iCharts Discussions

SwingTrader · Posted: Tue Nov 27, 2012 4:18 pm Post subject:

Today's move, especially the force of the move, took me by surprise. I did have a mental stop for my puts around 5670 but I thought market would probably reverse around that level. It, of course, did not and it was clear 5-10 mins after open that market was not in the mood to reverse today. I shorted 5800 puts around Rs. 123 thus converting my 5700 puts to a bull put spread. It looks much better now but my breadth cycle trades have taken a good hit as I am net down Rs. 3400+ per lot. Lucky for me as I am trading quite small as I am just testing the signals. I am tempted to trade short-term but I will not as the whole idea of tracking breadth cycle is to get in on bigger trades. I will continue to do just that.

I like how market always pulls a fast one on me irrespective of whatever fancy stuff I try Very Happy

I will post breadth charts later today. I am extremely eager to see how breadth has changed due to this strong rally.

vinay28 · Black Belt Joined: 24 Dec 2010 Posts: 11748

ST, looks like you shorted nov puts? if true, a gap down open (God forbid) will knock you the other way.

SwingTrader · Posted: Tue Nov 27, 2012 4:38 pm Post subject:

Gemini · White Belt Joined: 28 Apr 2009 Posts: 166

Dear ST,

Read both your thread with today's update. So much to learn, every time ! Thanks.

I noticed yesterday that a large number of stocks (EoD basis) had closed above their 5 days EoD value. May be that was an indication of change in sentiment ?

Please do keep us enriching with your guidance.

SwingTrader · Posted: Tue Nov 27, 2012 9:05 pm Post subject:

SwingTrader · Posted: Tue Nov 27, 2012 9:12 pm Post subject:

Today's breadth chart attached.

Market took off like a rocket. Short-term breadth up strong too. It had not yet reached oversold condition yet but it was almost there. The real test would be early Oct highs. Until we decisively clear those, we probably continue like this - up & down. I am not in a hurry, I will continue to try and align with the breadth & price trend until we see a big move. Capturing a big move is the point of this whole exercise. Until then the idea is to keep losses low and later capitalize on the bigger move.

SwingTrader · Posted: Wed Nov 28, 2012 8:44 pm Post subject:

So which way is it going to be?

Gemini · White Belt Joined: 28 Apr 2009 Posts: 166

Interesting chart.

I looked at Nifty 50 and found that out of 50, 28 stocks have bullish bias, with 10 stocks providing fresh buy signal ( closure above high of last 5 days). To me, this is an indication of overall bullish sentiments and indicate gap up opening tomorrow. Being derivatives expiray day, bulls will put all their might to crush bears.

It will be another interesting day out there on 29th. Market is the master !

SwingTrader · Posted: Thu Nov 29, 2012 9:23 am Post subject:

SwingTrader · Posted: Sun Dec 02, 2012 9:26 pm Post subject:

We seen to be too extended at the moment. Short term breadth at the top. I think it is a good time to hedge the gains.

I closed out the Dec 5700-5800 bull put spread on friday around breakeven. I had also earlier took on a small position of Dec 5800 calls on Nov expiry day as I wanted more long delta and bull put spread was not providing much. I think Monday would be a good time to hedge the gains on these calls as we are extremely extended for the short-term. I will probably add on to the position if we get oversold on the breadth in the next few days.

Everything looks bullish at the moment so one just needs to be careful.

*** The chart posted below is short-term breadth ***

SwingTrader · Posted: Sun Dec 02, 2012 9:46 pm Post subject: Long-term breadth update

The long term breadth held well during the sideways to down move since early Oct. Even the medium term breadth has recovered very well during the recent rally. This indicates no long-term deterioration is seen, at least at the moment, in the market.

SwingTrader · Posted: Mon Dec 03, 2012 8:15 pm Post subject:

I have spread off my long calls today (sold higher strike calls against the ITM calls I am holding). I am expecting a mild pullback given the seemingly solid ground we are on (in terms of breadth) with long/medium/short breadth being positive. The bull call spreads that I am holding as a result of today's trade will still appreciate in value if the rally continues starting tomm and at the same time provide a limited hedge if we get a pullback. The expected pullback/consolidation would materialize only if we get a confirmation from price itself. So watching out for it at the moment....

*** I am using the attached short-term breadth chart to get slight early breadth signals. The downside, of course, is that the signals could be false/premature so I need to be careful.

SwingTrader · Posted: Tue Dec 04, 2012 10:12 pm Post subject:

Market up but short-term breadth down....stealth pullback in progress. Once this is over we could see the next leg up? maybe...

SwingTrader · Posted: Sun Dec 09, 2012 4:52 pm Post subject:

Short-term breadth (13 day) continues to be strong, very short-term (5 day) going down since the last couple of days. If short-term holds, we could get a long re-entry to add to the long positions. I am holding the 5800-6000 call spread which has appreciated nicely. I will add on more long positions if we get a pullback as long as the overall breadth structure (long/medium/short) remains positive. I will consider closing long positions only if short-term breadth weakens (13 day breadth) along with price confirmation. For price confirmation I am watching hourly charts as the trades I have taken are of a shor-term nature (holding for few days to 2-3 weeks) and daily chart would be slow for this. Even though we have lost momentum in the last few days, things still look good for now. Next few days will give more clues to the near term direction.

If overall breadth holds positive I am looking for a small pullback in the next few days and a slightly deeper pullback into the end of this month which can give another opportunity for long positional trades. But that is too far and would depend on many things. Let us see how it goes....

SwingTrader · Posted: Tue Dec 11, 2012 8:19 pm Post subject:

Pullback in very short-term breadth continues since 4th Dec but market itself has gone sideways since 5th. I am looking for a bottom in very short-term breadth indicator (red line) to add to my long position as long as the short-term breadth (blue line) holds. Short-term breadth too following down can give better prices but it remains to be seen how far this pullback will go.