Nifty Futures Trading Part 2 (Positional)

[rishig38]

Attached is the Nifty Spot chart...it looks like the hold up still continues and we are stuck between a tough fight between the bears and the bulls...will wait to take a position depending on a BO on either side....

 

[mahesh2007]

Guys, here is an interesting article by one of an experts...very interesting read:

The 8-Year Cycle and its implications

The Sensex is assumed to be under a larger 8-year cycle ever since its birth. As shown on the chart below, '1984 was the beginning of 8-year long bull-run till '1992. In my Super-Cycle Degree count, shown on ASA Long-Term chart under a separate paragraph, I have, in fact, taken 1984 as the beginning point for the most dynamic 3rd wave.

The next two important turning points occurred exactly 8 years thereafter, in '1992 and '2000. Both these turning points were marked by stock market scams, because of which the leaders of the rally had extremely difficult time later. For example, ACC, the leading stock of '1992 bull market, remained below its highs till end of '2004. Similarly, the IT stocks, which were leaders of '2000 rally, lost as much as 90% of their top valuations by the year '2003, and most are below their top levels even today.

This year, we were sitting on this very important cycle, which therefore, has thrown up similar possibilities.

Remember, every 8 years, market does see a deep cut in valuations. In the previous 8-year cycle top during 1992-93, Sensex lost 56% from 4546 to 1980. In the next cycle top, the cut was almost 58% from 6150 in 2000 to 2594 in 2001. Time-wise, 1992 cycle completed the bear phase in 12-16 months, while the 2000 cycle took 19 months only to hit the low, which was then followed by 19 months of base formation before bull phase could begin again.

I had, accordingly, targeted sub-10k levels for Sensex price-wise, and a minimum of 13 months into bear phase time-wise. Though the price targets have been achieved, the time targets are yet to be achieved. Remember, in technical analysis, both time and price forecasts must be achieved. Long-term investors should, therefore, wait till then. As long as Sensex keeps on making lower highs, the bear phase continues.

Besides price \ time damage, I have been mentioning scam as a usual occurrence after 8-year cycle top. In the current cycle, this may have, or will unfold further in the Global financial markets. The size of the figures will, therefore, be much larger than the earlier ones, and so will be the number of people involved in it.

Furthermore, the history shows that the bull always goes to jail.

Another parameter that leads to the actual lowest value of the bear cycle is the catastrophic event. Such event would be a terrible disaster or accident, especially the one that leads to a great loss of life. The last two cycles had seen terrorist activities, serial blast in Mumbai during 1993 and WTC tower collapse during 2001.

These events happen suddenly, without any warning, and their catastrophic proportions are not known even while they are happening. During 1993, one blast would have been normal, but 13 serially proved catastrophic. During 2001, 1st hit could have been an accident, but two in succession was catastrophic.

These events led to such desperation that the lows created thereafter were never ever broken again, Sensex low of 1980 during 1993 and 2584 during 2001.

Ironically, therefore, such events did, and will provide the best of the investment opportunity to an investor, who is able to take it when it comes. If so, we could be on watch, from now till whenever it occurs. Perhaps, the 13th month, i.e. February2009 could be the focused time zone.

In 1992 there was price rigging by late Harshad Mehata done by circular trading. Also the funds for this purpose were raised by unscrupulous ways.
P/E ratio went to 40 levels.
ACC was one of the stocks in the list of Harshad Mehata.

In 2000, there came another bull Ketan Parekh who also did price rigging in fundamentalless telecom,IT shares like Aftek,HFCL,Global Tele etc.
There was DOT com Bubble in US,where assets were created on papers For IT and Tele companies.

The 2003-2008 bull run was based on the potential prospects of India and was fuelled by FII inflows as India was inching closer to 10% GDP growth.

P/E was around 25 .

Increasing commodity prices followed by global recession took it's toll and so far we have faced outflows to the tune of 1,00,000 crore.
Market cycles are supposed to go shorter in the future.

 

[rishig38]

BTW, for just informational purposes, Sensex has completed 61.8% retracement from the lows of 1980 (I think 1980 is the birth of the Indian stock market) to the highs of 2008....

DOW has also completed 50% retracement from the lows of 1975 to the highs of 2007.... (http://blog. af raidtotrade. c om/large-scale-fibonacci-in-the-dow-jones/#comments )

Another longer term view for DOW is also presented here: http://3.bp.bl ogspot. c om/_lLlIN5zncJ8/SSl6K81UXrI/AAAAAAAABuI/RtEy-fwG9-E/s1600-h/DJIA-+W45+long+Term+Bear.png


It seems likely that we are headed upwards looking at the Sensex and Dow charts before we start our move down again to test newer lows...

It would be awesome if some one could take the longer term view on Nifty and post a chart here....

 

[rishig38]

Market cycles are supposed to go shorter in the future.

Could you please elaborate on your statement?

So, February 2009 time frame could be of significant importance here as suggested by the author, right?

 

[mahesh2007]

Could you please elaborate on your statement?

So, February 2009 time frame could be of significant importance here as suggested by the author, right?

i am not an expert on this topic and about shorter market cycles, it is my personal belief.trying to elaborate a little.

Stock market moves in cycles-
(1)Long term cycle also called secular one, lasts for around 8-10 years or more.
(2) short term cycle or cyclical one which lasts for 2-3 years.Some people also call it as phase( for ex. bear phase in secular uptrend etc).

What i wanted to say was duration of cycles shall be reduced.

Long term cycles duration shall reduce and may come to 4-5 years.
short term cycles duration may come to 8- 15 months.this I say on the basis of volatility in the market,FII/DII gross and net positions.

I dont second the authors opinion nor I contradict.

mahesh

 

[mitasatyajit]

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[columbus]

Tape,
candles with no upper,lower or both shadows(wicks) are called shaved one.
Shaved candles are called marubozu.
what u care calling shaved one(yellow encircled) are not marubozu or shaved ones.
In fact some of red encircled candles are shaved ones.

Why do we call these charts as a CANDLE charts ,we can as well call them BELAN Charts.(Hindi word).
[Not talking about SHAVED ones]

 

[pkamalesh]

Not seeing satyam these days......where is he????

 

[coolboy007]

People this is ma first chart ever and plz forgive me if there are any mistakes. I hav come here so that seniors correct me. Plz point out my mistakes am sure it has loads. I am a 17 yr old baccha so dont get angrry

 

[pkamalesh]

Great CB....as far as i see it there are no mistakes...excellent work...keep it up....bacheee