Incisive Nifty Trend Analysis

[Anillal]

Anil, at times people holding divergent views may be right and in case of trading, the reason for it is that they are looking at different timeframes.

While most traders will be looking at a trend to enter for a day, days or maximum a week or two, there are bigger players who cannot commit hundreds of millions or a few billions in this timeframe. Marc Faber and the other big players, pension funds and hedge funds can outwait the trend, and hold their positions based on the fundamental understanding of their positions.

In a fascinating book ‘More money than God’s’ Tiger Fund Management a US 7 Billion dollar hedge fund using their research (site visits to mines, analyzing demand and supply) kept adding to their loss making position on Palladium for three years!!

Their analysis was that Palladium would be in short supply as the quantity that could be mined was limited but the use of the metal in catalytic converters to fix on cars (to control pollution) and in the field of dentistry would only increase.

Their bet proved them right and made enough money for them to offer to out the Russian government’s entire holding of US 4 billion holding of the metal during the Russian financial crisis. This I guess would be with leverage ofcourse.

Marc Faber (Ph.D in economics at the age of 24) also known as ‘Dr. Doom’ for his contrarian views is a successful long term investor who dares to go against the trend, was quoted by Mr. Prada on the long term impact of the stimulus measures, and he may be right in the longterm contrary to what we see happening now i.e markets reacting positively to the Fed’s action.

As a short term trader, for me to follow Marc Faber without his level of understand of the market and holding capacity, I would ofcourse be cleaned out in the time frame that I invest.

My two bits worth.

I couldn't agree more sir but no offense but going by the same token that a short time trader will be cleaned out then any kind of highminded, highTFed analysis would bear no fruit here as I don't see any member around here having that kind of money or wherewithal to think and act even one tenth like Mr. Faber to benefit in money terms from such analyses apart from some intellectual satisfaction. No pun intended but I see the majority of the members of traderji are daytraders either playing indices for few points a day or dreaming of buying a bunglow next to shahrukh khan's manat within a year.. And one doesn't need any analysis for such kind of trading, only googd MM and TA knowledge. The hard fact is if a trader haggles for cheap brokerage so that he can put 100 trades a day or waste time arguing over high transaction charges more than figuring out the ways to maximise the return on less trades per week then I am afraid to say that a gentleman of Mr Prada stature is wasting time here. And by the way if by any way I came across critisizing Mr Prada personally in my posts then I apologise. I am critical of his views but not him. He seems a thorough gentleman and I respect that.

 

[murthyavr]

I couldn't agree more sir but no offense but going by the same token that a short time trader will be cleaned out then any kind of highminded, highTFed analysis would bear no fruit here as I don't see any member around here having that kind of money or wherewithal to think and act even one tenth like Mr. Faber to benefit in money terms from such analyses apart from some intellectual satisfaction. No pun intended but I see the majority of the members of traderji are daytraders either playing indices for few points a day or dreaming of buying a bunglow next to shahrukh khan's manat within a year.. And one doesn't need any analysis for such kind of trading, only googd MM and TA knowledge. The hard fact is if a trader haggles for cheap brokerage so that he can put 100 trades a day or waste time arguing over high transaction charges more than figuring out the ways to maximise the return on less trades per week then I am afraid to say that a gentleman of Mr Prada stature is wasting time here. And by the way if by any way I came across critisizing Mr Prada personally in my posts then I apologise. I am critical of his views but not him. He seems a thorough gentleman and I respect that.

Dear Mr Anil,

Perhaps.. in the process of conveying your regard towards Prada, you have
not hesitated to throw an insult over a 'majority' of traderji members - who
according to you are trading indices for a few points, day dreaming and
arguing with their broker over transaction charges..

Is it necessary that you convey your opinion on the 'majority' in order to
make it clear to Prada that you like him?

Please think of it.

 

[SEVEN STAR]

Dear all friends i thank u all
i just quit because my views/messages posted here apparently disturbed some because i contradicted Mr. Prada's view points and that made them to ask me to start a new thread n some gone to the extent of pleading me not to post anything here in future ...in that contest i thought it is high time to stop posting and good to be a silent spectator.. i am not disturbed by any of the messages against me by some of the members here in this thread or elsewhere too......
I have no problem posting my honest view points .. Thank u.

 

[Anillal]

Dear Mr Anil,

Perhaps.. in the process of conveying your regard towards Prada, you have
not hesitated to throw an insult over a 'majority' of traderji members - who
according to you are trading indices for a few points, day dreaming and
arguing with their broker over transaction charges..

Is it necessary that you convey your opinion on the 'majority' in order to
make it clear to Prada that you like him?

Please think of it.

That is misunderstanding sir. Still my thousand apologies. However I must add that what you see as insult is just a fact when you take into context the matter being discussed. First let me clarify that majority doesn't mean below par. It is just a term based on given relative number of people doing something common. Second let me assure you that if I were a daytrader or trading highly liquid nifty or banknifty I wouldn't even look at any kind of long medium or short term market analysis. No preconception in mind. Just 60 min chart for direction and 5 min chart to trade and that is it. That would mean few points per trade. Rather I would go for fewer points than most of the traders and also I would be putting more trades per week which to me is logical when trading indices, and for which I will be at the forefront of any demand of low brokerage and low transaction charges. But as I see haggling over this and that charge as waste of time and I value my time and health more than money that would definitely come with more trades, so that is why I don't daytrade or trade in high beta stock or indices. My point is that one should be honest to oneself about one's limits and capabilities and maximise on those. I was going through ST sir's posts last week and in one post he wrote something like that for him the max TF is EOD. Now this is honesty to oneself and one's style of trading. Judging by his posts he must be an excellent trader who is happy and comfortable with his trading system. By the way if perhaps you could see the way sometimes I take on a high risk trade with risk running above 15% of my equity I am sure I would be judged as a mad gambler bent on killing himself!

 

[saivenkat]

Dear all friends i thank u all
i just quit because my views/messages posted here apparently disturbed some because i contradicted Mr. Prada's view points and that made them to ask me to start a new thread n some gone to the extent of pleading me not to post anything here in future ...in that contest i thought it is high time to stop posting and good to be a silent spectator.. i am not disturbed by any of the messages against me by some of the members here in this thread or elsewhere too......
I have no problem posting my honest view points .. Thank u.

This is been the nature.. not only in TJ.. and in many forums i have seen.. when u come up with a different view..or else if, one's stand point is different.. then you quite naturally (compelled to !) turn on to a Silent observer..

 

[Reggie]

Thanks Mr. Prada for your apt observation. I had read about this market behaviour long back and it was somewhere in the back of my mind and resurfaced when I read your post.

I have not been in the market long enough to experience these market cycles and phenomena personally. So for myself, am keeping a note in mind that when the mid-caps peak up and explode in this bull run it is a warning sign of the bull heard heading to the edge of the cliff, and time get off.

@timepass, the fact is that generally midcaps and the smallcaps play a catch up once the move in the large caps are done with. This happens when the market is peaking out and when only retailers(as usual the latecomers) are present in the market.

 

[SEVEN STAR]

My observation is that this up trend to continue have no doubt in it..if there is any gap up again on Monday price less than spot nifty 5618..i would sell all my long position which was initiated around 5220 and take up small short position with sl of 5618 spot not on closing basis once it crosses i will surely cover my shorts
i will be adding my long again if spot nifty come close to 5510..5460 levels and will watch 5550 fut. closely..

Finally i am not a tips provider n have no motive to promote my self interest for any monitory benefit here in TJ. ..n the thanks to my posting is no meaning to me if my message reaches to some who can take advantage to trade and make some financial gains that would be more satisfactory to me than anything else.
This is my sincere Request to all please ...please do not fallow any business TV news Chanel's...
To Make consistent profit and to be a prof. trader require lot more than to say thanks to the message posts by SEVEN STAR.. or any of your favorite Gurus..ultimately how best one used the message to their fever to make gain......is the ?
Mark my word trading and earn something out of it is not an easy task
i knew very well there are untold stories about the so called market experts who have never made profits ....in this great game of trading ...any one can post charts and levels and so on..
if there is any rule that all that what ever the great annalists said have to be fallowed by their trading snap shorts i doubt you find hardly few in this forum to post their views ..........:thumb:

 

[umesh12]

My observation is that this up trend to continue have no doubt in it..if there is any gap up again on Monday price less than spot nifty 5618..i would sell all my long position which was initiated around 5220 and take up small short position with sl of 5618 spot not on closing basis once it crosses i will surely cover my shorts
i will be adding my long again if spot nifty come close to 5510..5460 levels and will watch 5550 fut. closely..

And if the gap up opening on Monday is above 5620, then one should remain long or should short?
Thanks

 

[SEVEN STAR]

And if the gap up opening on Monday is above 5620, then one should remain long or should short?
Thanks

will not take any fresh position if that happens except sell all my earlier long positions........( i am no at all comfortable buying above this price at least for now) ..
to short sell will wait n look at intra day chart for weakness on Monday if the price start above 5618.

 

[SEVEN STAR]

Business Line published today (on Sunday).. similar to that of my views posted earlier

The Nifty (5,577.65) too took off on Friday to end the week 218 points higher. The third leg of the sideways move from December 2011 appears to be unfolding now. This move has the next target at 5,869.

But investors need to stay wary of the resistance at 5,645 that occurs at 61.8 per cent retracement of the prior down-move.

Since the January rally came to an end at 5,630, the entire zone between 5,600 and 5,650 has to be treated as a potential minefield.

If we consider the target of the third leg of the rally from 4,770 trough, we get the targets at 5,610 and then 5,967. In other words, the rally could halt between 5,600 and 5,650. If 5,650 is crossed, there could be fireworks.

Short-term supports will be at 5,446 and 5,357. Traders can hold their long positions as long as the index trades above the first support. Key medium-term support is at 5,275.