Reigning The Nifty - 31st July,2009

Half Hourly Chart

Daily Chart Showing Channel Target

Daily Chart

• Rangebound and volatile between 4500 and 4600 since last 5 trading days. I am not counting the lows till 4421 as they were swallowed without leaving much trace.
  
• Daily stochastics in sell , Macd in buy and above zero line and RSI14 turned up again and above 50 level. Intraday oscillators strong .
  
• Back above the downtrendline from January 2009 highs. If maintains above it then Nifty could target 5225.
• Moving averages on all time frames are bullishly aligned .
  
• Today was a bullish engulfing candle, which, though appears bullish could be a signal that the trend is about to end as the last of the herd may be buying from the smart traders who are selling. "A big bullish Engulfing pattern observed at the top of a trend usually represents the last gasp of the trend." Tomorrows action should confirm whether it is the last gasp or a fresh breath of air.

Tomorrow is a weekly as well as monthly closing which would help us get a broader view of the action of this month. All time frames are bullish now and i would remain long with a stop at 4380 on closing basis. Keep light till the 4600-4693 levels are taken out decisively.


Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty - 30th July, 2009

Half Hourly Chart

Daily Chart

Twin Dojis after a swift runup was truly ominous and we had our anticipated down day today correcting 144 points from yesterday"s close intraday.


Observations

• Broken below upper trendline of channel shown in red on daily charts, thus opening the possibility of correcting to the lower trendline .
• The breakout from downtrendline joining all time highs of January 2008 and highs made after Budget in May 2009, proved to be false.
  
• Breakdown from the rising wedge shown on daily charts maintained for second consecutive day throwing up a technical target of 3906.
• On daily charts Stochastics has given a sell from overbought region and the RSI14 has turned down without reaching overbought levels. Intraday oscillators moving up from oversold levels
  
• Intraday short term moving averages bearishly aligned wheras on daily charts all moving averages continue to be bullishly aligned.

We are in a short term downtrend till the high of 4600-4693 is crossed decisively.
Inspite of the swift fall by 144 points, support came in around the 23.6% fibo level of rise from 3918. Supports are at at 4380 being the previous low made during last week's pull back. 38.2% retracement levels are at 4335. If these levels do not hold we may see 4150-4200 levels.

The rising wedge target is around 3906. Nifty has moved back into the red channel suggesting chances of touching the lower trendline which coincides with the rising wedge target. However the intermediate term is still not bearish so we may focus on the target of 4380- 4335 and then take a view from there.

Since targets are not always achieved one should use a trading stop loss to gain maximum from the downtrend.

Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com

Dear readers

I started writing this blog to put up my personal reading of the markets, especially Nifty, so that I have my views & ideas chronicled and for ready reference in future . The views are based on my judgement technically with the information available to me at the particular point of time. I once again reiterate,

All the calls made in this section are for my personal learning /research only. The calls are based on my judgment and the information available at the particular point of time. Adequate precaution has been taken while writing the analysis. However, no responsibility is taken for the losses or gains made through the analysis, either legally or otherwise. Readers are advised that acting on the analysis is at their own risk. Stock Market trading involves risk and is a high risk & high return business and I do not accept any financial and/or legal responsibility arising from the use of the information

This blog does not have any commercial dealings so interpretation of my views for your trading is entirely your responsibility. Please restrict queries/comments to technical knowledge only.


Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty , 29th July , 2009

Half Hourly Chart

Daily Chart showing rising wedge

Daily Chart

• We have twin dojis on daily charts.
  
• Yesterday's lows held and highs were scaled by just a whisker.
  
• The Nifty is moving up in a rising wedge and the lower trendline has been broken but there is a only a sideways movement till now. Anticipate a sharp fall if continues to trade below the trendline.
  
• Oscillators on Daily charts are strong but intraday charts continues to show negative divergence.
• The neckline of the inverse head and shoulder show in green is proving strong resistance.
• Nifty maintains for the third consecutive day, the breakout from the downtrend line drawn from all time highs shown in green on daily charts.
  

Uptrend is intact. However one needs to be cautious considering the fast and steep runup without meaningful corrections, break of lower trendline of the rising wedge and the warning negative divergences on intraday charts.

Resistance and support levels marked on charts.


Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty - 28th July , 2009

Half Hourly Chart

Daily Chart

Observations

• Nifty achieved the target of falling wedge at 4597 and immediately corrected around 70 points.
  
• A doji on daily charts exactly at neckline resistance of inverse head and shoulder formation shown in pink.
• Nifty has managed to cling onto the uptrendline from 3918.
  
• Closed above downtrendline joining all time highs and post budget high for second consecutive day.
• Advance Declines were healthy.
• Negative divergence on intraday charts intact.

There has been no change in the technicals today . The doji at resistance point is a little ominous and one should be tightening their stops on longs. The Nifty needs to cross the neckline shown in pink on daily charts for further bulllishness.

Supports and Resistance levels are shown on the charts.

Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty - 27th July , 2009

Half Hourly Chart

Daily Chart

Weekly Chart

Last week I wrote, "We are once again in the perplexed state whether markets will move up or down. This is the reason we follow price with stop losses instead of making these difficult predictions about the future. Remain long with a stop loss of 4200 for targets of

• 4402 61.8% retracement of fall till 3918
• 4480 previous top
• 4590 falling wedge target --shown on half hourly chart
• 4693 top of rise from 2539
• 4812 channel target shown on daily charts."

Targets one and two were achieved easily firming up nifty's neck further. Lets see where the nifty stands now.


Momentum

• Weekly oscillators are showing strength having started moving up again after a very shallow dip.

• Daily oscillators too exuding strength -- RSI14 and Macd have moved up after taking support at levels above oversold territory which is a sign of strength.

• Intraday oscillators are moving up but shown negative divergence.

Moving Averages are bullishly aligned on all time frames.


Bearish Price Pattern

• The Nifty has moved decisively above the neckline of the bearish Head and Shoulder pattern indicating a flase breakout below neckline. Moving above 4693 which is the head, will nullify the bearishness of this pattern.

Bullish Price Pattern

• Breakout from a bullish falling wedge formed on weekly charts giving a technical target of around 5100.
• Downward sloping channel breakout on daily charts with a target of 5170.
  
• The latest pattern to emerge is a potential bullish Inverse Head & Shoulders pattern and the Nifty is on the verge of a breakout . The upward sloping neckline makes it all the more bullish. Breakout will give a 600 point move.
  

Sentiment Indicators

• Advance Decline line has started moving up supporting an upmove.
• Follow up buying during the week was on marginally higher volume.
• A high put call ratio of 1.30 indicating downsides are limited.
  

Direction is now UP. So long as the 4500 levels are held we can expect higher levels. If the 4500 level breaks on a closing basis then chances of testing 3918 are high. There are negative divergences on intraday charts which may be signalling that a correction is due. The Nifty is near strong resistances and the 700 point rise from 3918 has had no meaningful correction.

Strong support at 4300. One can look for oppurtunities to go long with a stop loss of 4300.


Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty - 24th July , 2009

Half Hourly Chart

Daily Chart

Daily Chart

• Inside Day pattern. Breakout points <> 4558.
• Rsi 14 and Macd stron but stochastic has turned down from overbought zone giving a sell signal.
• Moving averages are bullishly aligned.
• Breakout from red channel.
• A probable inverse head and shoulders pattern spotted, shown the neckline in pink, and offering resistance at 4575.

Intraday Charts

• Intraday oscillators are strong once again .
• Moving averages are once again bullishly aligned.
  
• Spotted a Diamond pattern which is considered a bearish signal, indicating a possible reversal of the current uptrend . The pattern forms when prices are making wild swings turning traders bullish once and bearish immediately after.This formation is not very reliable and may sometimes turn out to be a continuation pattern.
• In the present case the high and low of the diamond coincides with the Inside day pattern's breakout points.

Crossing 4558 -4577 will turn the nifty extremely bullish. However we will first see whether the diamond is going to sparkle or turn into it's original form- black coal !!


Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty - 23rd July, 2009

Half Hourly Chart

Daily Chart

• Nifty reacted at the green trendline shown on daily charts which is joining the January 2008 highs and the may 2009 highs.
  
• Volumes were marginally higher but advance declines were only very marginally skewed towards declines giving us no clue about direction.
  
• Daily RSI and Stochastics have turned down but not shown any weakness and half hourly oscillators are fast approaching the oversold zone.
• The 5,10 &20 ema on half hourly charts are once again bearish whereas on daily charts ema's are all bullishly aligned.
• Nifty is moving in a downward sloping channel and is moving towards the lower trendline where it may find support at 3801.
• Nifty has strong support around 4300 -- Blue TL on daily chart at 4301 , 38.2% retracement of rise from 3918 at 4313, Nifty below all ema's except 200 period ema which will provide support around 4290.

The downmove today was quite sharp suggesting the move will probably continue and find support around 4300.

Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty - 22nd July, 2009

Daily Chart


Half Hourly Chart

Daily Chart

It was a day of consolidation after the sharp run up , with a higher high and a higher low on Daily Charts. Overhead resistances are many, so good momentum and volumes are necessary to overcome them. The Daily Oscillators are strong and that of half hourly charts are in neutral zone. We can expect consolidation for some more time till the intraday oscillators are oversold.

I have drawn a new downtrending channel shown in red, which I would be following , rejecting the channel earlier drawn, shown in blue on the second Daily Chart. This is beacause the new one is more well channelled.

All relevant levels shown on charts.

Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty - 21st July, 2009

Daily Chart

Half Hourly Chart

Bullish Observations

• Moving Averages bullishly aligned on all charts.
• Oscillators on daily and intraday charts strong, daily macd moved above zero line in buy mode.
• Breakout from falling channel confirmed with huge white candle giving a target of 4810.
• Having scaled the 61.8% retracement levls of fall from 4693-3918, clearing 4693 is a strong possibility.
• Advance Decline figures is strong.
  

Bearish Observations

• Rising wedge on half hourly charts, break down of which could lead to some correction.
• Trendline joining January 2008 peak and recent high at 4693 will be strong resistance.
• 61.8% retracement of fall from 6357 to 2252 offers resistance at 4788.
• Rise has been too sharp so possibility of a correction is high.

Continue with longs keeping a trailing stop loss of 4300.

Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty - Magnified Action-20th July,2009

Half Hourly Chart

Spotted a rising wedge on the upmove from 3918 which is bearish if breaks down.
Sorry for adding to the confusion but my startegy remains the same i,e. Long with stop loss of 4200 or break of the rising wedge decisively.

Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty - 20th July,2009

Half Hourly Chart

Daily Charts

Weekly Chart showing Falling Wedge

Weekly

The market undermined Nifty's capacity since the neck was broken. Nifty was stronger than expected and managed to run up and repair most of the damage.
Is the the neck firm once again ?

Oscillators

• Weekly Oscillators moved down from overbought levels but just that much to show the downmove as a corrective move.

• Daily Oscillators are bullish with the RSI14 and Macd having taken support at levels held since November 2008, and the Macd giving a buy once again. The stochastics has reached overbought levels but going strong.The oscillators have crossed their earlier peaks showing way to the Nifty to do the same.
• Intraday half hourly oscillators have shown mild bearish divergences.
  

Moving Averages

• Weekly Long and Short term moving averages bullishly aligned.
• All moving averages are bullishly aligned excepting the 10 and 20 demas which however are moving up and are also bullishly aligned with the 50 dema.
• Bullish alignment of moving averages on half hourly charts.
  

Bearish Price Pattern

• The Nifty has moved decisively above the bearish Head and Shoulder pattern indicating a flase breakout below neckline. Moving above 4693 which is the head, will nullify the bearishness of this pattern.

Bullish Price Pattern

• Breakout from flag formation on weekly charts indicating fall from 4693 was consolidation.
• Falling wedge formed on weekly charts which is bullish.
• Downward sloping channel breakout on daily charts (I had shown it as a flag formation on weekly charts on the 13th July post).
• Falling wedge on half hourly charts.
  

Sentiment Indicators

• Advance Declines improved considerably all of last week.
• Put Call ratios is at 1.16 indicating market is overly bearish.
  

We are once again in the perplexed state whether markets will move up or down. This is the reason we follow price with stop losses instead of making these difficult predictions about the future. Remain long with a stop loss of 4200 for targets of

• 4402 61.8% retracement of fall till 3918
• 4480 previous top
• 4590 falling wedge target --shown on half hourly chart
• 4693 top of rise from 2539
• 4812 channel target shown on daily charts.

Raise the stop losses as per your risk profile in case markets rise as per the targets.


I would prefer to be light in my positions and wait for breakout from the top of 4693 or from the falling wedge on weekly charts to get 100% bullish, and look for a break of the neckline once again to be bearish.


Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty - 17th July, 2009

Half Hourly Charts

Falling wedge

Daily Chart

Though the day's trade was disappointing, Nifty's neck remained untouched. Daily momentum seems to be supporting an upmove. A falling wedge is spotted supporting an upside. So long as Nifty's neck remains intact, we can expect a breakout of the falling wedge, opening up possibilities of more upside.

Daily oscillators are showing strength and intraday oscillators are correcting their overbought condition. A weekly close above 3905 will keep hopes of recovery alive.

Nifty is directionless as of now making positional trading difficult. Taking nimble trades would be the right thing to do.




Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty - 16th July, 2009

Half Hourly Chart

Daily Chart

Nifty's neck is once again strong and everything seems to be supporting it. But the head has to approve. So there are hurdles put on the way which if surpassed the head will be more than happy to approve further advancement.

Hurdles are marked on the chart.

"Excuse me", say the daily short term moving averages , "we are still bearish, though we are already trying to shake off the bearish stupor".


Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty - 15th July, 2009

Daily Chart


Half Hourly Chart

The Nifty broke out of the falling wedge giving us the anticipated pullback. Yesterday's hammer proved bullish and was confirmed by today's huge white candle. Advance Declines improved considerably but volumes were not very impressive.

Intraday charts

• Moving averages are all bullishly aligned once again except the 20 and 50 period. However all the moving averages are below the 200ema reminding us not to go gungho about the rise.
  
• Oscillators are looking strong and reaching overbought levels.

Daily Charts

• Bullish candle confirming hammer pattern.
• Stochastics in buy mode from oversold region. RSI 14 taken support at levels maintained since October 2008 and Macd at levels since January 2009.
• Moving in a downward sloping channel, a breakout from which would be very bullish. Resistance for tomorrow is at 4380 and support at 3938.
• 4190-4212 will be very strong resistance where we have the neckline and the 38.2% retracement level of fall till 3916.
• Moving averages are bearishly aligned .

The view from above analysis would be that this is a pull back till we have more evidence of bullishness. Till then have a strict stop loss of the hammer's low of 3916 on longs.


Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty -14th July, 2009

Daily Chart

Half Hourly Chart

Today was a down day again and we reached the first pattern-rising wedge -target of 3916. The candle formed on daily charts shows support at lows and is a badly formed hammer. So though we cannot term it as a hammer yet it has qualities like a small real body, long lower shadow and a close towards the high of the day, which would goad us to anticipate an upmove.

The intraday oscillators are oversold and beginning to move up. The ROC12 has given a positive divergence and Macd has give a buy signal. On daily charts, the stochastics has given a buy in the oversold region. Macd and Rsi 14 have managed to remain above the supports (shown in charts of post for 13th July). All these points towards a pullback.

However one must remeber that we are in a downtrend. The intraday moving averages are all bearishly aligned and the short term moving averages on daily charts are also bearishly aligned. Till these averages get bullishly aligned upmoves should be viewed with suspicion.

Expect a pullback on breakout from the falling wedge shown on intraday charts. targets will be set after breakout. I would lighten shorts and wait for an oppurtunity to short at higher levels.

In case the downmove continues we could expect 3700-3600. For exact targets refer charts.

Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty -Magnified Action -13th July,2009

Half Hourly Chart

Fall in a downward trending channel shown in pink. If breaks below it then target is 3517.
Leg down from 4480 is shaping like a falling wedge shown in red dotted line. If breaks out from this then we could have some upside.

Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty - 13th July, 2009 - Weekly

Daily Chart showing RSI close to support




Weekly Chart

Daily Chart

Half Hourly Chart

We had a newsy day yesterday--Infosys results which was good and the declaration of deficient monsoons which was bad. Reacting more to the bad news, the market slid to sub 4000 levels. This was expected as we dont expect Nifty to rund up with a broken neck !! So bloodbath it was. It will take a lot of doctoring to nurse the neck back to it's original shape.

Important Observations

• With the weekly finally registering a lower low we declare the intermediate term bearish. The dips are no longer bought, but the rallies are being sold into.
  
• The weekly oscillators are in sell mode excepting the Macd which is converging bearishly with it's signal line.
  
• Daily Stochastics has reached oversold zone , RSI 14 and Macd are reaching important support (view on chart).
• The intraday oscillators are moving down furiously after making a weak attempt to move up.
  
• Three price patterns observed -- Rising wedge -target 3925 , flag pattern- target 3730 , Head and shoulder -target 3570.
• Taken support exactly at 61.8% retracement level of rise from 3534.
• 38.2% retracement level of rise from 2539 is at 3870 and 50% at 3611.

So we are in a downtrend and the momentum is supporting . Targets for the down move are between 3900 to 3600. Timing is difficult so we stay diciplined and look for shorting oppurtunities till we get evidence of a change in trend.

Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty - 10th July, 2009

Half Hourly Chart

Daily Chart

We have a doji today . Daily oscillators flattened for the day, RSI 14 yet not reaching oversold zone. Nifty traded below neckline all day making weak attempts to go up but ended making an extremely lower top compared to previous day and a lower bottom.

The half hourly chart does not have much to say . A breakout from a falling wedge formation can be seen on the charts. The oscillators have moved up from the oversold zone and shown positive divergences too but an upmove is still eluding.

The support of uptrendline from 2539 on weekly charts is at 4472. So in all probability the nifty will close below the trendline this week, adding to the bearishness. The flag formation on weekly charts has support at 3980 ( view weekly chart in my post for 6th July).

The doji, positive divergences, breakout from rising wedge, may lead to some pullback to the neckline which is at 4180.


Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty - 9th July, 2009

Half Hourly Chart

Daily Futures Chart

Daily Chart

Yesterday's comment was,"Today's movement was in an equilateral triangle, and the coiling might end tomorrow giving us direction. The break should be in the downward direction but trading above 4223-4230 will give an upside breakout".

The Nifty resumed it's down move and broke all supports and is now on the brink of the free fall zone --- the non traded zone of post election gap opening. I have put up the nifty futures daily charts to show this as the gap up opening is not viewable on nifty charts. On sensex the level is at 13480. Advance Declines were highly in favour of declines. Volumes on today's fall was much higher than on yesterday's tepid rise.

Amongst the Daily oscillators, stochastics is in oversold zone and macd has moved below zero. Rsi 14 is yet to reach the oversold zone. The intraday oscillators are all attempting to move up from the oversold region. So the short term is getting oversold and one needs to be careful with shorts. Booking partial profits on shorts would be advisable as we could expect a pullback soon to correct the oversold condition. Rest of shorts can be carried with a stop loss of 4250 or 4480 depending on your risk taking capacity.


Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com

correction

Please read Reigning the nifty -8th July, 2009 again as I have corrected levels mistyped. Thanks Nishit for pointing out

Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty - 8th July,2009

Half Hourly Chart

Daily Chart

Choppy trading , directionless, could not scale even 23.6% retracement of yesterday's fall, but held neckline support. Advance decline was marginally skewed toward declines. Volumes were just average. Daily Oscillators still in neutral zone. Half hourly oscillators are moving up from oversold region, so the action today was nothing more than correcting this oversold condition. In short a nothing day.

Today's movement was in an equilateral triangle, and the coiling might end tomorrow giving us direction. The break should be in the downward direction but trading above 4223-4230 will give an upside breakout.


Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty - 7th July,2009

Half Hourly Chart

Daily Chart

Yesterday I wrote, Rising wedge formation--a bearish formation-- in the last 10 days of trade, with falling volumes which is characteristic of the pattern. The appearance of this formation reiterates the view that this is the forming of the right shoulder of the Head and Shoulders pattern.

The right shoulder has formed and threatens to break the neckline which is at 4170 tomorrow, as per the daily charts. On half hourly charts it has already broken the neckline though not decisively. The target is 3600.

The fall has been on high volumes and very poor advance decline figures. The earlier low of 4143 has been violated. So we may expect the fall to continue.

The remaining Positional Longs have been stopped out and further strategy would be to wait for a pullback to short the Nifty.

Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com