Analysis of charts - discussion share ur views

[SwingKing]

Hello friends
I am posting here the chart of nifty for some clarifications.



Apart from the clarifications that i have asked in the chart, i find that Fib retracement has completed 61.8% and even made a break out at 79.2% level of 5083. Other than this i find that ADX is still looking good. Friends,shall we take that nifty has given a up move, giving weightage to this kind of indicators?

or shall take it as down move, when i look, MACD having -ve divergence, and also i here some friends here, specialized in elliot wave theory saying the 5TH WAVE FORMATION is complete, and reversal is about to start.

In short with the indicators suggesting different things, i would like to ask here, two things. A) What strategy to adopt in these situations?
B) Have i come out with a correct decoding of the chart with the help of the indicators that i used here? Please correct me if i have made mistakes.

Thanks and Regards
Saivenkat

In reply to your post, please read the following.

1. Fibonacci retracement - It is true that the retracement has been completed for 61.8 % level. But does this mean that the prices won't retrace 100% or beyond ? Well, certainly not. I'd advise you to look at fibonacci levels (for potential resistance levels) if you still believe we are in a down trend. With interest rates still remaining low (will continue to remain as indicated by the Fed) and stimulus still being in place, I seriously doubt whether we will still collapse to new lows. Signs of recovery are appearing (although slowly) and for our country, the signs are even prominent.

2. Indicators - Well, I hope my image gets uploaded (else I will post the link separately). Kindly see, that MACD histogram has not diverged to levels where one should be skeptical. ADX and momentum indicator is still positive with minor divergence happening only in RSI. Stochastic shows no signs of divergence either. MACD histogram still appears to be very healthy and in support of the market. In a long time, such robustness has appeared on markets.

3 Elliot Wave - Well, historically, Elliot Wave has worked the best in longer term. In shorter term, I would not recommend using (or else front guessing price levels) elliot wave. If rest of the indicators are in place, then don't be too bothered about elliot wave. If reversal has to happen, it will happen in due course of time. Do not anticipate the reversal, let it present itself to you.

Your analysis seems nice. As far as your strategy is concerned, STICK with the trend till it shows any signs of wearing out. Do not ANTICIPATE the future direction.

Hope this helps.

 

[vishalalluri]

But does this mean that the prices won't retrace 100% or beyond ? Well, certainly not.
I'd advise you to look at fibonacci levels (for potential resistance levels) if you still believe we are in a down trend. With interest rates still remaining low (will continue to remain as indicated by the Fed) and stimulus still being in place,
I seriously doubt whether we will still collapse to new lows. Signs of recovery are appearing (although slowly) and for our country, the signs are even prominent.



Hope this helps.

i feel the same about markets and have a good belief on a uptrend intact

any small corrections till 4500 also shudnt disturb me


perfect t

 

[vishalalluri]

hi friends
posting a chart of areva good adx levels and rising rsi

cromptongreaves also showed some good movment today

 

[saivenkat]

Thanks Vishal, Raunak Agarwal, Colombus for giving me a healthy and strong input.
Take care.
Regards
Saivenkat.

 

[saivenkat]

Hello friends
I am posting a chart that i have made with bank nifty and sbi. After a long try i tried clubbed the two charts in to a single chart for better and easy understanding. Wow, what a surprise that every move of sbi is in coherence with that of bank nifty, meaning by it is the leading indicator in that index.

Friends, as usual.. correct me what mistakes i have made in my way of analysing the charts.

Regards
Saivenkat.

 

[bunny]

@Saivenkat,
Can you please write the text in the post instead of posting it below the chart? Its difficult to quote that text.

SBI is a leading indicator for this index

Most of the indices follow the same action as their constituent. Overall, if one wants to trade, you need to know only one thing: If the market is strong it weak. If the market is strong, you can buy any of the popular fore-front stocks. If the market is weak, you can sell.

Alas, its not so simple to know when the market is strong and weak. Have you ever seen those snake-oil salesman on CNBC or other market channels? Whenever the NIFTY is up by 150 pts in a day they say market is weak, and when the reverse happens, they say market is strong. This type of analysis is pointless and at the same time useless as well! What the use of saying that after the move has occurred?

 

[vishalalluri]

hi friends
posting a chart of areva good adx levels and rising rsi

cromptongreaves also showed some good movment today

areva t&D at cmp 299 high 306

crompton greaves cmp 406 high 409

happy with my positions one sad thing i could not participate intresting last 2 sessions

 

[vishalalluri]

hi friends

another interesting stock wanted to post a chart

primefocus
out from a a bollinger squeeze a strong resistance of 219 also broker which had been tested already 4-5 times

 

[columbus]

hi friends

another interesting stock wanted to post a chart

primefocus
out from a a bollinger squeeze a strong resistance of 219 also broker which had been tested already 4-5 times

Some violent movement last two day.Fundamentally OK
share.

 

[bunny]

hi friends

another interesting stock wanted to post a chart

primefocus
out from a a bollinger squeeze a strong resistance of 219 also broker which had been tested already 4-5 times
http://img527.imageshack.us/img527/8304/2009decprimefocuslimite.png

IMHO, some operator is dumping his shares. Look at the volume. Its ultra-high. the spread on the bar is wide. Similar bars occur also occur when a bullish operator is pushing up through supply/resistances. But, in those cases, there is a single bar that is pierces the resistance.

Also, 2 bars earlier (27 Nov 2009), we have what is called a failed test of supply. Observe the volume. For a successful test of supply, the volume should be low. One should now expect one of these:

• Upthrust, over one or two bars.
• Immediate wide spread down bar
• Narrow-spread up-bar

Ideally, one should not enter until its volume is assessed on a down day. However, since the floating volume of this very low, it would be advisable to stay away from such pump-and-dump low-volume scrips.