Nifty Pivot-based Mechanical Trading System coupled with 2 and 3 Day Swing Calls

[columbus]

Dear Sunil,

I was just wondering - if we simultaneously have more sheets with RIL, SBI, ONGC, Infy and maybe 1-2-3 more heavyweights of the Nifty then we can refine the SELL and BUY calls and the validity of these calls could have a higher achievement rate.

The logic/reason behind it is that Nifty by itself does not move - It is the movement of all the scrips in the Nifty - which in combinations of Plus and Minus movements - make the Nifty move. So, certain scrips which have a higher weight in the Nifty can be inserted and monitored on the same basis of the current excel sheet, then combine the BUY and SELL of all the scrips AND Nifty and come to either a BUY or SELL call for the Nifty itself.

Maybe it is just too time consuming or we cannot find out immediately, so start with 2, say RIL n SBI then if we see that it is a step in the right direction, then add more.
The reason I AM NOT DOING THIS and asking you to do it is bcoz I have no idea of Pivots and neither am I an expert in Excel.

Just a thought which I penned down ...

Murtaza

The VOLATILITY in NIFTY is so much so that sometimes working with
individual stocks looks boring.

 

[Sunil]

POSITION AS AT END OF 27-JAN-09

1. Pivot Based mechanical system (Excel file):
SHORT signal as at close of 20-Jan @ SPOT 2797 / FUT 2776 reverses to LONG signal as at close of 27-Jan @ SPOT 2771 / FUT 2767

2. 2 Day Swing
Current Signal: SHORT signal as at close of 21-Jan @ SPOT 2706 reverses to
LONG signal as at close of 27-Jan @ SPOT 2771
SAR = CLOSE BELOW SPOT 2662 (which is the lowest low of the last two trading sessions)

3. 3 Day Swing
Current Signal: SHORT as at close of 7-Jan @ SPOT 2920
New SAR = CLOSE ABOVE SPOT 2777 (which is the highest high of the last three trading sessions)


OVERALL POSITION
Spot closed not only above 2745, but also 2765. LONG signal has been given as at close of 27-Jan @ SPOT 2771
It will reverse to SHORT signal if SPOT closes below 2662 on 28-Jan.

 

[Sunil]

Through discussions with LVGandhi & niftychance few days back, I was thinking of extracting more utility from 3 day swing signal.

After this week's price action, if the fresh LONG signal generated is again whipsawed, then I am thinking of using 3 day swing signal ONLY for reversing positions during such sideways trend.

A good breakout / breakdown is generally followed by some pullback - to iron out the whipsaw signals, I use BOTH excel-pivot signal & 2Day signal to strengthen reversal signals.
But, this 150-point nifty range over 2 weeks seems to be playing havoc & whipsaws. (Even though, I am avoiding positional longs as of now, I would prefer the system too, to be on a safer side & do not give reversal signal too early).
3 Day swing signal is considered a bit lagging in generating reversal signals - but it seems to play out well during such sideways trend.
Let's see how today & the rest of the week (with settlement day tomorrow) pans out....

 

[Sunil]

Gap filling attempt on a slightly over-bought condition today

 

[ThE HaMmEr]

suniiiil.............whereee yaar.......waiting eagerly 4 ur postss...........

have a greaat weekend.......and post when comfortable

 

[deb99891]

sorry sunil
posting in ur nice thread
hope u wont mind
some key levels(i will trade) for next week

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[Sunil]

POSITION AS AT END OF 6-Feb-09

1. Pivot Based mechanical system (Excel file):
SHORT signal as at close of 5-Feb @ SPOT 2780 / FUT 2766 reverses to LONG signal as at close of 6-Feb @ SPOT 2743 / FUT 2831

2. 2 Day Swing
Current Signal: SHORT signal as at close of 2-Feb @ SPOT 2767 reverses to
LONG signal as at close of 6-Feb @ SPOT 2843
SAR = CLOSE BELOW SPOT 2755 (which is the lowest low of the last two trading sessions)

3. 3 Day Swing
Current Signal: SHORT signal as at close of 2-Feb @ SPOT 2767 reverses to
LONG signal as at close of 6-Feb @ SPOT 2843
SAR = CLOSE BELOW SPOT 2755 (which is the lowest low of the last three trading sessions)


OVERALL POSITION
It will reverse to SHORT signal if SPOT closes below 2755 on 9-Feb.

 

[ThE HaMmEr]

welcome back sunil...i hope u r doing fine noow.... god bless u big brother....

the upper post says position as on 27 jan 09

typo...please correct it ....

 

[Sunil]

First, the bigger intermediate range: Spot 2500 - 3150
The upmove from 2500 to 3150 had corrected by more than 62%.
50% lies at 2825
38% lies at 2905

Then, for 3150-2660 downmove, we have
38% = 2845
50% = 2905
62% = 2965


For 4 weeks from 15-Dec-08, there was sideways (rectangular movement) from 3150 to 2800 (150 pts).
It broke down during fist half of Jan-09, and nearly reached its target of 2650 (2800-150).

Now, we have a broad 4 week sideways movement of 200 points from 2870 to 2670.
It has taken a form of Inverted Head & shoulders pattern in Daily charts; and in weekly chart, we have an inside bar.
Thus, we have reached an inflection/saturation point where a breakout is imminent during the week 9-Feb to 13-Feb.
Even bollinger bands have contracted and signal a spike.


But in what direction:
Well, there has been a BEARISH CROSSOVER OF 20DSMA & 50DSMA. Such crossover had a very negative effect on previous 2 occasions - June 08 & Sept 08.
RSI(14) on EOD chart has reached a crucial RSR level of 50, as can be seen on chart - for bullish moves, it needs to sustain above 50.
EOD/60min charts and Above Fibonacci levels indicate 2900 to 2930 as a major hurdle.
If we consider the inverted H&S then, as per textbook, the right shoulder's low is key for such pattern's negation.
Such level is Spot 2755 which is 2day/3day/5day/weekly/Feb month's swing low...

So, tomorrow's price action at 2870-80 zone & reaction at 2900-2930 zone is important for setting the trend for rest of the week.

Still, no positional longs for me - all longs on intraday basis.

It would be a bad surprise for me if we close between 2800 & 2870 again tomorrow & a rude shock if it happens again on Tuesday.

 

[coolboy007]

Excellent post which i was looking for so long You hav explained each thing step by step. Regarding BO , if we close and sustain above 2920 which targets do you see , 3150 ( prev HH) , if we dont sustain above 2930 for 2 days then i think a Breakdown is imminent and that Imp Support of 2755 may be taken out very soon as Long unwinding may take place.

I had my eyes on BEarish crossover on SMA but dont know still bout Bollinger Bands. I have kept 2920 as SL for my positional shorts , Global cues are indeed helpin these days and even FII after a Month gap NET bought on Friday , seems my SL will be hit