iCharts Discussions

[psalm]

Ajay,

Have you noticed one thing...All the big SELL-OFFs have come when the market has gone above the 200-day EMA...I mean the start of the SELL-OFFs were all from above the 200-day EMAs. Please check the chart for the days 8th November 2010, 4th Jan 2010, 6th April 2011, 8th July 2011 and 28th October 2011. You can find that these are the days when market tops were formed. Interestingly, all the closing on these days are above the 200-day EMAs. In the last 2 instances, the 200-day SMA has been acting as resistance and I believe it is going to continue. So, as per the trend, one can expect the market to close above the 200-day EMA atleast for a day before the next correction gets started. And one can expect the 200-day SMA to provide the resistance.

NOTE: 200-day EMA is around 5150 now....and the 200-day SMA is around 5250 now.....So, its not a surprise that the FIIs are adding their positions....They'll get 300 points at the least if they are are LONG in NIFTY....

[ajayhkaul]

Precise observation psalm.

I notice that the FIIs are not day trading like they were doing last quarter ie they were playing very short term earlier. At least not so since Jan 2012 beginning.

RBI softening ? banknifty is holding up well
FDI clearances by the government

Do they know something we don't? Is it going to be a massive pump and dump?

what are the favorite sectors? where is the leadership coming from? Banks?

Questions... questions .... getting very interesting.

[psalm]

Hi Ajay,

I have started selling NIFTY and other stocks only after the market started drifting below 5150. The reason was that there was a trend going on in NIFTY from 14th August 2009 to 12th August 2011. The period is for 2 years. During these years, I have witnessed a trend, an UPTREND. It was only after the violation of the trend that I have started offloading the stocks and started selling NIFTY. Untill then, I was like a "BUY ON DIP" market player, cos the trend was still there. I have been saying TREND, TREND...TREND and all.....You must be wondering, what trend i was talking about, which was there in those two years. The trend or pattern that I have noticed in those two years was as follows:

Whenever there was a peak made, ie, whenever there was a small rally (usually for a month or two), the market used to correct by 76.4% or more. But the important factor was that the weekly candles of the market will never close below the 76.4% retracement of that particular rally. The trend has been there for 2 years from Auguest 2009 to Augst 2011. The last leg of this trend was an extended one, i mean a bigger one. The 74.6% retracement of that move was around 5160. Then the market corrected from the peak of 6300 levels to almost those levels, i mean to around 5160 levels. That was in the month of February 2011. The low made at that time was 5177. Then there was another attempt in the month of June. The low made at that time was 5195. Untill that point of time, I was thinking that the correction was just part of the existing trend. Atlast Nifty broke the 76.4% retracement level August 2011. It was not unusual for me as Nifty had broken that level quite a few times previously during those trendy period. Though the level was broken, the weekly candle closed above the 76.4% retracement level, comfortably and then I told myself again, this is just a correction. Unfortunately, the inevitable happened next week itself , on 12th August 2011, exactly 2 years after the trend has started, Nifty has closed below 76.4% retracement level. And that was it!!!!The end of THAT TREND. I think now, you know why I have started selling Nifty and the offloading the stocks after the level 5160 was broken. By the way, the market tried to break that level later. A green weekly candle was formed in october 28th. However, after that there were huge selling, which pushed the market to a new low at 4531 a few weeks back. You can see the chart here with this post.

I expect the the 5160 level to offer big resistance now on any upmove. In my previous message, i was mentioning about the 200-day EMA which is around 5150 now. So, you can see what is in the store now. When the market crosses the 200-day EMA it will be around 5135 or 5140....So, even if it crosses that level, there will be a resistance around 5160 levels. Above all, there will be another huge resistance, 200-day SMA. So, in all probability, one can expect the market to reach the 5150 to 5200 before a huge SELL-OFF.

NOTE: This is just my opinion. I have formed this opinion after looking at the chart, pattern and Trend. However, each and every technical analyst have their own findings and opinions. I respect them all and their opinions. However, i'm writing it here just to widen our thought process as Ajay has been saying. So, consider this as just my opinion and think about it....

[ajayhkaul]

Meticulously done ,psalm! You are right about 5160 levels , a trend line drawn across the recent tops also leads you there.

An easier way to check the trend is as follows:

1... Select 50 day and 100 day closing averages on the nifty/stock chart

2...UPTREND/Bullish : if 50 day average line is above 100 day AND the nifty/stock price is above 50 day average

Else it is in a down trend ie 50D is below 100D and the price/nifty is below 50 days

The downtrend on nifty , according to the above started in Feb 2011. It is still in a down trend of course.

What do you think about this ?

[psalm]

That's very much true...ajay...The major trend is clearly DOWN. I dont think the market will be able to cross 5230, even on an intra-day basis. So, 5230 can be a good stoploss for any SHORTs, provided, the 200-day EMA is below it.....if the 200-day EMA is above 5230, then the stoploss should be that value. This is my strategy as of now if the market reaches there. But 5160 and 5200 are a long way from here...hahaha....let's ride this intermediate uptrend first.....then.....then....then..Fingers crossed....

[vinay28]

how about 5159, 4856, 5257 and then whichever lower level you want?

[psalm]

i don have any issues....hahaha....i'll be long by then....

[maddyprincess]

TODAY market is very confusing below 4800 Caution is advised as bear market rallies fizzles out fast and previously 5399 – 5099 today 4899

[maddyprincess]

TODAY market is very confusing below 4800 Caution is advised as bear market rallies fizzles out fast and previously 5399 – 5099 today 4899

Maddy

[vinay28]

i think one should sell nifty now and cover on monday. may give 50 points

[ajayhkaul]

[vinay28]

as I had posted earlier, today was up but gave me chances to book my calls and puts at or close to my targets due to a classic volatility. I had also posted earlier that I am expecting 4807 ns and we got it.

so far so good. all the days for the last week or so behaved as I had felt and had posted accordingly.

I have now bought puts again since I feel 16th will be down. I also feel that 17th to 20th will be up.

God is great! Hoping my feelings about day to day moves are often (if not always) proved right. Keeping fingers crossed.

[psalm]

Hi,


I expect the market to consolidate for 2 or 3 days before moving up. It is very much possible that we may not break the 4900 levels this week. Any close above 4878 will attract further buying. Once 4900-4940 level is broken, one can expect a 250 point rally within no time. So, the intraday SELL-OFFs can be used to create LONG positions especially in individual stocks.

Tomorrow, the market is expected to open down because of the S&P downgrade of many European countries. I dont expect the market to close below 5800 on monday, even if there is a chance of testing 5750 levels. I expect the range 4800-4780 to hold. However, if this range is broken, then one can expect the market to test 4750-4740 levels. Even if we go there, I expect the market to close above 4800 tomorrow.

Regards,

Sam

[vinay28]

5800/5750? wishful thinking?

tumhare mu me sugar!

[psalm]