Thursday, May 7, 2009
Reigning The Nifty -- 8th May, 2009
I repeat, (I had already defined it in an earlier post), an Inside Day is a day that has a lower high and higher low than that of the prior day.Simply put, the high and the low of the previous day are not violated. Inference of this is, the market may be catching its breath before another up or down day. It could be indecision between bulls and bears . Or, it may be hesitation by the market players who are wary whether the current trend will continue .
Today's candle was also a bullish engulfing pattern.A big bullish Engulfing pattern observed at the top of a trend usually represents the last gasp of the trend. The "hopeful" are buying once more at the top. This signals that the trend is about to end while the "left outs" are still buying the wrong way.
The half hourly charts show a diamond formation . If it is a continuation pattern the break would be on the upside . If it is a reversal then break would be on the downside. Yes, difficult to say which way it will go and this is what makes trading in stock markets so interesting.
On the half hourly chart a channel has formed , shown in red. The height of the channel is 300 points and a break either way will give a 300 point move.
The Daily Charts show the entire move from 2540 has been within a channel and unless the channel is broken the upmove is intact.
Conclusion, wait for more evidence to go short as the trend is up. If you are still long be hedged.
Happy Trading !!