time frames – 5 minute, 15 minute and so on. If a trend indicator gives a sell signal then exit positions in that security. This is a safer way to trade than trying to bully the market into some level or the other.

Five days of gains in Nifty, consolidation likely

We had a wide range day (WR) seen on Friday when the Nifty had a range of 140 points (including the gap). This is the widest range in many days, hence it qualifies as a WR7 (widest range in 7 days). What happens after such wide range days? Markets will usually consolidate giving rise to noise and choppiness. The correct way to trade such noise is by using lower time frames.

What is the trend? We measure the intermediate trend is different ways: (1) The TA-Insync(55-5) is up (2) Zero Lag Moving Average 34 is moving up (3) Ichimoku is in an uptrend with the red line above the blue line. Now, readers should use any one of the three methods to measure the trend. If you use Zero Lag then check the direction. Moving up means UP trend, and, moving down means downtrend.

My point is: trend is up, no matter what you use. Second point is: do not fight the trend. If you feel that the rally is unjustified, then stay away, but selling short is not a good idea. Traders can take short side trades only when their intra day charts give a short signal in any of the above trend methods. Volume should be low since the short trades will go against the trend. If the trade appears to work out, then add volume. The correct trade is to buy on corrections. use 5 minute or 15 minute charts to get buy signals from any of the three methods. When you get this siganal, go for it.

Is the Nifty making an inverted head and shoulder pattern? Answer is: Yes. The neckline is sloping up, currently at 5700. A close above this number will confirm the pattern. I will give the chart on tuesday evening.

BIG UP MOVE IN NIFTY BRINGS INDEX ABOVE 5600 RESISTANCE

On Thursday, the Nifty made an NR7 day. In our letter we suggested that Friday may see a trending move and traders should follow the intra day trend. Friday’s big rally in the Nifty has taken the Index above 5600. It has also changed the trend of TA-Insync which we track to identify the intermediate trend. Now, the Nifty has broken out of the 5400 – 5600 range, this time on the upside. On Monday, the Index was trading below the range support of 5400. The Market has given two moves out of the range, first down, then upside break on Friday.

Will this breakout be sustained? The Nifty has rallied from 5350 to 5650 in just five trading days. After such strong moves, markets are likely to consolidate. We will wait for the process of consolidation. If the Nifty moves up after the soon-to-come consolidation, then the trend certainly changes to up.

Three days of gains, Nifty is now at point of breakout: will the Index move up?

The Nifty closed at 5522, up another 42 points, giving the index three consecutive days of gains. We can identify the resistance levels for the Index somewhere around 5550. If the Nifty were to close above this resistance, then we will have a breakout on the upside. The market is certainly giving many whipsaws, with periods of sudden optimism and pessimism. This is the nature of the trading range. When prices start moving up in the range, we have an impression that everything is going to be fine, see prices are moving up.
When prices start moving down, we get pessimistic – range will break down. What actually is going on is – just noise inside the range. A decisive trend emerges when prices move out of the range. Now, the Nifty did go below 5400 so we had a decisive breakdown of the range. Then what happened? Well, the index turned back, move above the half way mark at 5500 and is now currently higher than 5500. This raises the question: are we confronted with a false breakdown? With some regret, there is no clear answer to this question. The Market itself will tell us if the earlier breakdown was a false move. We have a pivot high identified earlier – 5535. A close above 5535 will give us a higher high. A close above 5600 will give us a confirmed breakout on the upside, but, then, even this can fail.
What happens if we have two failed breakouts - one on the downside, then one on the upside? Well, this would certainly be a choppy market – we have to accept such movements and hope that the choppiness will end soon.

Nifty Levels: Today (Thursday) was another NR7 day. We can usually expect a trust after NR7 days. Therefore, if the market begins to move up or down, go with the flow, chances are there will be a trending day.

Nifty rally continues, still in range

Yesterday, Tuesday, was an NR7 day. Today, the Nifty opened steady, then moved up throughout the day to close at the top of the day’s range. The message is: After an NR7 day, a trending moev can be expected. With today’s gains, the Nifty stands at 5480. This is within the original 5400 – 5600 range. We did see a pivot high at 5535 which means that the Index could now face resistance around 5535. Earlier we had a pattern of lower lows when the Nifty came down to 5348 just two days ago. If the Index closes above 5535 then we have a pattern of higher highs. This has not yet taken place, which means we are simply discussing what could come about if the Nifty rally continues.

Markets are certainly in some kind of a no trade zone. There are day trades on both sides – long and short. But, taking a position is not rewarding inside a trading zone. However, the Nifty did breakdown below 5400 and closed below this number for two days. Therefore, we have to take a bearish bias for the markets. Trading then is to be on the short side, with a stop above 5535. Remember that this is the cash nifty, not futures.

Locked in 100 point range, Nifty waits for direction

The Market is alternating between up and down days. After yesterday’s rally, the Nifty confounded all trend traders by actually faling down, closing today at the 5450 level.

The Nifty is now locked in a trading range between 5450 and 5550 – this is just a 100 point range, quite the narrowest range in many months. Traders should stay away, avoid trading inside this range. A close above 5550 will suggest a breakout on theupside while a close below 5450 will gie the signs of a breakdown. Just wait and watch. What about investors? Well, if the idea is to invest for at least 3 years, then the current levels are as good as, say, levels 10% lower. If the purpose is to obtain trading gains over the next few months, then buying is not suggested. The Nifty is in a bear market (the correction for the up move from 2200 to 6300, qualifies as a bear market). Lower levels

should come in, although we cannot say when.

What if we are wrong? There is no need to panic, since a breakout above 5550 will give us signals of buying, at least as a short term trade.
What about Japan, Crude, trouble in Bahrain, political problems in India, ….. ?
Well, the Indian market has withstood all of these issues. Thus, we should ignore the news and go with our charts. The charts tell us to wait for a range breakout, so, patience!

Nifty trading at its lower end of trading range

Nifty Watch:- Today Nifty opened at 5393 with a huge gap down of 159 points and touches its low at 5375. After that Nifty find some support from bullish and move up at 5504 with an increase of 129 points and finally closed at 5461 with a gain of 65 points to its day open.
Nifty remained in its large trading range (5400 to 5600). but trading at its lower end at 5400. This suggests that a breakdown below 5400 resumes the bear market.

Trend:- The short term trend is up. Below 5400 the short term trend will down. The Intermediate trend remains down. TA Insync (55-5) is has been in an uptrend. It is moving up at 32.37. Nifty is very near to its overbought level. This suggests that Nifty will move down very soon.

Level:- Looking for support first at 5500 and then at 5400 . Resistance comes at 5600.
Summary:- Nifty in a trading in a large trading range(5400-5600). Market is very choppy. We strongly advise investors to stay away the market.