U say last 5 years bear mkt, I say after 5 year massive bull mkt (03/08) 5 yrs consolidation (which is excellent) 52/5300 is the key... for the massive bull mkt ahead of us to make a final couple yrs run... banks / auto / pharma / IT all either consolidating or in new bull mkt highs already... oil (the mega giants) all waking up after the current steps being taken by govt. I see is a quarter of correction after 4 quarters upmove of HH HLs... weekly charts were highly over bought...
beauty eye beholder etc etc
beauty eye beholder etc etc
Entering into the month of May , let us look at Nifty chart in conjunction with its global peer.
The above chart is the monthly chart of SP 500. The chart clearly shows a negative divergence. The benchmark index is not too far away from topping out(1610-1630) and the ensuing correction should initially target 1450.
The above chart is a super-imposition of the Nifty(blue and black) chart over SP 500 ( red and white) . From the above chart it is clearly visible that Nifty after outperforming SP 500 from 2009-2011 has been lagging its global peer, ever since. The catch up, it is trying to play for the last couple of weeks should see a fitting climax sooner than later.
Finally coming to the Nifty chart( not updated). I expected Nifty to find resistance at 78.6 % Fibonacci retracement level, which today it surpassed quite easily. Coming to my strategy. I have hedged my short positions ever since Nifty spot closed above 5870. I am planning to close my hedge above Nifty spot 6045 with my stop (strict) placed at 6120(spot) on closing basis. Although this trade has been quite challenging and worked against me, it should fall into place in the days/weeks ahead. To be honest, the strong upsurge seen in Nifty has taken me by surprise!
Having analysed quite a few global charts(not posted here) , it seems more likely that the next leg of the downtrend will be a synchronized sell off with the global peers!
The above chart is the monthly chart of SP 500. The chart clearly shows a negative divergence. The benchmark index is not too far away from topping out(1610-1630) and the ensuing correction should initially target 1450.
The above chart is a super-imposition of the Nifty(blue and black) chart over SP 500 ( red and white) . From the above chart it is clearly visible that Nifty after outperforming SP 500 from 2009-2011 has been lagging its global peer, ever since. The catch up, it is trying to play for the last couple of weeks should see a fitting climax sooner than later.
Finally coming to the Nifty chart( not updated). I expected Nifty to find resistance at 78.6 % Fibonacci retracement level, which today it surpassed quite easily. Coming to my strategy. I have hedged my short positions ever since Nifty spot closed above 5870. I am planning to close my hedge above Nifty spot 6045 with my stop (strict) placed at 6120(spot) on closing basis. Although this trade has been quite challenging and worked against me, it should fall into place in the days/weeks ahead. To be honest, the strong upsurge seen in Nifty has taken me by surprise!
Having analysed quite a few global charts(not posted here) , it seems more likely that the next leg of the downtrend will be a synchronized sell off with the global peers!
Thanks Prada for your post, much appreciated.
Could it be the the fall in commodity prices, and the recent BOJ's US$ 1.35 trillion bond purchase (ensuring easy liquidity) has given unexpected strength to what would otherwise have been a pullback? Further, today's talk of negative interest rate in the Eurozone will ensure more liquidity for the market it seems.
We have to wait and see what happens tomorrow. RBI has always had a hawkish stance towards inflation, and from the RBI commentary on the face of it, we should not expect much to happen. The markets are at a crucial juncture. I was short Nifty and BankNifty, but closed my position quite early as per SL in my comfort zone. As traders, we win some, and loose some. But we always live to trade another day.
BTW, I am wondering how many of the bulls who now say 'I told you so' have had the courage of convictions to hold on to the longs when Nifty tanked from the high of 6,120 in Jan. to the low of 5,480 in Apr.? and have not been stopped out, and are genuinely holding longs since then? Would really like to know one genuine bull who has held on to his position right thru the downtrend. I am not talking about paper traders though!
Cheers and happy trading.
Could it be the the fall in commodity prices, and the recent BOJ's US$ 1.35 trillion bond purchase (ensuring easy liquidity) has given unexpected strength to what would otherwise have been a pullback? Further, today's talk of negative interest rate in the Eurozone will ensure more liquidity for the market it seems.
We have to wait and see what happens tomorrow. RBI has always had a hawkish stance towards inflation, and from the RBI commentary on the face of it, we should not expect much to happen. The markets are at a crucial juncture. I was short Nifty and BankNifty, but closed my position quite early as per SL in my comfort zone. As traders, we win some, and loose some. But we always live to trade another day.
BTW, I am wondering how many of the bulls who now say 'I told you so' have had the courage of convictions to hold on to the longs when Nifty tanked from the high of 6,120 in Jan. to the low of 5,480 in Apr.? and have not been stopped out, and are genuinely holding longs since then? Would really like to know one genuine bull who has held on to his position right thru the downtrend. I am not talking about paper traders though!
Cheers and happy trading.
Great trades Sultaan. Nice to know you traded all the way upto within 100 points to the top, down to almost within 100 points of the bottom, and then I presume to the current top again. Congratulations on great swing trades and making tons of money without being stopped out.
Will follow up on your post, so that I can catch some tailwind of your trades!
So what's your next specific level up or down.? If you could post time and levels with actionable triggers, that will be great.
Cheers and Happy trading.
Will follow up on your post, so that I can catch some tailwind of your trades!
So what's your next specific level up or down.? If you could post time and levels with actionable triggers, that will be great.
Cheers and Happy trading.
Courage and conviction are good but it could wipe out the margin, which could have been better if stopped out and re-entered later for better results. The above approach of staying put for 500 to 600 points work for people who already has capital to sustain the downtrend.
What I meant to say, is that people do need a strategy to identify when they should exit their current longs and plan to re-enter at a later point of time. They can stick to their conviction but then they will again need a strategy when to re-enter again so that their trades follow their conviction again.
It could be pure luck that one moved to a profitable position from extreme loss position when the market recovered in the past three weeks. What could have been the situation if one witnessed a bear market similar to the one that happened in January 2008. The fall continued for a good 10K points in Sensex. How would the trader take care of that situation?
What I meant to say, is that people do need a strategy to identify when they should exit their current longs and plan to re-enter at a later point of time. They can stick to their conviction but then they will again need a strategy when to re-enter again so that their trades follow their conviction again.
It could be pure luck that one moved to a profitable position from extreme loss position when the market recovered in the past three weeks. What could have been the situation if one witnessed a bear market similar to the one that happened in January 2008. The fall continued for a good 10K points in Sensex. How would the trader take care of that situation
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