iCharts Discussions

[vivek999]

Hi hdo,

It was nice reading through your post, and the replies from fellow-members... Good one!

When we put our thoughts in writing, it helps us analyze better. I appreciate your efforts.

Don't worry about the 'No' votes..
When v express, v get noticed... when v get noticed, v express better..

Keep the Enthusiasm high! Lage raho! Keep posting...

All the Best!

Best Wishes,
Vivek

[hdobhal]

Vivek,

Its really heartening when people like you encourage. I think its just in the interest of all to notice the "good old" trendlines, which many people have kept aside these days.

Vivek, also, I request you to correct and guide me whenever I am wrong in drawing the lines or recognizing the patterns. All advice will be valuable and highly appreciated

well, as far as the poll is concerned, I seriously wanted at least two votes of "no". As there is no Government without an Opposition and people have the right to disagree with me

Thanks

Harish Dobhal

[saikat]

Hello Harish,

I have to agree with your analysis as it is exactly same way I have done mine - I also give great importance to trendline broken, and these simple tools can't be substituted by complex tools.

I have few comments:

1. Regarding the paradox of huge 5000 PE writing - the way I analysed it is once the 5000 PE writers understood(I believe till expiry day morning they had faint hope of taking NS above 5000) that 5000 can't be protected they aggresively Shorted NF. If you remember the sudden surge in OI of 5000 PE happened when its value was around 50-55 -and if you do the maths you will see that by shorting NF in the morning of expiry day and then taking Nifty below 4850 - they were able to cut their losses to Nil almost.
Now just look at 4800 PE JUNE OI - its already 64 Lakhs...... just imagine how severe the down move can be if these 4800 PE writers again feel they are in trouble............. I am very worried really.......

2. In the backdrop all these bad things of trendline breaking and 4800 PE writings etc.... one thing is happening --- +ve divergence in hourly chart - look at the RSI and STS since 24th...... and also the inverse H&S formation as mentioned by Vivek. But on the first sign of violating these technicals - we have to cut our long positions without sitting on HOPE for a pullback as the downmove can be fast and furious.

3. Althogh I really don't see any other things than charts but i have a feeling that unless CRUDE falls back (or below) to its 200 MA (around 100$) - it will simply be impossible for equity market to go up.

Keep the good works ON...

Saikat

[hdobhal]

Dear Saikat,

Thanks for posting your detailed reply and very good analysis of OI and market movement on expiry day. I totally agree with your finding that there was a panic kind of situation in 5K put writers and they must have shorted NF aggressively, the OI (or the surge in it) does tell that. Also, the way 4800 put is being written and overall PCR of OI at 1.96 is looking worrying if similar scenario pans out this month. I agree there will be more pressure if it breaks below 4800 - 4700. However, for the time being, it looks Nifty may try to go up to 5000-50 levels.

I appreciate your effort to spread knowledge by posting here. Please keep it up so that we move forward to becoming better traders.

Thanks

Harish Dobhal

[gudd007]

[hdobhal]

Dear Mr. Gudd007,

First my heartily thanks for replying to the post. I feel proud when so many people reply.

Now, let me come to your point, I read your reply and thought about it a lot, but could not reach to any conclusion of what you want to express. I request you to kindly upload a chart which elaborates whatever you say, depicting all your levels and trend lines. Also, you can even download my chart and correct the mistakes if any and post the updated chart having your vision.

a picture is worth a thousand words

Dear All Readers, my request to all of you:

If anyone of you can explain what Mr. gudd007 wants to say, kindly feel free to post here


Thanks
Harish Dobhal

[hdobhal]

hello all fellow members and respected seniors. I will post my latest analysis of nifty in a shortwhile. I hope I'll again see the similar response by all of you.

[hdobhal]

Dear Friends,

Today (or rather evening) I am posting this after pondering over a few things. The different feature of this post is I am not referencing to any chart, not because I have lost my charm with them but because for the kind of talk I'm going to discuss here, there will be no requirement for charts.

The first thing I should do is disclaimer : I request all to read my post just as an ANALYSIS and not as a CALL. I reiterate again that I do not find myself in the position or capacity to give any trading call. Anybody who wants to trade based on my views, should definitely refer to some expert professional advice.

Now, I think I should come to the point immediately, without wasting time and words. Following are the issues I thought about and tried to dissect :

The Unnerving Expiry on May 29:

We all know what happened in the month of May. It was a very eventful month despite Nifty trading in a range. The month witnessed a starting with a TOP formation, after a very good going up trend, which started from the bottom made on 18th Mar at 4668 thereabout. Most people were bullish for the month, not only for Nifty but most of the markets globally. The downside that started on 2nd May looked kinda normal as a retracement was due for the upmove. The downtrend continued, but what was promising for the bulls were two things - 1. The uptrend line was intact and 2. more and more puts were written of 5000 strike. These two things almost ensured traders that the settlement will be near 5000, if not above it. What followed was mainly attributed to the rise of crude prices to record highs and not showing any signs of cooling off. On may 12 when Nifty bounced back from the uptrend line, traders were happy to open long positions and seek targets of 5300 - 5400, myself included. However, another downtrend started on 20th May which broke the important uptrend line and there was a sense of despair among bulls. Although the sentiment was hurt, still many were hoping 5000 as it was a good put support. Then came the day of expiry with hopes still on 5000 but surprisingly, despite having been a good and hopeful session in the morning and before noon, markets started to tumble. Most people kept their hopes including me, that Nifty should close near 5000 but all hopes shattered as time passed and finally it closed below 4850 !!! a good 150+ points below the so called support !!!

Now what surprised me was that during the entire day, there was no weak clues from global markets, nor there was any bad news although there were some talks about fuel price hike etc.

Well, it signalled something was cooking in there, but alas, only few could guess that. I was expecting a bounce before any further selloff, and next day we did see a bounce but only for that day, which again could not materialize into something bankable. In technical jargon, Nifty made a Bearish Engulfing on thursday and an Inside Day on friday.

On monday, after a promising start for bulls, the Nifty started cracking and broke many supports during the day finally closing at the low at more than 2% down. This has turned even hard core bulls into bears and why not? when you see supports getting broken like that. There were many rumours passing, the biggest of them being a support withdrawal by Left to the UPA government on fuel price hike. No rumour proved to be true so far when I'm writing this, but one thing is certain - The Indian Stock Markets are looking very weak and vulnerable. In order to catch the uptrend, it has to go a long way now. The weakness in Rupee has been continuing with some rare strong days, which is evident of foreign money getting out from India. Inflation is not showing any signs of cooling down and is threatening to move to double digits. The government is in a catch 22 situation as it is helpless and can't do much to contain inflation.

I salute Rameshraja Sir for his call on going short on the past thursday. I still remember his logic that for some consecutive weeks, markets have shrugged off inflation nos, but this time it can be the other way.


The Ever Rising Crude Oil

What most people are worried throughout the world is rising crude oil price. It is making new highs and not showing any signs of cooling off significantly. When crude oil touched USD 135, there was a kind of panic globally. There are many schools of thought regarding the reason behind high crude prices. Interestingly, crude is looking the most precious thing in the world over.

Some analysts have concluded that crude is rising on mere speculation which is largely based on worries on supply and continuing demand by developing countries, China leading the race. They say the speculators are creating a bubble which is inflating and is very soon going to be ripe for a burst when the high price will act as a deterrent for growth and the spiraling price move will fall off the skies. In a newsletter by a US economist, I read there are reports of Oil Vessels just lying idle in high seas paying as high as USD 175,000 per day as charges. Now this if true, will lead to a larger than expected fall when the bubble (if it really is) is burst.

Other analysts have gathered some intelligence information and are almost sure there is going to be a conflict in middle east involving Lebanon, Israel and possibly Iran, not to mention US. If this is true then I don't think there will be any respite from it and instead it might skyrocket.

Well, I went through all these to come to one conclusion :

We are in a real dangerous situation. This is not to create panic but just an expression of the severity of the situation. However, the doors of hope are always open and any one big enough fold in circumstances can change the situation around.

I wanted to throw some light on few other things but given the length of text I have already put here, it is better to leave it here

I sincerely hope you all went through it and will post your responses and comments or brickbats

Thanks & Best Regards

Harish Dobhal

[rameshraja]

Hello Mr Harish Dhobal


Good writeup about market. One should keenly watch if 4550 will be held by Nifty. If it doesn't hold and closes below this level, then Nifty will be in serious problem and it can go down as low as 3300 level. My only thinking is, if market has already discounted fully the slow down in economy or not. Only time will answer to my question.


I once again appreciate your good writeup about market and keep writing further to enhance our knowledge.

Best wishes

C T RAMESH RAJA

[marne.vivek]

Harish man,

gr8 write up, plus there is burden on govt of

1. Farm Loan Waiver
2. Oil Bond
3. Fertilizer Bond / Subsidy

These are as well proving negatives for govt performance, wil post a nifty write up in a while ...

[marne.vivek]

Hi Nifty trendlines, possibly can provide some way gong forward for the market...



i reckon still some side left..

[marne.vivek]

Guys is this head and shoulders??

i guess it is, but such daigonal i am not sure, so pls do comment..

[hdobhal]

Dear RR sir,

Thank you sir for replying with such encouraging words. I agree with you sir that only time can tell whether all bad things have been discounted or not. I'll closely follow your levels of 4550 - 4600.

Thanks and Best Regards Sir

Harish

[hdobhal]

Hi Marne

Glad to see your posts. Well, regarding your first chart, the line 5 is the only intact line and it is proving to be a BIG downtrend line. line 2 & 3 have also collapsed today showing the severity of the weakness. line 4 and 5 remain only for historical records it seems. I was thinking about Line 4 at least once being tested by bulls but now even that chance is distant, if not dead.

Marne, Your next chart, in which you are asking whether it is H&S, is raising a good question. The pattern does look like a H&S pattern but the only missing thing is there is not a definite uptrend BEFORE the left shoulder. So, as going by definition of reversal H&S, the H&S happens at top and so it can't qualify, as H&S is a reversal. However, If we consider H&S as a continuation pattern, then there it can be.

I'll read it thoroughly and see if it is.

thanks for raising this question, it has opened my eyes

Harish

[sanmen]

Vivek/Harish: I dont think its H&S as Head formation is incomplete..did notice this yesterday but i feel the pattern didnt get completed...

Further H&S is generally (strictly by definition) is to be found in UPtrends...which we are not in right now.....

infact we were making a gr8 Inv H&S earlier (i felt so ) but with the recent downfall its voilated i guess...

Keep up the gud work friends...its really gud to read such posts!!!

cheers!

Sandeep :