Nifty: Daily Price Analysis

[SwingKing]

Nifty Weekly Price Analysis: 8th August 2010

Market's have a tendency to do same things over and over again. However, every time it finds new routes to do those things. This is something we need to understand and include it in our trading plan. The reason I am writing this is because markets are testing the patience of most of the traders. I find it hard to recollect when in the past markets have been so indecisive. I can recollect the period of 2003 when markets trended up and were due for a correction. Correction came only in May 2004 surprising everyone. Currently, markets are trading extremely weak but still it is continuing to rally. I find it hard to believe that this scenario is going to last for long. It is almost the 3rd consecutive month I am so bearish, but in my defense I have found nothing to suggest otherwise.

As a trader, I still maintain bearish positions in the longer time frame and long positions in the shorter time frame. The time for short term trades seem to be running out soon as the larger time frame begins to take effect. Technically and fundamentally we are on sticky grounds. We need to see if this situation improves or worsens. My bet still remains on the bearish side.

Tc

 

[linkon7]

Another week of doing the same thing again... we remain clueless about the direction... Charts remain open to debate with some forecasting 6000 by year end while others feel 4500 is on the cards...

A look at the daily chart with profile of the weekly values shows that we continue in the narrow range of 5459 to 5376.. with excess on either side being rejected... this is the 4th week in a row of trading the narrow range...

Previous 4 weeks also had the same pattern... range expansion is upwards but the "follow up to the expansion" is totally missing... Only issue now is that this block has the narrowest value area...

FII continue to be in the buy side while DII are on the sell side....

There is total decoupling with the global markets and i seriously dont know if that's a good thing...

Options premium suggest a shift of range on the up side... But despite market moving higher... conviction on the long side is missing... As people dont know if buying high and selling higher is a good idea any more...

Options premium is so low...that its scary to sell them as a 2-3% move on either side can kill you.... But Buying them is killing as well as the daily move is restricted to less that 0.5% and constant churning in both direction only ends with loosing premium with time...

trend exist only in 5min and lower TF... higher Tf are getting whipped like crazy... as markets tend to move only in the last hour of trade and its followed up by a reversal the very next day....

I would look for a close below the 5370 mark on eod basis and then a follow up action on the next day to take any action... as of now..up side trend appears weak and a close above the 5460 mark didnt really scare the bears into covering their positions...

 

[rajputz]

I would look for a close below the 5370 mark on eod basis and then a follow up action on the next day to take any action...

Totally agree with you linkon Sir.
Mere muh ki baat cheen li apne.

P.S. - Only the last quoted line as i feel the same. Not the options premium etc etc. That goes over my head. :lol:

 

[SwingKing]

Whether one take's Market Profile, Indicators, Price action, Fund action or Intermarket action, all are basically suggesting one thing; Confusion

But when I look at the volatility indicators, I find it very very hard to believe that expansion in range lies on the upside. Options data or FII data can change in a day's time and hence reading too much into it would not be of much value.

I belong to the Larry Connor's school of thought. I believe that essentially volatility is what drives our trading accounts. And to some extent there is less happening in terms of price action but a lot happening in terms of volatility. Volatility based projections are suggesting a price rise of maximum 100-150 points from these levels.

Let's see what actually happens.

Tc

 

[linkon7]

We managed to close near the high today... and buying was seen at higher levels today... maybe this is the week we break 5500 but what i found very surprising is that 5600 call was trading at 18 and it never inched higher...

relatively 5300 put have more premium than 5600 call...

Advance decline ratio was supportive of the long... but that mad rush to buy is totally missing...

 

[cool_kk]

We managed to close near the high today... and buying was seen at higher levels today... maybe this is the week we break 5500 but what i found very surprising is that 5600 call was trading at 18 and it never inched higher...

relatively 5300 put have more premium than 5600 call...

Advance decline ratio was supportive of the long... but that mad rush to buy is totally missing...

I am also on these two levels
Sold last week 5600 call and 5200 put

Also for september I sold 5700 @ 47 . so let's see where market goes.
5500 break on cars
Next week Monday market should be volatile.
US CPI is on friday.. expecting some downside... tomorrow japan CPI and bank rate.

Indian markets are showing non-linear with world markets..
Showing long pattern why,, can't say..
Thanks
Kaps

 

[simple_trader]

We managed to close near the high today... and buying was seen at higher levels today... maybe this is the week we break 5500 but what i found very surprising is that 5600 call was trading at 18 and it never inched higher...

relatively 5300 put have more premium than 5600 call...

Advance decline ratio was supportive of the long... but that mad rush to buy is totally missing...

I always feel, if PUT is commanding more premium means, it is to be written. But now situation is different. Also PUTs are not so expensive like previous series. PUT will be interesting once NIFTY trades above 5500 (for buying i mean).

Happy Trading!

 

[AlokTewari]

We managed to close near the high today... and buying was seen at higher levels today... maybe this is the week we break 5500 but what i found very surprising is that 5600 call was trading at 18 and it never inched higher...

relatively 5300 put have more premium than 5600 call...

Advance decline ratio was supportive of the long... but that mad rush to buy is totally missing...

Mad rush is missing because retail money has been waiting in hope of correction to get in the market but smart money has not allowed any correction for retail money to get in so far. Now with Nifty approaching 5500, retail money will start thinking that they have missed the bus so they will try to get in the bus in a hurry at 5500 - 5530 levels. That is what smart money wants. Someone to buy at those levels from them. i feel 5530 level is to get off the bus rather than get in. If you are not already in the bus, try getting in by PUT way around 5530 levels rather than buying stocks, futures, calls or NF.

Cheers !!!!

Alok Tewari

 

[linkon7]

there is some good news....:clap:

This Monday... if we stay in the green rectangle..we can celebrate 2 months of ranged movement....:clapping:

At least volatility is back...

 

[simple_trader]

there is some good news....:clap:

This Monday... if we stay in the green rectangle..we can celebrate 2 months of ranged movement....:clapping:

Volatility is a bit up in last 2-3 days though!