Reigning The Nifty - Week Ended 30th October, 2009

 Weekly Chart

Breakdown from support of 4950 on high volumes  and break of uptrendline from March 2009 lows. This declares the trend down decisively.



Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty - 30th October, 2009

Nifty took support around the breakout level of 4743 forming a big black candle on huge volumes.. The channel break target  mentioned in my post of 23rd October has been achieved. The daily chart shows support at 4700 and  4610

The Rsi14 has moved below the March 2009 levels and Macd is now negative below zero line. Stochastics languishes in the oversold zone. All pointing to bearishness.

Daily Chart

 Half Hourly Chart

Tomorrow is the weekly and monthly closing and we should focus more on the closing price.The weekly support on the uptrendline from March is at  5052. The Inverse head and shoulder neckline is at 4655. Hence if the close is below these levels  then the Nifty is in for a good downside.Refer to weekly charts posted on my write up for 26th October.


Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty - 29th September, 2009

 Daily Chart

 The lower top lower bottom continued on good volumes but with the silver lining of having found support at 4785 levels.The 50dema is now proving good resistance and is at 4856 levels. The channel break target of 4750 was almost achieved.The downtrendline of fall from 5182 offers resistance at 4930. Oscillators Rsi14 and Macd have broken their respective August supports and stochastics has reached oversold zone.

Half Hourly Chart

Support and Resistance levels  marked on chart.



Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty - 28th October, 2009

Daily Chart

• Big Black Bearish candle on high volumes.
• Close under 50 dema. 
• Close below strong support of 4900.
• Next support comes at 4785. 
• Channel break target is at 4750. 
• The neckline of the inverse head and shoulders is at 4700. 
• Incidentally 4700 is the 38.2% retracement level of rise from 3918 to 5182.
  
• Daily oscillators have moved below their August lows corresponding low of Nifty is 4353.Remember momentum precedes price. So a test of this level is very much possible.
• Daily stochastics in oversold region. so a bounce could be on the cards.

Half Hourly Chart

• Supports are at 4785-4760-4700-4575.
• All half hourly oscillators are in oversold region and the Rsi14 has shown a positive divergence.
  

Seven days of continuous fall and a loss of 350 Nifty points. Oscillators are oversold and important supports are approaching. Caution on shorts as a bounce may be in the offing.

Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty - 27th October, 2009

Daily Chart

 Bearish day with break of the "inside day" pattern on the downside. Highs are being sold into religiously.However, Nifty still trades above the uptrendline joining lows from 4904 . The Nifty has taken support exactly on the line today. The support for tomorrow is at 4974.

Half Hourly Chart

Break of trendline support at 4954-4958 will take to 4921-4904 which will prove as decider for further upside or downside.

Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty - 26th October, 2009

Weekly Chart

Daily Fibonacci Chart

Daily Chart

We have an inverted hammer on the daily charts. Or is it a shooting star ?Also an "inside day"

An Inverted Hammer forms when the Upper Shadow is longer than the Real Body and the Lower Shadow is small or non-existant. The Inverted Hammer is the same as a Shooting Star, only the Inverted Hammer appears at the end of a  downtrend, whereas the Shooting Star appears at the end of an uptrend.We have a long term uptrend and a short term downtrend. So which one is about to end?


 This will be debatable till we see tomorrow's action. The inside day  pattern gives upward direction above 5064 and downward direction below 4968. We could however also try to queue up evidence to see whether they are favourable to the bears or the bulls.

Momentum

• Monthly oscillators strong. Stochastics in overbought region.

• Weekly Oscillators have started moving down from  the overbought region after showing negative divergence.

• Daily oscillators have moved down from the overbought region .RSI14 is yet above the 50 level, Macd in sell and stochastics in oversold region. All of them have moved below their respective September lows.
  

• Intraday oscillators have moved up weakly from oversold region.

Moving Averages
Weekly charts.moving averages are bullishly aligned
Daily charts the 5 and 10 ema are bearishly aligned
Intraday charts only the 50 and 200 remain bullishly aligned.
Nifty is trading below the 20dema.


Sentiment Indicators

Market breadth was  negative for the week

Volumes were very low.

Put call ratio which was at 1.50 last week has fallen to 1.29  supporting a further  fall.


Bullish Price Pattern

Inverse head and shoulders breakout has been maintained for the ninth week . Therefore, the neckline , shown in pink on weekly charts , becomes strong support. The level for this week is at 4655 .


Bearish Price Pattern
The channel break shown in my post for 23rd october , with a target of 4750. You may read the post here, http://vipreetinvestments.blogspot.com/2009/10/reigning-nifty-23rd-october-2009.html



My views

Bearish. pointers

1. The first sign of weakness was the break of support at 5077. 
2. The confirmation of weaksness came when the uptrendline from March lows was decisively broken.on 22nd , Thursday on Daily Charts.
   
3. Daily oscillators have broken their September lows which is 4580 on the Nifty and one of the tenets of technical analysis says"momentum precedes price". So the Nifty could test the next support level of  4921 .
4. Channel break gives a target of 4750.
5. Moving averages are not a rosy picture anymore.

Bullish pointers

1. The uptrendline from March lows on the Weekly charts is intact .
2. On daily charts, the  support of 4921-4904 is holding as of now. 
3. The inverse head and shoulders pattern breakout is still valid.
   

A lot of bearish pointers. But the bullish pointers which are on weekly charts are very significant.  The trend thus is still UP. The fall of the last few days may be an ongoing correction in the uptrend till proved otherwise.

So,  I declare my Verdict  as  "Caution. Remain on sidelines " rather than "Bearish" .


Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com

Extending Trading Hours

 Hot topic. I seriously did not want to write about this but I have got a number of mails asking me about  my views. Yes, like you all I too am extremely irritated and anguished about it. Long working hours was a catalyst in my leaving my bank job !!  Now I am back in the same boat. 9 to 5 should be assumed as 8 to 6 or 7 or more.

 I would want to talk only of how it is going to affect us, the traders.

• Trading , especially day trading is a mentally tiring job and I am sure day traders will be the most affected. 
• Positional traders , even the short term ones, who rely only on technicals will be the least affected .
  

 We cannot fight the system . So better accept it and adapt your trading style to the changes . But dont forget that it should  suit your mental makeup primarily . If a trader is mentally strong then no change can affect her/him.

Please post your views in the comment box rather than in my personal mailbox. Interaction could be wider.

Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty - Week Ended 23rd October, 2009

Down week on low volumes.Made a higher high and lower low compared to last week.

Weekly Volume Chart

4950 levels intact .The uptrendline from March lows gave very good support at 4983. The support was hit in the first few minutes and intraday  it was tested 3 times  as shown below.

Intraday

Support for  coming week on this uptrendline is at 5054 and staying above this level will be a herculean task for the Nifty as these levels are proving strong resistance since last two trading sessions.

Weekly Chart

 Weekly oscillators are in overbought region and have moved below the low made on 9th October which is the 4921 level made by Nifty. So the possibilities of this support breaking is high. Target of 4757 mentioned yesterday might be achieved.



Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty - 23rd October, 2009

Third day of a lower low and a decisive break of the uptrendline from March lows. The three day fall has been on increasing volumes every day though marginally. The 5 & 10 dema  are bearishly aligned and Nifty is now below the 20 dema. Amongst the daily oscillators the stochastics has reached the oversold zone . Rsi14 is yet above 50 level and Macd is above zero line in sell mode. Some more selling in store.Next strong support is at 4900-4950.

Daily Chart

 The move from mid August was well channeled and the break gives a target of 4757.

Daily Chart Showing Channel Movement

The intaday charts show supports at 4950-4921. The 161.8% retracement of rise from 4921 is at 4760 coinciding with the channel target .All halfhourly oscillators are in oversold region kindling hopes of a bounce.

Half Hourly Chart

The 200 period ema on half hourly charts , which was a good support since September 2009, has given way and the 5 and 10 ema are in bearish alignment with it.  So "this time it is different" and we may be in for a deeper correction.

The weekly support on the uptrendline from March lows comes at 4983. So be watchful of this level on closing basis.

Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty - 22nd October, 2009

 First sign of weakness confirmed by break and close below 5077. Next level to look out for is the 4921 level. Nifty has taken support exactly at the 50% retracement level of rise from 4921. The 61.8% level is at 5020. If this is broken then a test of 4921 is almost a certainty. Support on green trendline joining recent lows from September 4th is at 5035 to 5050 .  The intraday oscillators are extremely oversold so the possibility of finding short term support at any of these levels is strong.Check out the Half hourly chart for these levels.

Half Hourly Chart

Daily charts show supports at 5064 and 4963.The oscillators are still above their midlevels indicating there are chances of more selling till they reach the oversold zone if the mentioned  supports fail to hold.

Daily Chart

Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty - 21st October, 2009

Daily Chart

Half Hourly Chart

Today was a new high and a lower low on the Nifty on low volumes. Reversal ?  The sensex made a lower high and lower low on low volumes. The uptrendline from March lows is now at 5045. So long as this is not violated the trend is up. 

The intraday oscillators are all weak after giving negative divergences,  and stochastics has reached oversold levels .The 5,10 & 20 emas are bearishly aligned. A falling wedge seen once again. Holding 5077 will keep the trend undamaged.

The daily oscillators too are moving lower after negative divergences.Macd is in a sell since 6th October.

The trend continues to be up but caution on longs is very necessary. A relevant level to watch would be 4904-4950 levels which has held well during last few corrections.

Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty - 20th October, 2009

Weekly Chart

Weekly charts are still bullish The breakout from the rising wedge shown in red has led to a sideways movement and still well above the  uptrendline from March lows.Negative divergences on oscillators persist.Support for the week on the uptrendline is at 4983.

Daily Chart

Daily charts too are positive barring the negative divergences persisting on the oscillators.  Support on the uptrendline for the day is at 5026.

Stop loss for positional longs at 4900 on a closing basis.

Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty - Week Ended 17th October, 2009

Took a look again at the volume analysis  I presented a few weeks back and felt good about it. So got the fillip to analyse the chart once again. The volumes since September has been falling on all up weeks . High volumes were seen on week ended 9th October which was a down week.Profit booking by smart money which obviously got in early .

Weekly Chart

Only conclusion be cautious as volumes are not supporting the rise.Negative divergences on  weekly charts are intact.The trend however is still up. So do not trade short. Trade long lightly , hedged and with a stop loss of 4900 on a closing basis.


Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty - 17th October, 2009

Trend Up.

BUT---

Negative divergences on half hourly charts. Be cautiously optimistic. Trade light and be hedged.

Half Hourly Chart

Happy Diwali  and

Happy Trading !!

Lakshmi Ramachandran

www.vipreetsafetrading.com

Mahurat Picks

It is Mahurat trading time. We have picked up certain stocks which we feel will do if the markets do well.
Also, it is a time of caution, as P/E of nifty is around 23. A staggered buying approach would be good. The picks are by Nishit Vadhavkar  with  a tiny help from me.


 Click on the following link to get the picks

http://groups.google.co.in/group/nav-files/web/Diwali%20Picks2009v1.0.pdf   



Happy Investing !!

Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty - 16th October, 2009

  

Half  Hourly Chart

 Daily Chart

A Doji on daily charts on volumes higher than that of the bull candle days. The action formed a pennant on half hourly charts. Intraday oscillators are working off the overbought condition and daily oscillators are once again entering the overbought zone. Reason to be cautious as weekly oscillators too have been overbought for some time now.The 4904-4950 should be strong support levels which have not been broken since 24th September.

Target remains 5250 with a stop at 4950 .A weekly closing above 4903 will keep the bullishness alive.

Trade long but cautiously.

Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty - 15th October, 2009

 The head was blown off  today adding one more failed head and shoulders in this rally.Shows how powerful this rally is and the wisdom of the market saying  "the trend is you friend".

All intraday moving averages are bullishly aligned and moving up.However the oscillators are all overbought. The rising wedge made by today's movement indicates a pullback in line with the overbought state.

Half Hourly Chart

Daily Charts show  a good follow up to Monday's bullish candle on better  volumes than on Monday. Oscillators are showing strength and moving up once again.Climbing the wall of worry continues

Daily Chart

The immdediate breakout target is 5230. Crucial resistances of previous peaks are at 5298 and 5545

Daily Chart

Trade long but be hedged.

Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty - 14th October, 2009

Daily Nifty Chart

Bullish candle at a  very important support level. The daily oscillators are still  above midline indicating strength. The downtrendline from 5110 has been decisively broken indicating possibility of more upsides  Point of concern is that the volumes were extremely low, hence OBV has to yet give a breakout from the same downtrendline.

In my post on 8th October --view here
http://vipreetinvestments.blogspot.com/2009/10/reigning-nifty-8th-october-2009.html  ,
I had shown a series of failed head and shoulders pattern and mused whether we are in for a similar failure.Technical analysis is based on the fact that "history repeats itself". Lets see whether it repeats here or is a new story going to be written.

The head and shoulder pattern is still valid. The neckline has support at 4940.The uptrendline from March lows has support at 4962.

The Nifty is still stuck in the range of  5110-4920. I would prefer to remain neutral till the range is broken. 








Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty - 12th October, 2009

 A bearish candle with a lower high and a lower low on the weekly charts on rather high volumes. This was imminent when the evening star pattern formed on the very first day of the week.

Daily Chart

The bearishness continued through the week amongst volatility, but the bulls have been holding on rather well. The earlier low of 4904 was not violated.A head and shoulders pattern is seen on daily charts and the Nifty has held above the neckline.

On weekly charts the rising wedge shown in red dashed line has been violated. This has bearish implications. However Nifty has strong support at 4906 on the uptrendline from March lows.

Weekly Chart

The sensex has taken support on this uptrendline. 

Sensex Weekly Chart

Nifty Weekly Oscillator Chart

The weekly oscillators are yet in overbought region after showing negative divergence,  increasing the chances of some more pullback.The daily oscillators have moved down from overbought region but far away from the oversold zone. The Rsi 14 is yet above the 50 level  but the next support is at low made on September 4th which coincides with Nifty's low of 4580.Keep a watch to see if Rsi14 breaks or holds this support.

Daily Oscillator Chart

Moving averages on daily charts are bullishly aligned but the 5 and 10 emas have converged and the 5ema is ready move under the 10ema.Weekly emas are all bullishly aligned.

Among the sentiment indicators, breadth was negative and volumes high .Put call ratio has fallen to 1.28 from 1.38. All these indicators are supporting the bearishness.

Bullish Price Pattern

Inverse head and shoulders breakout has been maintained for the fifth week.Therefore, the neckline , shown in pink in Chart 1 , becomes strong support. The level for this week is at 4655 .


Bearish Price Pattern

Rising Wedge forming since 26th June 2009 shown in Chart 2 in red dash line. This has been broken adding to the bearishness.The target works out to highest point 5110 less lowest point 3918 = 1192 points move down. Point of breakdown 4980-1190=3790. This is only a technical target and may or may not be achieved.

A head and shoulders pattern with neckline at 4937 on daily charts. Break of the neckline will have a down side move of 200 points.

Conclusion

The Nifty is stuck in a range between 5110 and 4920. A break from this range will give a 200 point move. There are more bearish indicators than we had last week.This leads me to be cautiously bearish . Only a move above 5110  or  a fall below 4904  will set the direction for  Nifty. 4906 is the weekly support of the uptrendline from March lows.

Hedging ones portfolio is very important at this juncture.Remain neutral till more clarity emerges.

Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty - 9th October, 2009

Daily Chart

 Daily Oscillator Chart

Coiling on Half Hourly Chart

 

•  Inside day  and a doji  indicating extreme indecision.

• Lower top , lower bottom candle indicating  .bulls not very active.
• Daily oscillators have broken below their respective trendlines from August lows which is a bearish indication.
• Daily Macd in sell since Tuesday, 6th October.
• Head and shoulders pattern forming with neckline at  4929. This now coincides with the uptrendline from March 2009 lows, making it a very improtant support.

A range has been established between 5110 and 4920. Till one of the boundries is not taken out trading will be difficult . The triangular coiling clearly visible on intraday charts is leading to a lot of whipsaws.

Weekly supports are at 4980 and below that at 4830.

The markets are undecided as yet and so the startegy of remaining neutral continues.

Happy Trading !!

Lakshmi Ramachandran

www.vipreetsafetrading.com

Reigning The Nifty - 8th October, 2009

A bearish engulfing pattern confirming the evening star pattern. On the other hand there was a higher high and a higher low candle made.  The previous day's low  was held which is a saving grace to the longs.

Daily Chart

We once again have a head and shoulder pattern forming and have to see whether the neckline gives or the head is blown off once again to make higher highs.The neckline offers support at 4927. Incidentally , the 20 dema is also at 4927 thus making it a very important support. Break of the neckline at 4927,   could have a down move of 200 points from the neckline which calculates to 4727. The neckline of the bullish inverse head and shoulders shown in red is at 4702.

Daily Chart showing failed Head and Shoulders Patterns

The daily oscillators are moving down from overbought region and have made a lower low indicating that Nifty too may break the low of 4904. Nifty has moved below the 5 and 10 demas but all the moving averages are still bullishly aligned.

Half Hourly Chart

 The half hourly moving averages are all bearishly aligned except the 200 period ema. The 200 period ema is at 4938  . Lets see if it offers support once more to the  Nifty. The close held above the 61.8% retracement of rise from 4921. This may see some effort to make a recovery.The green downtrendline offers resistance at 5065-5055 for the day.A breakout and close above it will lead to highs and be in line with what the Nifty has been doing since May 2009.

Strategy remains the same  : Be neutral  till  clarity of direction emerges.



Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty - 7th October, 2009

Weakness prevails with a lower high lower low candle. Strength exhibited by  having found support at the lows. Or is it just that the intraday oscillators had reached oversold zones which led to the smart recovery in the second half of the trading session? Tomorrows action  will help us get the answers.

 Daily Chart

 The support of 4904 held . If this gives way then the uptrendline from March lows, which has support at 4895,  will be under threat . A faster retracement  of the entire fall  will lead to higher levels.
Daily oscillators have not moved down much from the overbought region and this is a sign of strength.

Half Hourly Chart

 The recovery just fell short of the 61.8% retracement level of the fall. The 200ema  provided good support. All the moving averages barring the 5 ema and 200ema are bearishly aligned.The bounce has some more upside as the oscillators are in neutral territory after moving up from oversold zone.

The startegy of remaining neutral continues till we have more clarity about the direction.


Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com

Reigning The Nifty - 6th October, 2009

An evening  star  which is a very bearish three day candle pattern has occured on the Nifty .

The characteristics of the pattern are,

• Existence of an uptrend
  

• The first bar is a large white candlestick

• The middle bar is a small-bodied candle (red or white) that closes above the first white bar. 

•  The last bar is a large red candle. 

• The pattern is more successful if the third candle covers at least 70% of the first candle

In the case of the Nifty, all characteristics have been fulfilled. Also,  the third candle has closed below the low of the first bar increasing the possibility of success of the pattern .

Daily Chart

 The overbought conditions on oscillators and the negative divergence since quite some time add  proof and confirm the bearishness of the evening  star.

Half Hourly Chart 

The fall has retraced more than 50% of rise from 4904. The breakout  level of  5036 is also taken out. 61.8% fibo level is at 4983. A break of this will take it to 4904.  Break of  4904  will give more confirmation to the bearishness of the evenng star .

The final blow will be if the uptrendline from March lows is broken. Support on this trendline is at 4880.

Till  the high of 5110 is taken out  or  we have some other confirmation for getting bullish,  avoid longs. I would be neutral and go short only after a decisive break of the uptrendline from March lows.

Happy Trading !!

Lakshmi Ramachandran

www.vipreetsafetrading.com

Reigning The Nifty - 5th October, 2009

So , the weekly, quarterly and monthly closings are bullish. Every market related blog and newsletter is anticipating a downmove. Maybe that is the reason why the downmove is so elusive. Volumes have been waning in the last three months and the advance decline line too is not keeping up with the Nifty. Negative divergences on oscillators have been ringing alarm bells since some time now.So are the bears coming out of hiding or are the bulls too strong for that to happen ?

Weekly Nifty Chart I

Weekly Nifty Chart II

Momentum

Weekly Oscillators have started moving up again in the overbought region though a higher high has yet to be made to remain in line with the Nifty.


Moving Averages

Moving averages are bullishly aligned.


Sentiment Indicators

Market breadth was marginally negative for the week inspite of the rise in Nifty.

Volumes were very low due to the truncated week.

Put call ratio which was at 1.26 last week increased to 1.38 this week.


Bullish Price Pattern

Inverse head and shoulders breakout has been maintained for the fourth week.Therefore, the neckline , shown in pink in Chart 1 , becomes strong support. The level for this week is at 4703 .


Bearish Price Pattern

Rising Wedge forming since 26th June 2009 shown in Chart 2 in red dash line. This will be invalidated if Nifty breaks out above the uppertrendline which offers resistance for the week at 5270. Support at the lower trendline is at 4980

Daily Chart

Daily charts show a Doji after making new highs.Moving averages are bullishly aligned.The red dotted upward moving channel is intact with support at 5029 and resistance at 5199. Oscillators are exuding strength after wavering in the overbought region. Negative divergences are intact.

Half Hourly Chart

The staircase is getting narrower.

My View

The Weekly charts are still showing a strong uptrend with moving averages bullishly aligned and maintaining a higher top higher bottom scenario.Strong support is at 4830, being the lower trendline support of upward channel shown on weekly chart 2.The uptrend is intact till the break of this trendline.

Daily charts too look strong. A break below 5029 is required to initiate weakness.

On half hourly charts a break below 5057 can take it down to 4904. Weakness will accelerate below this level.

Lower volumes, negative divergences, and overbought oscillators , call for some caution.

Trade light and with protection.


Happy Trading !!

Lakshmi Ramachandran
www.vipreetsafetrading.com