Insight into why the NIFTY is probably heading down
- Thread starter SwingKing
- Start date
What should be done 2morrow between these.Raunak, Nice analysis of NIFTY big picture. You have certainly put few pieces of jigsaw togather to come out with this view. I can also include more fundamental, statistical, technical, psychological reasons to it (but lets leave that aside). I do share your view of caution at top, and be ready for any eventuality.
As market needs buyer and seller to function, people of opposite view are required. Not surprised that same is shown by posts in this thread as well. And still possible that both people will make money cause they have different timeframe in mind.
My current approach is to be aware of big picture and Trade what I see on chart. When direction of trade is against the big picture, my opportunities are limited but when they are in synch.. i have better opportunity. Accordingly I know when to go aggressive and when to go slow.
Current trend is still up, no doubt about that. All lagging indicators are indicating that.
But hidden signals, contrarian indicators, divergences are telling different story.
It is said that market goes up thru stairs and comes down by lift, or jumps from window.
Just look at the slope of few correction since 2008 and get the answer yourself.
We can never know end of bullish wave i.e. wave 5 of elliot wave, so lets trade carefully without getting biased.. and wait for opportunity. So trade what u see and listen to the market.
Happy Trading
As market needs buyer and seller to function, people of opposite view are required. Not surprised that same is shown by posts in this thread as well. And still possible that both people will make money cause they have different timeframe in mind.
My current approach is to be aware of big picture and Trade what I see on chart. When direction of trade is against the big picture, my opportunities are limited but when they are in synch.. i have better opportunity. Accordingly I know when to go aggressive and when to go slow.
Current trend is still up, no doubt about that. All lagging indicators are indicating that.
But hidden signals, contrarian indicators, divergences are telling different story.
It is said that market goes up thru stairs and comes down by lift, or jumps from window.
Just look at the slope of few correction since 2008 and get the answer yourself.
We can never know end of bullish wave i.e. wave 5 of elliot wave, so lets trade carefully without getting biased.. and wait for opportunity. So trade what u see and listen to the market.
Happy Trading
Thanks for taking the post the right way.
This is exactly what I was trying to convey. Stress is definitely there and this is the time to watch and proceed. The 'Buy' and 'earn for sure' phase is certainly nearing its end as depicted by elliot wave analysis. When this actually materializes into action is something no one can say. Historically if you see, whenever a reversal has taken place, there has always been time to offload long positions and build short positions. It is our psychological barrier that prevents us from doing so. A broader picture of market will certainly help one clear those barriers. And that's what I have attempted to show. I have offloaded about 80% of my positions. Keeping just 20% in the market. As of now I don't have any short positions, but will definitely build once I get the slightest of the indication from the markets.
Tc.
This is exactly what I was trying to convey. Stress is definitely there and this is the time to watch and proceed. The 'Buy' and 'earn for sure' phase is certainly nearing its end as depicted by elliot wave analysis. When this actually materializes into action is something no one can say. Historically if you see, whenever a reversal has taken place, there has always been time to offload long positions and build short positions. It is our psychological barrier that prevents us from doing so. A broader picture of market will certainly help one clear those barriers. And that's what I have attempted to show. I have offloaded about 80% of my positions. Keeping just 20% in the market. As of now I don't have any short positions, but will definitely build once I get the slightest of the indication from the markets.
Tc.
I am building up Feb/Mar shorts position with my low risk option entries with Reward risk ratio of 3:1+. Once my views are confirmed by market, I would go aggressive. If I am proven wrong, no problem cause I am trading the odds and reward risk ratio.. Not here to be right in all trades.
Happy Trading
Happy Trading
Please dont get me wrong and i dont mean to offend you either...have a little experience trading patterns,i am not sure if the second is a asc.triangle....even the first one calls for a second thought as welll.....
all the best.
all the best.
I feel markets are headed down in the shorter term. And here's why.
1. Ascending Triangle 1 - Markets had formed an ascending triangle from June to September and eventually broke out from it to rally to new intermediate highs. During this formation, the momentum and strength of the market was extremely strong (refer to Momentum indicator and the RSI). However, when the market broke out of the triangle, the momentum and strength of the market weakened as compared to the July-August levels. Market made a new high and there was evidence of divergence visible.
2. Ascending Triangle 2 - Markets have agained formed an ascending triangle between November and December and have broken out from it yesterday. However, there are quite number of things to be noted here. Firstly, the momentum and strength of the market is now weakest when compared to July - August and ascending triangle 1. The divergence has now extended from Mid August to present. Secondly, historically it is quite known that triangles have a 50-50 chance of succeeding and failing. It is also very rare that two triangles have been formed back to back with no failures in between. The odds of two successive triangles giving valid signals is very rare. Lastly, look at the breakout carefully. Triangle one broke out with NIFTY notching up 2.2% gain on that day. Whereas triangle 2 breakout has been accompanied with double DOJI and a probable EVENING STAR (Major reversal pattern, have marked it with a circle).
3. Price Projections - If you take the bottom B and project the price upwards, then the current level falls exactly between the 50 -61.8% retracement. Today the markets rejected this level and fell down to 5282. The probability of price projections have to be weighed in with the uncertainties ahead (interest rates, budget, global market correction, quarterly results).
4. Cyclic Analysis - If you take the two major top's Z and B, then the current time frame lies exactly in between 50 -61.8% retracement cycle. Which means even time wise we are due for a correction. Again all the uncertainties mentioned above should be factored in.
5. Trendline - If you visualize a trend line from point A to C, then the chances of trendline being broken looks good if the markets start to correct. I have purposely not drawn the trend line as I did not want to clutter the charts with too much information.
It is indeed very rare when Price patterns, Price projections, Cyclic analysis and the surrounding uncertainties fail together. If they indeed do, then that's the beauty of STOCK MARKET guys.
Tc.
1. Ascending Triangle 1 - Markets had formed an ascending triangle from June to September and eventually broke out from it to rally to new intermediate highs. During this formation, the momentum and strength of the market was extremely strong (refer to Momentum indicator and the RSI). However, when the market broke out of the triangle, the momentum and strength of the market weakened as compared to the July-August levels. Market made a new high and there was evidence of divergence visible.
2. Ascending Triangle 2 - Markets have agained formed an ascending triangle between November and December and have broken out from it yesterday. However, there are quite number of things to be noted here. Firstly, the momentum and strength of the market is now weakest when compared to July - August and ascending triangle 1. The divergence has now extended from Mid August to present. Secondly, historically it is quite known that triangles have a 50-50 chance of succeeding and failing. It is also very rare that two triangles have been formed back to back with no failures in between. The odds of two successive triangles giving valid signals is very rare. Lastly, look at the breakout carefully. Triangle one broke out with NIFTY notching up 2.2% gain on that day. Whereas triangle 2 breakout has been accompanied with double DOJI and a probable EVENING STAR (Major reversal pattern, have marked it with a circle).
3. Price Projections - If you take the bottom B and project the price upwards, then the current level falls exactly between the 50 -61.8% retracement. Today the markets rejected this level and fell down to 5282. The probability of price projections have to be weighed in with the uncertainties ahead (interest rates, budget, global market correction, quarterly results).
4. Cyclic Analysis - If you take the two major top's Z and B, then the current time frame lies exactly in between 50 -61.8% retracement cycle. Which means even time wise we are due for a correction. Again all the uncertainties mentioned above should be factored in.
5. Trendline - If you visualize a trend line from point A to C, then the chances of trendline being broken looks good if the markets start to correct. I have purposely not drawn the trend line as I did not want to clutter the charts with too much information.
It is indeed very rare when Price patterns, Price projections, Cyclic analysis and the surrounding uncertainties fail together. If they indeed do, then that's the beauty of STOCK MARKET guys.
Tc.
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