Reigning The Nifty - 1st June , 2009

Nifty Half Hourly Chart Showing Movement Within Channel

Nifty Half Hourly Chart

Nifty Daily Chart


Sensex Weekly Chart

Nifty Weekly Chart

Nifty Monthly Chart

I wrote, "On the Daily Line charts Nifty has crossed the recent closing high at 4323. This gives a target of 4537 if the channel support of 4260 is held". The support held well and the breakout took the Nifty to 4488 levels. Looks like my target for 4800 mentioned in my posts on 26th MARCH 2009 and 5th April 2009 is now within sight.

You may read the forecast at
http://vipreetinvestments.blogspot.com/2009/03/reigning-nifty-further-insight-26th.html and
http://vipreetinvestments.blogspot.com/2009/04/reigning-nifty-week-starting-6th.html


The month of May has ended with a huge white candle, thanks to the spike after election results. As a result the monthly RSI(14) has moved above the 50 level and the other oscillators too are showing strength. The Nifty maintained itself well above the uptrending trend line and has support on it for June 2009 at 3880 levels. So unless this level is broken on the monthly charts the ongoing uptrend is intact.

The week too ended on a bullish note. The Nifty managed to close above the midline of the channel for the second week in succession. This increases the chances of the Nifty testing the upper trendline of the channel at 4695 stronger. However the oscillators are in overbought zone. There is overhead resistance at 4650- the level from which last fall occurred , 4695 - mentioned earlier and 4800 the 61.8% retracement level of fall from January 2008. I have put up the sensex weekly chart to show that we are at important levels from which we can correct. The coming week would also be the 13th week of the rise from 2539.

The daily charts are also bullish. The fast and sharp retracement of the fall till 4092 on increasing volumes shows that there is money waiting on the sidelines. All oscillators are showing strength once again.The channel mid line supports at 4315-4337-4366-4391-4420 for
5 days of the coming week respectively.

The half hourly charts show the recent breakout move well channeled. The resistance is at 4536-4643 and supprts are at 4442-4540.


Conclusion :

• The trend for the short and medium trend is up so stay long if already entered the markets with a stop loss of 3880-4000 levels.
• Fresh long positions can be taken with proper protection like covered calls. This is only for the savvy trader.
• If you are a novice or an amateur trader wait for a correction to enter.
• Do not take short positions as Indian Markets are once again in demand. Shorts should be initiated only after we have enough technical evidence .
  

Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty - 29th May , 2009

Nifty Daily Chart Showing Supports

Nifty Daily Line Chart Showing Immediate Possible Target

Nifty Daily Chart



Nifty Half Hourly Chart

The trading was volatile but ended in the positive. On the Daily Line charts Nifty has crossed the recent closing high at 4323. This gives a target of 4537 if the channel support of 4260 is held.

The candle charts have however to cross the previous high of 4509. The channel support on candle charts is at 4290. The Nifty has retraced exactly 61.8% at 4255 , of the fall from 4509 to 4092 and it must trade above this level for further upside to 4509-4537.

The half hourly charts show a clear breakout from the consolidation pattern of last few days.All this points to further upsides. However next week is the 13th week into the rally and a correction could set in with strong supports around 4000-4100 levels. It would pay to hedge your longs without being complacent about the rise.

Supports and Resistance levels are marked on the charts.


Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty - 28th May , 2009

Nifty Daily Supports Chart

Nifty Half Hourly Line Chart



Nifty Daily Chart

Yesterday I had pointed out that the Nifty has taken support at 50% Fibonacci levels of rise from 3717. This level held and we had a rise of 160 points !! This negates the bearishness of the evening star pattern I mentioned yesterday.

The Nifty has once again climbed into the upper half of the channel and will attempt to move towards 4300-4350 levels. If it is successful then the Nifty will retest the highs of 4509. The mid line of the channel now offers support at 4265 for tomorrow on the daily charts.

Shorts would have been cut due to stop loss. Longs can maintain stop loss at 3995. Medium term longs can maintain stops at 3700. Till 4509 is crossed satisfactorily we may expect choppy movements.

Today is expiry and direction could be confusing. Best startegy is not to take fresh positions till the picture is clearer.

Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty - 27th May , 2009

Nifty taken support at 50% fibo level of spike on 18th May

Nifty Futures Hourly Chart

Nifty Daily Chart



Nifty Half Hourly Chart

The doji that formed on 26th with a higher low proved to be an "evening star" which is a bearish reversal pattern. Yesterday's candle also closed below the "Inside Day" 's ( formed on the 19th and 20th of May,2009) lower range of 4167.

The midline of the channel was broken decisively by the Nifty , melting through the support of 4150. This midline will now offer resistance at 4250. Good support is available at 4024-4048 fibonacci levels, marked on the charts. If this breaks we have support at 3910-3850 levels which should not be broken for the uptrend to remain intact.

The Nifty Futures chart has support at 4053 the level of the first gap made on Monday , 18th May,2009. Watch out for supports here .A break could mean testing breakout level of 3717 on the spot Nifty.

Keep a strict stop loss of 4270 spot nifty on shorts and a strict stop loss of 3995 spot nifty on longs.

Longs with a medium term view could keep stops at 3700 spot nifty levels.

Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty - 26th May , 2009

Nifty Daily Chart

Nifty Half Hourly Chart

I am in the midst of a power cut due to the cyclone in kolkata so will give a brief write only.

Today's trading was sideways within a seventy point range ending the day in a doji . The supports held well, the consolidation pattern got an upward break and a retest of the trendline from which it broke out . The correction of the last rise from 3534 has corrected almost 38.2% and shows signs of resumption of the uptrend by making a higher high and higher low today after 3 days of lower high and lower lows.

Among the daily oscillators only the stochastic is moving down . RSI is still in the overbought territory but has not moved down. Macd is moving higher . The intra day oscillators have started moving up and are showing strength .

Weakness will be seen only after break of the midline of the channel which has supports at 4186-4212 for tomorow.

Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty - 25th May , 2009

Nifty Monthly Chart

Nifty Monthly Line Chart

Nifty Weekly Chart

Nifty Daily Chart

Nifty Half Hourly Chart

The week gone by was extremely heady and the market players are yet to come to terms with the circuit hits . The huge gap (visible only on the sensex charts ) of 1220 points is still intact and will be a great cushion for the uptrend. I would prefer to lay down a case for both the bullish and bearish scenario and see whether the bulls have more chances of winning or the bears.

Bullish Case

• The gap up area between 12256 and 13380 is not violated.
• The Advance Decline line has been showing a sharp upmove indicating bullishness is not confined only to the blue chips, indicating retail interest.
• Third weekly closing above the 200wema and 50 wema .
• Taken support on channel mid-line (line joining tops of this rally) on daily charts.
• Oscillators on the Daily Charts suggest sideways correction which may lead to resumption of uptrend without much damage to the bullish scenario.
• Sideways consolidation seen on intraday charts in line with the pattern seen in the current upmove. A breakout on upside is seen on half hourly line chart from this pattern.
  

Bearish Case

• We are into the 12th week of continuous uptrend.
• Weekly oscillators are moving into the over bought area.
• Highs made at 4509 did not attract follow-up buying, and the nifty has corrected 42%.
• Negative divergence on daily charts continues.

Conclusion

At this juncture it is easier to point out more bullish points than bearish points. One would be better off being bullish and buy on any dip. Unless 4150 levels are broken, we can see the nifty moving within the upper half of the channel . If the nifty breaks down from the upper half of the channel there is strong support at 3985 and then at 3710.

Happy Trading !

Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty - 22nd May , 2009

Nifty Half Hourly Chart

Nifty Daily Chart

Yesterday we had an Inside Day and were hoping for a breakout from that range. But today's candle too remained withing the range of 4509-4167. The half hourly shows a consolidation/distribution pattern. The support of the consolidation pattern is at 4210-4191 and resistance is at 4308-4278.

The price action shows more probability of a downside break. Trading below today's low of 4200 wll find supports at 4167-4135-4042.

Stop Loss for speculative longs should be at 4042 as break could precipitate a fall to 3700 which would provide good support.

Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty - 21st May , 2009

Descending Triangle

Nifty Half Hourly Chart

Nifty Daily Divergence Chart

Nifty Daily Chart

Yesterday was a long legged Doji, clearly reflecting the indecision of traders. Today was an Inside Day showing a lack of conviction by the traders.

An inside day is when a security trades within the high and low range of the previous day. An inside day is a sign to a trader that the security is taking a breather from the primary trend, or is in the early stages of a counter trend move. So we are into the second day of indecisiveness. Only a move above 4509 or below 4167 will set the trend for the coming days.

The Daily charts show that negative divergence is intact inspite of the sharp upmove. Todays open and close was below yesterday's close showing no buying conviction.The half hourly charts magnify today's move for us as a decending triangle. This means the break should be on the downside. A break below today's low of 4244 will find support at yesterday's low of 4167. A break of 4167 will find support at 4103-4126 levels . On the upper side today's high of 4363 and yesterdays high of 4509 are resistances.


I have drawn a parallel channel to the channel in which nifty was trading till the 15th of May, 2009. The upper end of this channel will offer stiff resistance.I have marked the resistance and support levels on this channel.

A point to note is that the broader market was rising as advances outnumbered declines by 3168 shares ! This is seen after a long time.

Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty - 20th May , 2009

Nifty Half Hourly Resistance Chart

Nifty Half Hourly Support Chart


Nifty Daily Chart

I was feeling disoriented since yesterday and was really glad to have a normal day with a little correction and some rallies. Today's candle was a long legged doji. This candlestick has long upper and lower shadows with the Doji in the middle of the day's trading range, clearly reflecting the indecision of traders.


On the day of the Doji pattern, the market moves both upward and downward, but cannot commit either way. After a long uptrend, this indecision could be viewed as a time to exit one's position, or at least tighten stops. Reducing one's position size or exiting completely could be an intelligent move.

It is important to emphasize that the Doji pattern does not mean reversal, it means indecision. Doji's are often found during periods of resting after a significant move higher or lower; the market, after resting, then continues on its way. Nevertheless, a Doji pattern is a great sign that a prior trend is losing its strength, and taking some profits might be prudent.

We have retraced more than 50% of fall from January 2008 highs and into the 11th week of the rally. This strengthens the above view of call for prudence.

Resistance and supports are marked on the charts.

Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty --19th May, 2009

Nifty Daily Chart

Nifty Half Hourly Chart

Nifty half Hourly Support Chart

Sorry for posting late but am still to come out of the numbness brought about by todays trading. Luckily I stuck to technicals and was holding long hedged positions. Hoped to book profits partially but the markets did not even give time to blink the eye.

The question is now what? Well I would still say stick to technicals. Do not take fresh positions till things calm down. There is no need to swear off FnO. Take hedged positions at newsy times though it may mean lower profits, the important point to note is we make lower losses in case the market goes against us..

The next target is 4800-4900 with minor resistances at 4558 and 4650. Other supports and resistances are marked on the charts.

Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty --18th May, 2009

Target 4900 !!

Nifty Weekly Chart

Nifty Half Hourly Chart

So the fog has cleared and the sun is shining brighter than expected. The market action showed that the outcome of the elections would be good was being discounted, as it rallied in anticipation and closed positively for the tenth week in succession.Now the question on every trader's mind is Gap Up opening and how much? I dont believe in wasting time on uncertainities. So back to technicals and logic.

I had mentioned yesterday that the stochastic on daily charts suggested that there is no inherent weakness in the market, and the market rallied by 78 points inspite of uncertainity of the election results. This proves the bullish bias that the markets are having .

The Weekly Charts look strong with the 200wema scaled for the second consecutive week. Ten weeks into the uptrend. Oscillators show strength and room for more upside. The Macd is now moving up above the zero line. The risng channel has resistance at 4082 and support at 3691 for the week.

The Daily charts have shown negative divergences but no other bearish signs. Fridays candle managed to once again close within the rising channel. Support at 3534 has strengthened and only a break of this support will call for any caution.Nifty has been moving in a sideways range between 3534 and 3717 over the last couple of weeks. On 13th I wrote, "Congestion zone of 3534-3717 continues with volatile intra day moves. In the ongoing rally we have seen trading ranges after sharp upmoves and then a breakout from the range to make new highs. I have marked these ranges on the daily charts . We have yet to see if this range too is going to give us a new high or break down . Break any which way would give a move of 183 points (3717-3534=183)." This view still stands. So the first target could be 3900 (3717+183=3900).

Other targets are marked on the charts. More after we see tomorrows action as markets may behave irrationally .

The 4900 target has been shown on bar charts . Earlier I had shown this on the Line charts as 4800.

I was warning about having hedged positions as moves at such times are highly unpredictable. Hope you all took heed..

This is in reply to queries about what to do about short positions : I would cut my short and take losses rather than get emotionally drained. Being a chameleon pays

Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty - 15th may, 2009

Sensex Daily Chart

Nifty Daily Oscillator Chart

Nifty Daily Charts

Nifty Half Hourly Chart

I mentioned yesterday, "If, however, the Nifty plummets the day after the harami candle takes place, then there is an increased likelihood that a Minor top may be in place.Let us see whether this bearish signal works its way to a breakdown".

Well, the nifty plummeted on open but soon managed to rally towards yesterdays close.Then down again and then ranged. The price action was indicating more confusion than a definite move in the downward direction. So it was a down day BUT held the four day support of 3534. Confusion again in coming to a conclusion whether one should be bearish or bullish. At crossroads once again.

Well the rising channel has finally been violated. So that's bearish.We may take some time to cross the high of the rally at 3717, and the channel break target is 400 points --3603-400= 3203 -- as mentioned earlier. Remember : targets and technicals don't work at newsy times --- election results are due. Have put up the sensex chart which shows the gap down opening from the channel more vividly.

Negative divergences persist.All oscillators are moving down except the stochastic which on daily charts has given a buy once again and moved above the 50 levels. This shows that the moves though appearing weak and frustrating may not be all that bearish.This strengthens the view that the trading range of 3534-3717 is not yet violated and we have strong support at 3517 to 3300 so the Nifty may not really tank.

You can read interpretation of stochastic oscillator here http://vipreetinvestments.blogspot.com/2009/02/technicals-for-24th-feb2009.html .


Further strong supports are at 20dema at 3495 and 200dema at 3416. The money waiting on the sidelines may provide the required cushion at these levels. We must keep in mind that the weekly (intermediate) charts are bullish and the monthly charts too show signs of recovery. Thus I would use dips to get into the markets and hedge it appropriately for any unpredictable falls.


Conclusion. Remain hedged on longs and neutral on speculative positions till the fog clears.



Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty --14th May, 2009

Nifty Daily Chart


Nifty Half Hourly Chart

Today the candles formed a Bearish Harami pattern.

A Harami is a two day pattern. Immediately preceding the harami candle, there should be a large, real body clear candle. When this candle occurs, the bulls appear to be fully in the driver's seat.The next day, however, a small real body candle appears within the larger real body. This is the harami candle. The reversal signal is more potent if it is the opposite color, as this color change shows that the advance has stalled. The bears are now on strong ground and are engaged in a struggle for power with the bulls. The upper and lower shadows can be of any size, and could even go above the real body of the clear candle day.

The next day's candle -- the one that follows the harami candle is important. Sometimes harami merely signifies that the stock is entering a period of consolidation . If, however, the Nifty plummets the day after the harami candle takes place, then there is an increased likelihood that a Minor top may be in place.Let us see whether this bearish signal works its way to a breakdown.

The Daily oscillators are weak showing negative divergences and in sell mode.

Congestion zone of 3534-3717 continues with volatile intra day moves. In the ongoing rally we have seen trading ranges after sharp upmoves and then a breakout from the range to make new highs. I have marked these ranges on the daily charts . We have yet to see if this range too is going to give us a new high or break down . Break any which way would give a move of 183 points (3717-3534=183).


The rising channel support for tomorrow on the daily charts is at 3603. Other supports and resistances are marked on the half hourly chart.



Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty --13th May,2009

Nifty Daily Chart Showing Possible Target

Nifty Daily Chart

Nifty Half Hourly Chart

Today's upmove recovered all ground lost in the last two days. The upward channel that the Nifty is moving in proved good support once again. This is in keeping with the pattern that Nifty has followed in this upmove from 2540. The huge bull candle at this key support makes the support level very important. I would consider 3534-3517 as stop loss for longs.


The Daily Charts shows breakout from a pennant. So one can be long with a stop loss of 3534 . If the resistance of 3517 is taken out we have an immediate target of 3898. However, the negative divergences are intact. The stochastic is in sell mode and moving down inspite of the sharp upmove today. ( You can find the interpretation of stochastic signals in my post on 24th February, 2009.You can read it here--- http://vipreetinvestments.blogspot.com/search?q=stochastic)

So be sure to be hedged. The channel support on daily charts is at 3570 for tomorrow.

The supports and resistance levels for tomorrow are marked on half hourly charts .

Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty- 12th May,2009

Nifty Half Hourly Chart

Nifty Daily Chart

Today's fall was without any bounce. It was one way.

I had shown channel support on Daily Charts at 3530 and the Nifty took support at 3534.55, very close to the support. The Inside Day range finally broke down on a closing basis. So this calls for some more downside. But the uptrending channel is intact and will we see the Nifty taking support on it once again on it at 3556 ? If not , then we have good support of breakout point at 3517. The 200dema offers support at 3410.


The half hourly charts show a downtrending channel (shown in pink) from which we have a breakdown today. Target is 3475. This coincides with support from uptrending channel (shown in red) at 3462-3477. The uptrendline from 2539 offers support at 3535-3560. 23.6% retracement of rise from 2539 is at 3440.

The half hourly oscillators are reaching oversold levels . We may find support at any of the above levels.


Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com