Chart analysis for 2nd March,2009

Daily Nifty Chart

30 Minute chart

There is not much change in the support resistance levels from what we have been discussing since at least 7 days. Yet for convenience I have put up the charts showing all levels, and patterns. The Daily stochastics is still in buy mode and nifty has held above the 2730 levels once again on closing basis though intra day on friday it spent most of the time under it. Still confused markets and directional trades are difficult to take till breakout/breakdown from triangle.

Lakshmi

http://vipreetsafetrading.com/

Weekly supports and resistances

Weekly Nifty chart

Since nifty has been ranging for about 17 weeks now there is not much difference in the supports and resistance levels on charts of different time frames. Point to note is 50 wema has crossed below the 200 wema , last such death cross was in July, 2001. The bottom was made soon thereafter in september 2001. If the 50wema continues to remain below the 200 wema we may be in for extremely lacklustre markets.

Lakshmi
vipreetsafetrading.com

Bottom near??

Monthly nifty chart

The Monthly RSI (6) has reached levels last reached in September 2001 panic times due to the WTC terror attacks. This shows that we are in extremely oversold conditons and one should look for panic selling to enter markets.

Other parameters to be kept in mind are that since the last four months the nifty has closed on a monthly basis between 2960 and 2755. These levels are thus extremely important for the coming month. Only a break above or below those levels will lead to any sustainable move.

Lakshmi
vipreetsafetrading.com

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magnified action

30 minute chart

The chart speaks for itself as I have marked all important points necessary for trading. Stop losses should be strictly at 2730-35 since the bearish head and shoulder has chances of playing out till 2806 is crossed which is the right shoulder.
Happy Trading !

technicals for 27th feb,2009

daily chart

Nifty played out as anticipated and being long was rewarded. The inverted head and shoulder pattern pointed out yesterday and shown in pink has broken the neckline making possibilities of further upsides more stronger. The nifty must stay above 2781 and will face resistance at 2806-2820. 2823 is the 50% retracement level of fall from 2970-2677. Crossing this level will target 2846-2880-2900-2940. Stop losses can be shifted to 2730-2735 levels which has been a significant level since the last four days shown as pink line on daily chart.

Magnified action

Half hourly chart showing a possible inverted H&S pattern

Half hourly chart

There are bullish patterns forming on the charts which are clearly seen on half hourly charts. The nifty has already broken out of the falling wedge. A falling broadening wedge has formed (shown in red) in the action since 18th feb, which is bullish . Breakout of this pattern could give upside of 100 points. If you look at it another way it could be the forming of right shoulder of an inverted head and shoulders patter. Yes looks like I am a Head & Shoulders freak !!

Confused? Well this is what happens at bottom forming times. Let's just follow price. As mentioned in my daily charts we stay long with a stop at 2661.Lighten positions if we go below 2755 which was strong support earlier, being the neckline of bearish H&S pattern discussed earlier. Else stay long and keep trailing stops till the weekly scenario gets better.

Happy trading!!

Technicals for 26th feb,2009

Daily chart

Nifty touched our second resistance point at 2789 which attracted profit booking, but managed to close 28 points higher. This action confirms the 'hammer' mentioned yesterday. The hammer is a one day bottom reversal pattern . Volumes on the hammer day should be less than that of the confirmation day. That is the only thing lacking as todays volume is less than yesterday's.

So one may take longs with a strict stop of 2661-2677 area. More details in the 30 minute charts.

Magnified action

Breakout from falling wedge but must clear the congestion at 2745-2755 area for further upsides to 2789-2808 .

Daily Chart showing supports & resistance

The nifty almost touched our levels of 2661 mentioned yesterday. The low 2677 made today should act as good support as a hammer , though not a perfect one has been formed. The positive divergences mentioned yesterday helped a good recovery. The daily stochastics has given a buy in the oversold region. So upsides are possible. One could go long with a strict stop loss at 2661 for upsides to resistance points as shown in the chart 2746-2789-2808. If gets resisted at any of these points then sell with a stop above the level to which it rallied. Trade light as the expiry is near.

Day Ended 24th feb,2009

The nifty is hanging on edge of the triangle , very hindi movie heroine like. Let's see if the hero bull pulls her up and saves her or the villain bear pushes her off the edge into the dark pit !

Action magnified on the half hourly charts

Showing Divergence and Hammer

30 minute chart

The bears can spot a head and shoulders bearish pattern and the bulls a falling wedge which is a bullish pattern. Who will win? There is always only one answer-- the homework doing, smart, nifty and diciplined trader! Play short with stop loss of 2755 which is the neckline. And if decisively crosses and stays above 2755 then go long with stop loss at 2709. There are positive divergences on 30 minute charts and a hammer was formed on the 2-30pm candle followed by a big white candle which is a reversal pattern. But since it is on a 30 minute chart it may be signalling a pull back only. Have put up the chart to show u that too.

Technicals for 24th feb,2009

Daily chart
Ranges are frustrating and believe me i dont even feel like writing this update because it is a repeat of sorts. But have to put in an update after everyones request so here I am. Seems like we will be volatile within 2661 and 2950 till expiry. I have marked the immediate supports and resistance levels on the chart.

The stochastic oscillator is in oversold territory. This oscillator compares where a security’s price closed relative to its price range over a given time period. The idea behind this indicator is that the closing prices should predominantly close in the same direction as the prevailing trend. In an upward trend the price should be closing near the highs of the trading range and in a downward trend the price should be closing near the lows of the trading range. When this occurs it signals continued momentum and strength in the direction of the prevailing trend. So when the stochastics moves up from oversold territory it signals that prices are no longer closing near the lower range and a reversal is on the way.

So be on the guard and keep stops on shorts . And of course keep stops on longs too since trading without stop losses is suicide in ranging markets.

Happy trading !

WEEKLY TECHNICALS

Weekly Charts

The overall picture on the weekly charts is much the same as last week . The triangle has still not been broken either way nor has the range of 2500 to 3250 . The lower trendline has been tested for the third time, and resistance has been hit at the trendline joining Jan ‘09 lows and March’09 lows for the third time too making them important resistance and supports. The resistance and support of the two trendlines just discussed for the coming week are at 2925 and 2743 respectively.

Above 2925 the 20wema resistance is at 3059 and the resistance offered by the upper trendline of the triangle is at 3063. Below 2743 nifty is supported by 2661-2570-2500 all previous lows. Break of 2500 could attract short selling till 2250 levels. So watchout for those levels !

Thanx for the fantastic response

dear readers,
I am so happy I started writing this blog. I never expected this huge response. I once again request you all to put your queries in the comment box instead of writing to me on my gmail,so that this interaction could be read by all visitors who have similar queries. I am reproducing an introductory article I wrote on my other blog , http://theamateurtraderschool.blogspot.com/ on July 4,2008.

REMEMBER: Trade what you see not what you hear
There are three types of players in the stock market. I call them The Greedy Bears, The Greedy Bulls and The Greedy Pigs. I am using the word greedy because everyone who enters the stock market is greedy for money. It is the greed to get rich quickly that lures people to the stock markets.The greedy bulls and greedy bears are the professionals , the insiders,the market movers. Their moves are always calculated. The "greedy pigs" are the ones who always get slaughtered. They get sucked into the markets after seeing the success of successful traders. They hang on to these successful traders who dole out tips, most of which has been passed down many many times, rather than basing decisions on their own research.Equity is a risk instrument. Without realising this , they buy on those hot tips only to lose their capital more often than not. The pigs or small investor is a lazy lot.He invests the least amount of energy and time into his trading. He does not have the patience to first understand his risk appetite before putting in his money. Trading needs total involvement . You cannot trade one fine day just because you have the time that day. You have to be with the stock movement to get a sense of the particular counter. It is a lot of hard work. Insufficient planning, knowledge or study, leads the pigs to make reckless moves and generate heavy losses.Just like children need to be educated to ensure a secure future, so too the amateur or novice trader needs to be educated to secure his capital and ensure low risk trading. So I thought I would open a school for them instead of making them parasites of "tips trading'. ( For tips you will find a host of websites).Whats more attractive is it is open to one and all, FREE!! Now you wont have to ask someone what stocks to buy.My school will help to understand technical analysis. Improving on it and trading as per rules of technical analysis is of course your responsibility, because I do not believe in spoon feeding.
I hope to contribute more articles to my school soon
thanx for reading patiently and keep visiting my blog,
Lakshmi

Look what I spotted

looks like i am crazy about heads and shoulders-- not the shampoo cos i dont have dandruff, but the bearish pattern on the 30 minute chart. neckline at 2755 but one could wait for a decisive fall below 2736 -- the recent low made. could give a move of 200 points. Move down may not be waterfall like as stochastics on daily charts is in oversold condition. Best is to use trailing stops for longs as well as shorts in such markets.
happy trading !!

analysis for 20th feb,2009

Daily Chart

Nifty closed above the uptrendline from october lows once again and eluded bearish hopes of breaking down from the equilateral triangle being formed since october 2008 lows. Todays action was in one word, frustrating. It was very sideways in a small range and in technical terms an 'inside day' ---- occurs when the entire daily price range for a given security falls within the price range of the previous day.An inside day often signals indecision because neither the bulls nor the bears are able to send the price beyond the range of the previous day.

To get back to our arguments for a bearish case, even the 23.6% retracement level has not been scaled implying no buying interest. In my opinion, since the last leg up could not even touch the upper end of the triangle, bearish moves are more probable than bullish.

The supports and resistances for tomorrow are shown on the chart and remain more or less the same . Since expiry is just 4 trading days away volatility could be high and following trend indicators could cause whipsaws. For the time being better to follow the oscillator movements.

Happy trading!!

analysis for 19th feb,2009

As predicted the nifty rallied, though weakly. I t could just about retrace 23.6% of the fall from 2970 and then continued the downtrend.and finally closed below the uptrendline from october lows for the second day in succession. However it has not yet broken down from the equilateral triangle which offers support at 2721 for tomorrow.

Further highs will be seen if trades above 2806 and will face stiff resistance at 2870-2880 , an area of multiple resistances as shown in the daily charts. 2880 is also the 61.8% retracement of fall from 2970-2736.

If trades below 2736 then chances of break from the traingle becomes more probable taking support at 2661-2665 being january lows and the target of upward channel break as discussed in earlier posts.

Todays trade was on the weak side technically as even the 23.6% level was not crossed. Thus bias remains negative and one may look for shorting oppurtunities more than buying ones.

some more insight

The 30 minute chart shows oversold position on the oscillators with minor positive divergences. Hence caution to shorts as there could be a pullback within the downtrend. I booked my short position yesterday at 3.oopm trying not to be greedy. My experience is that carrying positional shorts is emotionally draining at times of pullbacks and one tends to cut positions with lower profits or even at a loss. take your own decision though.

happy trading !!

resistances for 18th february,2009

In case of a bounceback first resistance will be offered by trendline from october lows as shown in chart. As the fall was without any minor rallies we will have to look at fibonacci levels for resistance points all of which are marked on the chart.

happy trading!!

analysis for 18th february,2009

nifty broke the first support of 2842 and took support at 2757 very nearly touching the second support at 2755. Now we can confidently say that the inverted head and shoulder pattern has failed and the nifty is in a short term downtrend. The upward trendline from october lows has been broken. now 2755 is a very important level as it has been support on two previous occasions as shown in the chart.If broken can take nifty down to support at 2727-2730 offered by trendline forming the triangle since october lows. breakout from the triangle will take it to 2661.

supports and resistance for 17th feb,2009

nifty has taken support exactly on lower trendline of upward sloping channel which is also the 61.8% retracement level of rise from 2755. If the upward sloping channel breaks then technically the target is 2665 as indicated by the pink line. supports are shown on the chart.

Fibonacci supports for rise from 2661 to 2970 are shown on the chart

50% --- 2815

61.8%--2780

In conclusion shorts can continue positions with a stop loss of 2970 and those who are not short can initiate shorts on any rally .Only sustained trading above 2970 can lead to covering of shorts.Further weakness will be seen if trades below yesterday's low of 2839. Look for breakdown of 2718-2722 levels which would open up further shorts as it would be downward break of the equilateral triangle being formed since october 2008 lows.

Always be hedged as we are still within the broad range of 2500-3240 of last 3 months and when the market is ranging between levels you could get whipsawed.

Happy trading!!

ANALYSIS FOR 17TH FEBRUARY,2009

Daily -- I had mentioned in my post on 12th february about the nifty not able to hold above the 84 sma and likwise it failed this time too , closing well below the moving average.(refer to chart posted on 12th) . On the other two occasions, after an initial retracement from the 84sma, nifty has rallied once again but has been unable to scale the high from which it retraced. We may expect a similar short upmove since it has also found support exactly on the upward channel of the last few days. We remain short with a stop loss of the recent high of 2970 .supports and resistance on daily charts can be seen on the chart.

supports and resistance for 16th february

30 MINUTE CHART

upmove to continue only if trades above 2770 . head and shoulder target (discussed in earlier posts) @3094 and larger triangle resistance @ 3085. trade with caution using stop losses as we are primarily in a bear market and expecting market moving news like the interim budget.

happy trading!!

analysis for 16th feb,2009

30 minute chart


daily chart



the 50 dema has crossed the 84 dsma after 9 months the last such cross being on 23rd may 2008. both averages will offer strong support on declines at 2900-2910. the daily macd has moved above zero line and is in buy mode. the head and shoulder pattern is intact as the neckline has not been broken though tested daily since breakout. however the 30 minute chart shows negative divergence on the oscillators , cautioning longs to take part profits on any rise or keep a trailing stop loss of 2887 being low of last two days.

weekly analysis -- week ended 13th february,2009

WEEKLY

the week was mildly bullish as the nifty traded above the previous week's high and closed towards the high of the week indicating further bullishness may continue next week. however the nifty still remains within the equilateral triangle and the final trend is not predictable within triangles. resistances for the coming week are at the 20 wema which is at 3093 and trendline of the equilateral triangle is at 3091. supports of the triangle is at 2727. only 61.8% retracement of the fall from 3147 has been retraced in 3 weeks in comparison to the fall till 2661 which took only 3 weeks. thus the recovery seems corrective in nature implying any bullish positions should either be hedged or traded with strict stop losses.

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look here

analysis for 13th february

84sma on the daily charts has acted as strong resistance . the circled tops show false breakouts above the moving average. this time too the break seems to be false as after two days of close above the 84sma , the nifty has closed below it today. last two times after the first breakout a fall and then a rally not surpassing the previous top. so shorts could be held with a stop just above the recent high at 2957.40.

on the other hand the head and shoulder breakout point has not been breached. so be on the lookout for a reversal of yesterdays trend and continuation of upmove to the head and shoulders target

analysis for 12th february

the head and shoulder target is very much on the cards as inspite of bad overseas markets the neckline support was not breached. Longs are safe so long as the neckline is not breached decisively. however it is to be kept in mind that timewise this rally has already consumed 12 days retracing just 61.8% of the previous rise ,indicating a weak rally. so tighten your stops. a good stop would be yesterday's low of 2877.
.

analysis for 11th february

the nifty rallied upto 2957 almost the 61.8% retracement (of fall from 3147 to 2661 ) which is at 2961. it retraced to 2891 levels which is the neckline of the inverted head and shoulders pattern in classic text book fashion and recovered smartly towards the end. tomorrow the nifty should continue its upward journey towards it s target of 3000 and then 3100 as discussed in the previous post. the upmove will be under threat only if the neckline is decisively broken

end of day analysis for 6th feb,2009

NIFTY INTRADAY 30 MINUTE CHART SHOWING HEAD & SHOULDER TARGET

NIFTY DAILY

nifty finally managed to breakout of the range of the last few days and closed above the high of 2880 made on 30th january at 2920. the range breakout 2755-2880 of 125 points gives an immediate target of 3006. the breakout from the inverted head and shoulder pattern neckline gives a target of 3104.

resistances for tomorrow are at 2970 which is the 61.8% retracement level of fall from 3147 to 2661. 80% retracement levels are at 3050. resistance of the equilateral triangle as shown in the graph is at 3080. on further rise, partial profits may be taken on longs as the oscillators are moving towards overbought zone on intra day charts .

nifty analysis for week ended 6th feb,2009

monthly charts


after the "waterfall" fall in october, the nifty has made three months of dojis indicating extreme indecision. the range of november month indicated by the november candle --2502-3240 has been unchallenged till now thus making the two extremes important points of support and resistance. the movements from november onwards has formed a n equilateral triangle with suppots and resistance for this month at 2725 and 3100 , a 400 point range. a breakout on either side should give a move of about 400 points

weekly

since november the nifty has closed in a range of 2678-3078 --400 points. only a decisive close above 3078 will give any upside. nifty must trade above 2880 levels for it to gather further strength. only a close above 3080 will give a hope of bullishness. an equilateral triangle is being formed and the weekly breakout point is 3102 and breakdown level is 2715. since equilateral triangles are consolidation patterns the possibility of a breakdown or breakout cannot be predicted.

daily

i spot the formation of an inversted H&S pattern with neckline at 2895. a breakout will give a target of 3112, which incidentally is the resistance offered by the equilateral triangle. the 50 dema provides resistance at 2905 and the 84 dsma which has been an effective trendline for the downturn offers resistance at 2942

expecting a breakout from the neckline of the head and shoulder pattern, we may take long positions with a strict stop loss of 2750