BraViSa TempleTree-India Market Calls

d_s_ramesh

Well-Known Member
Gap up

Markets set to open Gap up, Energy sector to lead. Basic material to rebound along with Industrials. US Indices have closed pretty strong registering close to 3% gains on all the indices. As we follow the US indices very closely, at least on the open, NIFTY is likely to breach 5100 resistance with force.

Shorts almost out of the market, its only the strength from the bulls that is going to push the Index up. We are in for a positive closing on the weekly charts. It will go on to record a third straight week of up close. Will it change the broad market trend to bullish? Hardly seen, sideways markets to continue for few more weeks with a more broad range.
 

d_s_ramesh

Well-Known Member
Gap up opening as expected, NIFTY opens into a new bullish trend on the hourly chart. Swing traders await signals for trading long. Value zone is quite far away at 5046 moving at a speed of 12 points per hour. The likely intersection levels are somewhere in between. Will NIFTY hit the EMA junction which is fast approaching its price?

If the ensuing bullishness gains further strength, it is not likley and NIFTY will move parallel to its averages. We trade only after intersection and wait till that happens. Swing traders keep a close watch on the price moves.
 

d_s_ramesh

Well-Known Member
A higher high on the NIFTY and along with it the speed of averages increases too. Trend gets further strength. Value zone at 5057 at 11.00 am, our long position on trend system nears 100 points gain. This is open profit, give backs eminent. Swing trades need to wait for pull backs.
 

d_s_ramesh

Well-Known Member
NIFTY closed flat at 12 noon, speed of EMA at 10 points. Value zone @5067, intersection still far away. Trend gains more strength. Trend positions hold on to long positions till next signals are generated by the charts. We trade the charts as they pan out, no predictions, it is only probabilities that we state here.
 

d_s_ramesh

Well-Known Member
NIFTY starts to attract magnetism towards averages; it has showed a knee jerk reaction in price towards the close of the current bar. Value zone at 5072, yet far away from current price. There is a possibility of intersection in the coming hours, but the pattern should have a clear flow unlike holding to higher levels again.

Trend trades hold on to stops as the position is safe so far. Swing trades need more wait.
 

d_s_ramesh

Well-Known Member
Value zone moves up to 5080, but price rallies towards high's. Speed of EMA comes down to 6 points. Entries for swing trade seems to be muted. Number of trending stocks on the NIFTY component list increases to 32 giving a 64% trending index at present.

Trend positions hold on to stops till charts give reversal or exit signals.

*Slowing down in the speed of the averages tells us that the market is taking a breather from the prevailing trend.
 

d_s_ramesh

Well-Known Member
NIFTY moves up without retracing to value zone and is close to previous high levels. Value zone moves up to 5086. With price hovering around 5110 levels, the likeliness of it reaching or intersecting with the averages seems bleak for today.

Todays high shows a double top on the hourly charts and NIFTY turning down from 5138, which is just a few ticks higher than 5135 recorded on the previous move gives signals that this up move is likely to turn around.

As we have stated earlier, NIFTY holds a broad range of 5150-4950, it has moved close to resistance today. In case the markets turns down from here, it needs to close below 5065 levels from the present chart readings. If this has to happen there should be a big gap down open on Monday. What is the possibility?

Though the difference between the prevailing price and the indicated reversal levels are higher, an adverse move may not be ruled out. The markets at the present juncture do not have a smooth flow of price & movements.

Europe at present shows shallow moves, but US markets will decide the direction later in the evening. Probabilities stay leaning towards bearishness from here. This comes to the end of another awe filled week which faced whipsaw trades and high volatile moves, still closing positive for the week.
 

d_s_ramesh

Well-Known Member
NIFTY range gets fat..

Range of NIFTY for this week stayed almost within the previous week making a visit close to both high and low. Price tests range high and close within. Both daily and weekly charts are continuing their sideways range pattern. Charts show that this tight range pattern is likely to continue for few more weeks unless some disturbing news adds steam and makes it break the bottom. With weekly charts already into a very strong bearish divergence any bullishness from here is likely to fade into a false move, which would suck in weak hands.

The zig-zag pattern on the daily extends on both ends with every new hit, broadening range pattern is not good for trends, it will prolong for a greater period. MACD histogram which is above zero lacks any strength and mostly follows the price. Todays high was close to the top of the range where NIFTY lost strength and gave in to close lower. Bulls seem to have exhausted their energy in managing to pull NIFTY above resistance. 26 stocks in the NIFTY component list is trending today, though it is well above 50% only 5 stocks are in a strong bullish trend, while 2 of them are in a strong bearish trend, the balance of 19 stocks which are trending are tired ones. 24 stocks or 48% of the Index is indecisive and 38% are tired. This is the reason the index is pulled on both sides and global peers are influencing its moves.

Hourly charts which opened into a very strong bullish trend got sick by the time it reached the previous top on the hourly. NIFTY futures just managed to cross previous high, but those who had a close watch on the movement could have seen a knee jerk reaction when NIFTY failed at 5138. It suddenly lost ground and tumbled down but could not manage to reach value zone but, again took off only to be within the days range.

At the time of this writing US markets well within an hour into trade is flat, Europe seems to close with not much gains, and Gold is gaining. All these are indication that something underneath is losing balance. Will they hold on to strength and pull up or give in to bear onslaught. Last Friday it was almost a similar pattern, US markets gave in to a very strong bearishness towards close. Today????

This much for the weekly summary, we will post more of NIFTYs probabilities after US markets close.

Happy weekend.
 

d_s_ramesh

Well-Known Member
NIFTY & Sector Weekly round up

Weekly trend of the NIFTY chart is non-trending, price is coiling between averages. Lets look at the strength of NIFTY on the weekly chart using the strength of its component stocks.

Trending Long 17 stocks or 34%
Trending Short 9 stocks or 18%
Non-trending 24 stocks or 48%

It is interesting to note that close to half of the representative stocks from the NIFTY component list is non-trending, adding weakness to the index on the bullish side is that none of the 17 stocks which are trending long are strong. All the stocks in the long trend have a clear bearish divergence and are having a flat movement at the higher levels. The 18% stocks that are trending are stronger than the long trending stocks, but the number is less to give any direction to the index.

This is the reason that we are having indecisive moves on the index. This is a rare occurrence which comes once both the bulls and bears have enough for their share. Both have had enough food and are now resting, it needs to drain out unwanted energy and that will take time. WE are going to witness a prolonged bear more on the index on the weekly time frame.

We have had similar patterns in the beginning of 2008. But, then it was a shift from the bulls to bears. Bulls were full stomach and bears were starving without any bearishness in the market. Now the situation is different, both are full stomach. Similar moves have occurred in the 2000-2004 periods of the index chart. This is a great revelation, we suspect that his non-trending move is to prolong for few years. Global scenarios too vouch strongly in favor of this thought.

When longer time frames do not have trends, we can make good winning trades only on the lower time frames and even there the ratio would be fairly balanced with both winning and losing trades almost being the same. So, the days of high profile gains from the stock markets is over at least for the time being. This does not mean that the markets are going to die. Never is it going to happen, there will be a radical shift of sectors. Underperformers may emerge are leaders.

One more issue here is that out of the 10 broad sectors into which any economy is divided into, only TELECOM is underperforming now. It means when the equilibrium changes direction we will have only one or at the most 2 sectors (UTILITIES which are flat now along with energy may turn up, both these sectors are reeling under non-renewable resources & lack of new discoveries) may change to be out performers. While most of the other sectors will turn down. Only 2 or 3 sectors going up with some turning sideways , the major tilt will be on the bearish side.

Global economies, the major ones like the US and UK are in the brink of default, though they may brace up by printing more currency, because of their clout in the global financial arena, the damage they are likely to face is going to send the financial world into dismay. Small players in the markets, please beware. Do not get lured by the gains which the markets showed in the current decade to continue at least for the coming decade.
 

d_s_ramesh

Well-Known Member
GAP up.. up up & up.

NIFTY gapped up today on opening, thats good a gap in the direction of the prevailing trend is an advantage to the market. Now that the resistance is broken with strength, what next? Next resistances on NIFTY is at 5185-5210 levels, with the MACD rising higher and higher on ever incoming hour, there is a possibility of giving a peak which will lead to further strength on the bullish side for the market. Well that is real good news, right. Trend traders holding to long position from 5035 have seen a peak gain of 125 points now, great going.

The value zone presently at 5100-5073 levels makes our long trade safe. Swing traders need to wait for retracement to value, price needs to move into the value zone drink some energy tonic and then move up from its strength. Some times it happens that the market keeps moving higher and higher without reaching value zone, when it finally comes down, it will be totally exhausted and give some whipsaws before changing direction.

What is in store for us in this trade is not known, we are trading our beliefs and charts. At present the probabilities are in favor of the bulls on the hourly time-frame. Enjoy bullish profits.
 
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