Nifty: Daily Price Analysis

[SwingKing]

Late recovery today did put us in a more comfortable position as compared to other global indices. Today's session also marked a hammer formation. Hammer formations usually don't require confirmation. But since this hammer was not formed around a support level, we would like to see confirmation going forward. Level 5080 as mentioned did hold out strongly. Going forward this remains crucial. At the time of writing, global indices were in for another choppy session and if we are to follow them tomorrow, my sense is that we will still manage to close above 5050.

The trend channel highlighted in the previous posts remains confirmed and needs to be monitored in the sessions going ahead. Weakness within the other indices does indicate that we may ahead lower going ahead but the lower levels will take few sessions to form. Market usually don't move in straight lines and hence some retracement from current levels cannot be ruled out. Long positions as of now is not advisable. And those willing to go short should wait for some kind of retracement before they enter.

 

[SwingKing]

Another weak session for the market and another day of relative out performance when compared to global indices. Yesterday I had mentioned that Nifty would close above 5050 and today that opinion held its course. Todays session also confirmed the hammer formed on 5th May. I would have been more convinced towards a upward retracement had yesterday's low not been violated today. Since the low got violated, I feel we could see lower levels either tomorrow or on Monday. We have also not had a typical 'panic' day which we have in such corrections and I do expect to have a panic day in sessions ahead.

The trend channel highlighted earlier has now been modified and is depicted in the chart below. This broader range should be maintained going ahead. Global indices especially in Asia have corrected 5-7% whereas India has not corrected that much. We could see our index catching up with the correction spree. As of now though, the situation remains shaky. Volumes have been good on the downside and any significant retracement should be used to build short positions.

 

[YogeshD2010]

Hi Raunak,

Thanks for the daily nifty trade.

what's the 7th May nifty trade.

Regards,
Yog

 

[YogeshD2010]

Hi Raunak,

i did some study in above graph u added , which shows that the trend of nifty having up trend & it fall after each interval.

if you create a line which is touching nifty bottom line show's coming nifty will come down till 4820-4830.

Can you help me ...how to add jpeg or bmp file in this, so i can add i created the graph.

Also i want amibroker software. currently i am using Quote Tracker.


Thanks in Advance,
Yog

 

[SwingKing]

Hi Raunak,

i did some study in above graph u added , which shows that the trend of nifty having up trend & it fall after each interval.

if you create a line which is touching nifty bottom line show's coming nifty will come down till 4820-4830.

Can you help me ...how to add jpeg or bmp file in this, so i can add i created the graph.

Also i want amibroker software. currently i am using Quote Tracker.


Thanks in Advance,
Yog

Dear Yog,

1. Amibroker is available at www.amibroker.com.
2. Go to this thread if you want to see how to upload images http://www.traderji.com/announcements/22138-how-post-chart-image-traderji-com.html
3. The broader trend of the market is still up. We have had a good amount of correction (5-6%) as of now. We have to see whether this escalates further. As sessions span out, the picture will get more clearer. I'll post the analysis for 7th May later in the evening.

Tc

 

[SwingKing]

Today was a very positive day for the market's (Global market's). Dow at present is trading 350 points up and mostly the sentiment will flow tomorrow in Asia as well. I would have preferred volumes to pick up on such strong days, however in reality today volumes were a tinge lower than the days when market's fell. Largely Asian market's rose somewhere between 1% - 2.5%, but Indian market's rose 3.5%. I was a little surprised to see such a rise in one session but nevertheless i chose not to argue with the market.

Going forward I maintain my stand of us trading in a broad channel as depicted below. I feel that the toxicity present in the system cannot be cleaned up so easily. There may be few sessions which will drag us down to test the low's made previous week. Anyhow, today's session has created a low risk reward for the long side trade and hence if indeed market's have reversed, I will reverse my position only if the trend channel is broken in a positive manner. I feel we have entered a phase of trader's market where there will be opportunities to make money on both sides. However, the key to such market's is to analyze the Risk Reward ratio before taking any position. Currently, the risk reward advantage is not on the long side.

Update: I would be looking for the Nifty to close below 5220 today (11th May). Would be surprised if it closes above this level. Will give my reasoning in evening's post.

 

[scplindia]

HI Raunak,

You said:

Currently, the risk reward advantage is not on the long side.

Implies are you still expecting correction to go on and not to go above 5250 in this pull back rally.

A break above 5250 or the channel implies reversal of trend -- uptrend.

Regards,
Prem Kumar

 

[SwingKing]

HI Raunak,

You said:

Currently, the risk reward advantage is not on the long side.

Implies are you still expecting correction to go on and not to go above 5250 in this pull back rally.

A break above 5250 or the channel implies reversal of trend -- uptrend.

Regards,
Prem Kumar

What I mean is that the prev low is around 4985 and currently price is at 5200. The gap between the close and prev low is of 215 points. Hence if one goes long, he would ideally maintain a stop at 4985 since this is the reference point now. We face a stiff resistance at 5280, 5310 and 5350 which is 90, 120 and 150 points away. So, the reward is 90,120,150 points whereas risk is 215 points. Hence, Risk to reward is not favorable.

Tc

 

[nimish_rulz]

What I mean is that the prev low is around 4985 and currently price is at 5200. The gap between the close and prev low is of 215 points. Hence if one goes long, he would ideally maintain a stop at 4985 since this is the reference point now. We face a stiff resistance at 5280, 5310 and 5350 which is 90, 120 and 150 points away. So, the reward is 90,120,150 points whereas risk is 215 points. Hence, Risk to reward is not favorable.

Tc

Well we are I believe still in very much a bull run. The correction on Nifty was similar to one seen in Jan Feb(2010), Oct-Nov(2009) and May June(2009). I agree with your view that we will test the lows of 4950-4970 But I dont think it will happen so soon. I believe the slippage will start happening end of May (Around 20th) to mid june we will have another leg down and just 15-20 days before the results announcement in July we will have the next major upmove. Remember this quarter the results will be extremely bullish because of the very low activity in 2009 april-june quarter where the world was officially in recession and registered a negative growth hence anticipate a massive bull run. Earning per share in June and September were disastrous last year. This will give a huge boost to the investors sentiment. I believe this will also be the case with results in September. Hence before the results market manipulator will pick up the market.

For now they have absorbed enough stock to make a short and fiery quick upmove. Dow which went down 1000 points there was nothing wrong with it except they absorbed all the stock by hitting stop losses and went through the entire tape.

If you check the hourly charts on Thursday and Friday you will see a completely different picture than what you see on daily. The volumes on up candles were high which means absorption. But everyone got an impression that volumes were high when the market fell.

Short term I believe we will go up I have a stop loss of 5150 with an up bias. I went long on FTSE and Swiss 30 on friday just before the market closed and it gave me huge profits today.

If anyone remembers it was a similar case in Nov- Dec we went down quickly and then we sprang up quickly only to fall around 22nd Jan. That time dubai was the crisis source and Abu Dhabi govt bail out proved the trigger for upmove. At that time 5180 was one hell of resistance which proved a stiff resistance on 3-4 occasion but we wiped it comfortably to touch 5310 as a new high.

Just my view. In short I m long with a trading view.

 

[simple_trader]

Well we are I believe still in very much a bull run. The correction on Nifty was similar to one seen in Jan Feb(2010), Oct-Nov(2009) and May June(2009). I agree with your view that we will test the lows of 4950-4970 But I dont think it will happen so soon. I believe the slippage will start happening end of May (Around 20th) to mid june we will have another leg down and just 15-20 days before the results announcement in July we will have the next major upmove. Remember this quarter the results will be extremely bullish because of the very low activity in 2009 april-june quarter where the world was officially in recession and registered a negative growth hence anticipate a massive bull run. Earning per share in June and September were disastrous last year. This will give a huge boost to the investors sentiment. I believe this will also be the case with results in September. Hence before the results market manipulator will pick up the market.

For now they have absorbed enough stock to make a short and fiery quick upmove. Dow which went down 1000 points there was nothing wrong with it except they absorbed all the stock by hitting stop losses and went through the entire tape.

If you check the hourly charts on Thursday and Friday you will see a completely different picture than what you see on daily. The volumes on up candles were high which means absorption. But everyone got an impression that volumes were high when the market fell.

Short term I believe we will go up I have a stop loss of 5150 with an up bias. I went long on FTSE and Swiss 30 on friday just before the market closed and it gave me huge profits today.

If anyone remembers it was a similar case in Nov- Dec we went down quickly and then we sprang up quickly only to fall around 22nd Jan. That time dubai was the crisis source and Abu Dhabi govt bail out proved the trigger for upmove. At that time 5180 was one hell of resistance which proved a stiff resistance on 3-4 occasion but we wiped it comfortably to touch 5310 as a new high.

Just my view. In short I m long with a trading view.

Please do not get me wrong, we could well test 5150 in Tuesday's trade.

Still it would not mean that this upmove will be disturbed.

Just wondering why 5150 SL! fair chance that market will take it out.