Comments are on the chart...
If you can think of any other good picks, please add in comments on this post.
Best.
Monday, June 16, 2008
Some more picks!
Some more picks...I am thinking of slowly accumulating these over next 2 weeks...As I said before we are at or very close to an intermediate bottom. Please note this is all for CASH ONLY...No FNO...And timeframe I am thinking till end of this year...For now.
Comments are on the chart...
If you can think of any other good picks, please add in comments on this post.
Best.
Comments are on the chart...
If you can think of any other good picks, please add in comments on this post.
Best.
Heres a gem that should not be missed!
After the big IPO hype, here is one stock that we havent heard much about...MINDTREE...See how its consolidating nicely after a small and quick run up...Looks like a bullish flag to me...Buy when it breaks out OR start buying in small amounts right now itself...play with stops with a close below channel indicated above...Please note that this is a longer term play...so only cash...no fno.This one could turn out to be a real GEM in coming days/months...Remember you heard this one here first!
Best.
The Doomsday Channel..Or is it?
Heres the channel of 'doom' that has been playing around for the past few months...This here shows the lines that our market needs to get above to confirm bullishness....Till then chop chop and maybe a good opportunity to pick up some good scrips...I said yesterday...we can get to 4620 and pull back from there...been there done that...now what next?....Maybe we pull back to 4520 area and try once more 4620...above 4620, we can rush to 4700 area and then again pull back...
Honestly I would love to see 4300/4250 so I can load up on bullish positions...But we might not get it...Maybe we only get 4450/4400...But lets not jump ahead of ourselves and see how it plays out...I see market moves as part of a big puzzle...And one by one the pieces should fit into place...!...Its key to be patient..!
Best.
Sunday, June 15, 2008
Market Thoughts - June 16th
Lets face it...Friday was a stalemate b/w the bulls and the bears...Very volatile in a range...Bears continually tried to push down the prices but when there is a such a huge short interest open in the market and majority is bearish, the market will behave like a beachball...No matter how hard you try to push it down, it bounces right back up...!
Coming to this week...As was said last week, the market should try to stage a bounceback to 4620 area first and above that if sustained, we should get to the 4700/4750 area...Well the market held so far...We might be able to see 4600 and 4620 today or some short covering and new buying interest coming into the market. I am not sure if we will sustain above 4620 .. But let us see...From one of these areas, we can open a new wave down...
Earlier I was expecting that we might open a really big 5 down maybe to 4000 or even 3600...But at this point, looking at momentum and other factors, I think max pain might be over or very close to over...Best case for the market right now is for us to touch 4620, sell off from there, and retest the lows. Lets see if this turns out...On the retest, if we hold 4400/4350 or even slightly lower at lets say 4300/4250 area, I think we might be at a very important intermediate bottom. Maybe even the bottom for the year....
In other words, we should look to set up longer term portfolios over next 2-3 weeks is what my gut feel is saying...However I am looking toward market moves over next 2 weeks to confirm my ideas so that I can make a more confident decision.
We are not out of the woods yet but some encouraging signals are there...
Okay here is the hourly chart attached above...You can see what I was talking about in the above writeup...Lets see if it holds...We can set a higher low, double bottom or even a slightly lower low with divergence in indicators - This is what we should watch out for in coming 2 weeks.
Heres the daily now...Same idea even though a very optimistic move is shown here...If the bottom gets confirmed as explained above, expect the above scenario unfolding toward end of the year.
Heres the weekly...Just posting this here to show some caution...See stochastics here...still no indication for a longer term buy...In older posts, I have pointed out how, stochastics and macd crossovers on the weekly generally give very strong long term buy signals...
Coming to this week...As was said last week, the market should try to stage a bounceback to 4620 area first and above that if sustained, we should get to the 4700/4750 area...Well the market held so far...We might be able to see 4600 and 4620 today or some short covering and new buying interest coming into the market. I am not sure if we will sustain above 4620 .. But let us see...From one of these areas, we can open a new wave down...
Earlier I was expecting that we might open a really big 5 down maybe to 4000 or even 3600...But at this point, looking at momentum and other factors, I think max pain might be over or very close to over...Best case for the market right now is for us to touch 4620, sell off from there, and retest the lows. Lets see if this turns out...On the retest, if we hold 4400/4350 or even slightly lower at lets say 4300/4250 area, I think we might be at a very important intermediate bottom. Maybe even the bottom for the year....
In other words, we should look to set up longer term portfolios over next 2-3 weeks is what my gut feel is saying...However I am looking toward market moves over next 2 weeks to confirm my ideas so that I can make a more confident decision.
We are not out of the woods yet but some encouraging signals are there...
Okay here is the hourly chart attached above...You can see what I was talking about in the above writeup...Lets see if it holds...We can set a higher low, double bottom or even a slightly lower low with divergence in indicators - This is what we should watch out for in coming 2 weeks.
Heres the daily now...Same idea even though a very optimistic move is shown here...If the bottom gets confirmed as explained above, expect the above scenario unfolding toward end of the year.
Heres the weekly...Just posting this here to show some caution...See stochastics here...still no indication for a longer term buy...In older posts, I have pointed out how, stochastics and macd crossovers on the weekly generally give very strong long term buy signals...
Nothing yet on this chart...However if stochastics does turn up, we can get a weekly divergence which will be a very strong buy signal for longer term.
Heres the very long term chart...
Now before I said we can go for 3600 as a worst case...However after further analysis this weekend, I think we might not get so far....There is good buying support coming in a lower levels...
Heres the very long term chart...
As posted before...
Of the major bull run that lasted more than 6 years...
Start at 850 Nifty...End at 6350
Nifty.38.2% retracement is 4333
50% is 3667
61.8% is 3002
Now before I said we can go for 3600 as a worst case...However after further analysis this weekend, I think we might not get so far....There is good buying support coming in a lower levels...
And also we have hit very close to the 38.2% retracement...Maybe this is all!
Forever optimistic! ;)
Okay now some speculation here...
Lets say we do set an intermediate term bottom and turn up strongly from here, I do not see the possibility of this being a new bull wave...However it would be just an X wave running maybe till the end of this year..and maybe running very close to all time highs on nifty....After which the next ABC should start target lower lows or maybe even a very long term double bottom...But this is just speculation so lets burn that bridge when we get there ;)
Dont jump in and buy yet...lets wait for some more evidence...Will definitely post here when I buy stocks and which ones am buying...some stocks that look good for me are rpl, reliance, panacea, l&t and some others...Will post a more comprehensive list when I do start buying for longer term....
Dont jump in and buy yet...lets wait for some more evidence...Will definitely post here when I buy stocks and which ones am buying...some stocks that look good for me are rpl, reliance, panacea, l&t and some others...Will post a more comprehensive list when I do start buying for longer term....
Have a good trading day!
Best.
Thursday, June 12, 2008
Market Update - June 13rd 2008
Friends, been quite busy with work and other stuff...this is why I did not post for a couple of days...The other thing is that I had said on last update that market will try to stage a corrective upmove...And I did not see anything for this view to change...which is why I did not post an update..
Today I am starting with the hourly chart...You can see the important lines here...4620 is important resistance right now...If we go above this, we get to 4720/4750 area...But that is the max I am seeing right now for this corrective upmove..
Next heres the daily...Again same viewpoint...different timeframe..You can see how important 4620 and 4730 areas are important in this chart...Write down these numbers if you havent already.
Heres the weekly..Just wanted to illustrate one point here...i.e the weekly stochastics...Meaning unless it turns back up, I do not think it is safe to start buying for longer term...
Now the very long term chart. 
Visit this for a refresher(This was posted a MONTH back):
http://theindianmarketblog.blogspot.com/2008/05/elliot-wave-counts-and-ideas.html
Best...And take care...Let the dust settle...There is no need to rush in...
Today I am starting with the hourly chart...You can see the important lines here...4620 is important resistance right now...If we go above this, we get to 4720/4750 area...But that is the max I am seeing right now for this corrective upmove..
Next heres the daily...Again same viewpoint...different timeframe..You can see how important 4620 and 4730 areas are important in this chart...Write down these numbers if you havent already.
Heres the weekly..Just wanted to illustrate one point here...i.e the weekly stochastics...Meaning unless it turns back up, I do not think it is safe to start buying for longer term...
Now the very long term chart.
This is what I see...For what its worth...
Obviously it is not going to be a straight line down...
Of the major bull run that lasted more than 6 years...
Start at 850 Nifty...End at 6350
Nifty.38.2% retracement is 4333
50% is 3667
61.8% is 3002
Could end at one of above...
At this point I am also favouring 3600 area since A=C approx if that is what it is...
A started at 6350 till 4450 --> 1900 pts
C started from 5300 ---> 1900 pts means 3400 BINGO...Close enough to 3600 give or take...
So let us C...Please note bouncebacks will happen...I expect lets say around 4620...maybe 4750 after which the LAST BIG downside should resume...
Visit this for a refresher(This was posted a MONTH back):
http://theindianmarketblog.blogspot.com/2008/05/elliot-wave-counts-and-ideas.html
Best...And take care...Let the dust settle...There is no need to rush in...
Monday, June 9, 2008
What Next?
We broke some very important supports yesterday intraday but closed above the most important recent support...So what next?
Looks to me like wave 3 of C might be over...If so, we should have some sidewise moves for some time before the next wave down opens...My thought would be to cover if you have any longs and stay flat or try some shorts if confident enough...We might get some upside in coming day(s) to do this....If we are setting up for the 5th wave down of C, believe me you dont want to be holding longs when this happens...Best case might be to take a month long vacation from the markets and then come back and reevaluate.
VIX is slowly going up again...I will be very interested to see if we can get back to 50s area of panic again...This will be a sure sign to get long and start buying for long term also....
Note that we are at 32 now.
These are treacherous times....Comments and Questions Welcome.
Best.
Sunday, June 8, 2008
Market Outlook - Two Possibilities
I think we are at a very significant point in our markets...Its do or die...I am looking at 2 distinct possibilities here..At this point both look equally likely even though my gut feel says its going to be the first one...I also prefer this one since it is going to throw up some significant longer term investment opportunities...
Okay first one below...I have drawn a possible path for this one to take if this is the count playing out...This says the Big C down is running now and we are somewhere in wave 3 of C. This should complete somewhere above 4200 and give a bounceback to 4500/4600....And then the finale till 4000 tgt1 , 3600 tgt2, 3300 tgt3. If we do this and go below 4000, I will say slowly start deploying long term investment funds.
Possibility 2 here...What this is saying is that we have a 4th wave ABCDE going on...Or a triangle consolidation....This says we cannot go below 4400...If it does, this one goes out of the window.
This is obviously the more bullish scenario.
Now both possibilities say short term we are going to bounce back a bit....4400 is key...Watch it.
Okay first one below...I have drawn a possible path for this one to take if this is the count playing out...This says the Big C down is running now and we are somewhere in wave 3 of C. This should complete somewhere above 4200 and give a bounceback to 4500/4600....And then the finale till 4000 tgt1 , 3600 tgt2, 3300 tgt3. If we do this and go below 4000, I will say slowly start deploying long term investment funds.
Possibility 2 here...What this is saying is that we have a 4th wave ABCDE going on...Or a triangle consolidation....This says we cannot go below 4400...If it does, this one goes out of the window.This is obviously the more bullish scenario.
Now both possibilities say short term we are going to bounce back a bit....4400 is key...Watch it.
Some factors are telling me a lot of players are expecting 4440 area to hold....But will the market oblige? Remember - The majority is usually wrong! :)
Best.
Thursday, June 5, 2008
The First Two - PANACEA and IFCI
As promised in previous post, I am looking at 2 stocks here...Not yet advocating a buy...except MAYBE in small amounts...I am in wait and watch mode for now...As I said for next couple of weeks.
First one Panacea Biotech...I have covered this stock once before over here...I think this looks good because even with the general weakness in the market over past few days, this looks relatively strong..Volume also picking up showing strong hands might be picking the stock. Fundamentally also I believe this is a good stock but I am hoping others can comment on this.
The other thing here is the falling channel-long term, that looks like it can be broken to the upside soon...This is a good stock to buy and hold for long term in the next correction...
Next one...IFCI...Now this stock is no stranger to anyone...Why it looks interesting to me even though its a highly speculative stock is because of how it has held up the 60 price range even over past few days. And volumes are huge...Is someone big accumulating in anticipation of some inside news? Looks possible to me...Also an Inverse HnS looks to be setting up even though its not very clear here...
So thats my first 2 picks...I will look at some more over next few days...As I said before, now might be a good time to pick some good scrips for longer term...Big money is made by buying and holding over longer periods of time...Not trading intraday. You can see how panacea went from 40 rs or so up to 360 odd now...Thats the power of long term. Judge for yourself from the charts.
First one Panacea Biotech...I have covered this stock once before over here...I think this looks good because even with the general weakness in the market over past few days, this looks relatively strong..Volume also picking up showing strong hands might be picking the stock. Fundamentally also I believe this is a good stock but I am hoping others can comment on this.
The other thing here is the falling channel-long term, that looks like it can be broken to the upside soon...This is a good stock to buy and hold for long term in the next correction...
Next one...IFCI...Now this stock is no stranger to anyone...Why it looks interesting to me even though its a highly speculative stock is because of how it has held up the 60 price range even over past few days. And volumes are huge...Is someone big accumulating in anticipation of some inside news? Looks possible to me...Also an Inverse HnS looks to be setting up even though its not very clear here...
So thats my first 2 picks...I will look at some more over next few days...As I said before, now might be a good time to pick some good scrips for longer term...Big money is made by buying and holding over longer periods of time...Not trading intraday. You can see how panacea went from 40 rs or so up to 360 odd now...Thats the power of long term. Judge for yourself from the charts.
Now one thing I need some help from readers of this post is do you know anything about the fundamentals or news about these 2 companies? If you do, please add this into the comments section of this post...I would appreciate it...
Best.
Market Update - June06 2008
Make it stoppppp....PLEEASEEE!!!! This would have been the reaction over the past few days for most traders and investors alike... :-)
Jokes aside...It was quite serious - this decline...And there was really no sign of relief...Yesterday market bounced back however I do not think we are out of the woods...I think a lot of traders seeing yesterdays action, might have gone long thinking its over...But I am not so sure...To tell the truth I am confused however I will give the benefit of the doubt to the bearish case until I see more convincing evidence.
Okay coming to the weekly chart first...I have added my comments in the chart. You can see how the stochastics is acting now...I would wait for it to first turn up before jumping in again
with my longer term investments.
Next the daily...Now the bounceback should continue for a few days I think...The lows of March and Jan are quite important...The 4440-4460 area. If this breaks, we should quickly crash to 4000 area. And maybe even more. But before jumping to any conclusions, I remain flat for next 1-2 weeks before making a decision on next steps.
Okay now that the charts are covered. I just wanted to say some stuff...For some time I have been trying different strategies in FNO and eventually come to the conclusion that it is not worth for me to continue in the same. Believe me, I have made money...good money in normal cash trading in stocks...Or stock picking...But FNO is a different story...Simply not worth for me..Time or effort...So I am returning back to stock picking for a slightly longer timeframe...Means 2-6 months timeframe...Maybe more depending on the market conditions.
I think the main problem that I have with FNO is more phsychological that anything else. Leverage just does not work for me...The main reason ppl get into FNO is to make a quick buck and often end up loosing their shirt in the process...For me since I was hedged most of the time, I did not get off too bad...But still overall I can safely say its not worth the time for me anyone...So moving back to stock picking...And I think we are getting close to a very good buy point....I would wait for 2 more weeks before making a decision...
Jokes aside...It was quite serious - this decline...And there was really no sign of relief...Yesterday market bounced back however I do not think we are out of the woods...I think a lot of traders seeing yesterdays action, might have gone long thinking its over...But I am not so sure...To tell the truth I am confused however I will give the benefit of the doubt to the bearish case until I see more convincing evidence.
Okay coming to the weekly chart first...I have added my comments in the chart. You can see how the stochastics is acting now...I would wait for it to first turn up before jumping in again
with my longer term investments.
Next the daily...Now the bounceback should continue for a few days I think...The lows of March and Jan are quite important...The 4440-4460 area. If this breaks, we should quickly crash to 4000 area. And maybe even more. But before jumping to any conclusions, I remain flat for next 1-2 weeks before making a decision on next steps.
Next the hourly chart. Again its clear...Supports are marked...Break this and we crash. Its simple. I am sure that a lot of traders have gone long or covered shorts in anticipation of this holding? But will it hold?...The Million dollar question!
If I were to guess, I would say bounceback and then come back to break the lows...We can surely expect a retest and how it reacts there will determine the market's trend for this year itself!
For a refresh, read this post again...I posted this some time back...Ultimate bottom can be much lower: http://theindianmarketblog.blogspot.com/2008/05/elliot-wave-counts-and-ideas.html
Okay now that the charts are covered. I just wanted to say some stuff...For some time I have been trying different strategies in FNO and eventually come to the conclusion that it is not worth for me to continue in the same. Believe me, I have made money...good money in normal cash trading in stocks...Or stock picking...But FNO is a different story...Simply not worth for me..Time or effort...So I am returning back to stock picking for a slightly longer timeframe...Means 2-6 months timeframe...Maybe more depending on the market conditions.
I think the main problem that I have with FNO is more phsychological that anything else. Leverage just does not work for me...The main reason ppl get into FNO is to make a quick buck and often end up loosing their shirt in the process...For me since I was hedged most of the time, I did not get off too bad...But still overall I can safely say its not worth the time for me anyone...So moving back to stock picking...And I think we are getting close to a very good buy point....I would wait for 2 more weeks before making a decision...
Fundamentally things are not good...If inflation is 8%(actual much more) and GDP is 8%, this means, real growth is negative...BUT still I think picking out some good stocks will really work out in the longer run.
As a start, I will post 2 interesting stocks in the next post.
Best.
Tuesday, June 3, 2008
Market Update - June4th 2008
Same chart that I posted yesterday now with updated data...You can see how we hit the exact support I had marked as important and bounced up from there...I tried a small long there and still holding...Looks like we will continue the bounce today for sometime but how long will it continue? Will it hold? Lets see...My thoughts would be that atleast a retest of the lows are coming very soon...Looking to close the longs sometime today maybe at 4760/4780 and wait and watch...I might try a short also today around there based on what I see....
Overall market is very far from strong..Right now the configuration has changed to short the bounces....Market needs to go above 4800 first to indicate some strength...Till then we have to give the benefit of the doubt to the bearish case. Today for the bulls, a positive close is very important. Yesterday we formed what could be a bullish hammer - But needs a good closing today to be valid...Else it was just weak shorts covering.
Have a good trading day.
Best.
Monday, June 2, 2008
Some stuff and lines
Just the intra chart of nifty with some lines and supports I think might be important in coming days...Not giving any recos here but can try maybe going long with tight stops at these line...Be cautious whichever way...This is a confusing market.
Best.
Ouch!
Stopped out at 4800 - The number that I was saying is very very important in short term...Well we just sliced thru it so easily that one wonders what is the point of supports?....Its scary to be long now...I think better to sit out for some time...When in doubt stay out - This is probably the best advice any trader ever got but still we always want to be in the market.
Looks like we are heading to 4600 first stop...Then who knows?
Best.
Looks like we are heading to 4600 first stop...Then who knows?
Best.
Sunday, June 1, 2008
Market Update - June01 2008
Not much of an update today...Still expecting a bounce..Configuration on charts remains the same...Not uploading charts today coz theres not much change from last week..We are at the lower end of the channel...Still expecting a bounce...One thing here I will say...Many ppl I know are expecting a bounce to 5000 area....Rarely does the market satisfy everyone...I see a couple of possibilities...
1. Market does not get to 5040 area at all...Instead stalls at around 4960-4980 area and goes back down.
2. Market goes above 5040 and screws all the bears...
Kinda favouring 1st scenario for now...We might even get to 5040 which was my initial target..lets see...
I am also preparing my shopping list for longer term stock picks...Will post thoughts about this later...My idea is to pick them on the next decline which should come soon...
Have a good trading day.
Best.
1. Market does not get to 5040 area at all...Instead stalls at around 4960-4980 area and goes back down.
2. Market goes above 5040 and screws all the bears...
Kinda favouring 1st scenario for now...We might even get to 5040 which was my initial target..lets see...
I am also preparing my shopping list for longer term stock picks...Will post thoughts about this later...My idea is to pick them on the next decline which should come soon...
Have a good trading day.
Best.
Thursday, May 29, 2008
ABC Correction
Lets take a look at the hourly charts over here....Its pretty much defined with the trendlines, a possible wedge setup...Or maybe just a channel which also says we have to bounce UP from here. IF this is a normal correction, we have completed A, B and C got over yesterday suggesting we bounce today to the upper level of the range which comes to around 5040 which was the target I was looking for when I took my longs....Still seems reasonable to expect this short term. Medium term 5050 is important - Needs to trade above to confirm correction is over.
Else we will see lower levels from somewhere down from the 5000/5040 area.
Trade safe. I will post updates to positions if any during the course of today.
Best.
Market Update - May29th 2008
Hello Friends,
I am back from vacation playing on all the slot machines in Las Vegas....Had a fun time...Was tough for me to even trade let alone post updates here...But will try to post more regularly from now on...Daily chart below.
I am back from vacation playing on all the slot machines in Las Vegas....Had a fun time...Was tough for me to even trade let alone post updates here...But will try to post more regularly from now on...Daily chart below.
Earlier I posted I was looking for a bounce...We got the bounce but it was a weak one that was quickly sold...What is worrying to me now is the huge figures FIIs are selling off nowadays...Not sure what is going on but situation looks quite dicey. I think we might be setting up for a big drop but this drop might not go below earlier lows of 4400 area. However we will see that when we get there...
Right now I am still long...I am looking to exit this on any bounce I get...I am not sure what yesterdays action was...It was quite scary to say the least....I am wondering if this was the usual expiry shenanigans or something more serious? No easy answer but next couple of trading sessions should tell us.
4800 is of utmost important. Break this, and a mini-crash is even possible.
Trade Safe. If you are not sure, stay out.
4920 on upside is strong resistance. Above this, 4950 area.
If we sustain above 5050 for sometime, I will say that correction is over as the falling channel would have broken to the upside....If not, lows await us.
I am looking to close longs soon and get flat...Or build some shorts...However I am not confident of this market so best thing might be to just stay out for some time.
I apologize if I sound bearish but situation is not clear at this point. I will wait for 2 more days before sounding more confident in either direction...I have indicators showing conflicting viewpoints..Better stay out when not sure.
Bottomline is that 4800 area should hold for the bullish case to remain alive - Short Term.
Best.
Tuesday, May 27, 2008
Quick Update - May 27th
Hello Friends,
Quick Update...Dont have time to post charts but I think we are setting up for a small bounce upward...Atleast a small bounce...We will reevaluate later....For now I think 5040-5100 area we will get sometime next week...Rolling over longs to June and adding some more to the very small position I had before..Please note market still very weak but ALSO very oversold...To expect a bounce is reasonable...But this is a risky play...I am hedged with puts.
4800 area should hold - Very Important!
CURRENT POSN: LONG NF 4831. (My avg price for June - I have a loss of around 40 pts for May..Just for the record)
Best.
Quick Update...Dont have time to post charts but I think we are setting up for a small bounce upward...Atleast a small bounce...We will reevaluate later....For now I think 5040-5100 area we will get sometime next week...Rolling over longs to June and adding some more to the very small position I had before..Please note market still very weak but ALSO very oversold...To expect a bounce is reasonable...But this is a risky play...I am hedged with puts.
4800 area should hold - Very Important!
CURRENT POSN: LONG NF 4831. (My avg price for June - I have a loss of around 40 pts for May..Just for the record)
Best.
Saturday, May 24, 2008
Market Outlook
Folks, I am on vacation this week...In Los Angeles some theme parks and after that Las Vegas...So posts might not be that much...My initial idea was to close everything before I left but still held some and well that was probably not a good thing...Oh well...Anyways heres my thoughts for this coming week.One thing to note here is that Monday is a hol over here in the US...This could be important.
Now see the chart..the decline came on low volumes...I find this quite interesting. Why did this happen?...Is it setting up for a short covering rally after the public is sufficiently beared up?
One very interesting thing I see now is that the 'experts' are all beared up and are expecting retest of Jan lows.
Now I am not an expert and I am not going to try and predict Mondays moves. If you are not in a trade, it might be a good idea to stay out on Monday. I have some small longs..And the plan is to hold this if 4900 holds...Break this and I will be out. See if it consistently trades below 4900 for 10 mins...
4920 and 4900 and important levels. I do not know more than this now...I will try to post updates when I can...If I were to guess, I'd said we do a small bounceback from here or a bit lower...And then maybe setup a long and painful decline. Overall situation is not good.
Best.
Friday, May 23, 2008
Stopped Out
Got stopped out 1/3 at 5020 and rest 1/3 at 5000. Trying a small long here also....4943.
Best.
Best.
Thursday, May 22, 2008
Update
Closing 1/3 of my position in profits...small profits...Just practicing good risk management.
Get out of longs if 5020 and 5000 breaks.
Best.
Get out of longs if 5020 and 5000 breaks.
Best.
Market Outlook - 23rd May 2008
Pretty decent day for me yesterday...If only I had got a better entry the day before, tomorrow would have been a great day for me...but well, you cant win em all....
Coming to today...See chart and comments on chart.
Coming to today...See chart and comments on chart.
Looking only at daily today. See how we stopped exactly at the t-line. Shows how important this is...What this means is that when this eventually breaks, it will be a sight to behold.
The reason I covered shorts and went long was only because of this t-line.
Today, well I am expecting a decent bounce...Maybe we get to 5100...max 5150...Before that we have to handle 5050 and 5080...Lets see how high we go...
Its always good to have a trading plan...My plan is to -
- Cover at either 5050 or 5080...Best case 5100. If I cover I will try some shorts..Will update.
- Hold till Monday and cover and go short then.
Let us see...Have a good trading day all.
Best.
Wednesday, May 21, 2008
Covering Shorts N Flipping Long in Small Amounts
Covering shorts and trying long here...Might be early but lookin for a bounce...Let us see..
Best.
Best.
Update - May 22nd 2008
No charts today..Just a quick update...looks like we go down to 5050 and if that fails 5000. I will look to cover shorts at one of these levels and go long..call me crazy but I will give it a try...I am expecting a bounce before more decline. The crazy public is buying all the dips so no problem...
:-D These guys are nuts.
A very sincere note here - dont fall with the fray..fundamentals are not bullish. I have said this before and will say this again - there is a time to bullish and there is a time to be bearish. I see that general complacency among the public is rising. This is a warning factor in itself.
Best.
:-D These guys are nuts.
A very sincere note here - dont fall with the fray..fundamentals are not bullish. I have said this before and will say this again - there is a time to bullish and there is a time to be bearish. I see that general complacency among the public is rising. This is a warning factor in itself.
Best.
Bad Timing
Well what can I say..Covered shorts at the best possible point...Support lvl of 5050 held like I thought it would and I waited for a rise to short into again...Waited for some time...lost patience...and shorted again...Bad level to short....I wish I was able to stay for whole trading days...because I have to go to sleep, this is killing me...Oh well...It is what it is...
Luckily I have the hedge.
What next? It is possible we saw a 'sucker' rally yesterday...The market makers are playing this game well...One thing to note here is FIIs sold 700 crore yesterday which is a big amount compared to their recent activity. I find it interesting that the market rose even when they sold this much...Be cautious if you are long....Atleast for some more time..
As I said before, it looks to me like the public is being trained to buy the dips.
5120 looks key here. Price action bullish above and bearish below. Above this 5150 is strong resistance.
5050 and 5000 are very strong supports. If we break this, we will get a waterfall decline.
Let us see.
Best.
Luckily I have the hedge.
What next? It is possible we saw a 'sucker' rally yesterday...The market makers are playing this game well...One thing to note here is FIIs sold 700 crore yesterday which is a big amount compared to their recent activity. I find it interesting that the market rose even when they sold this much...Be cautious if you are long....Atleast for some more time..
As I said before, it looks to me like the public is being trained to buy the dips.
5120 looks key here. Price action bullish above and bearish below. Above this 5150 is strong resistance.
5050 and 5000 are very strong supports. If we break this, we will get a waterfall decline.
Let us see.
Best.
Tuesday, May 20, 2008
Trying short again
Admit I didnt gain much from covering and reentering but better to be safe than sorry. Market is quite weak...Trying a short right here.
EDIT: Can cover if it goes above 5100. I am holding overnight. Good night!
Please note I am hedged with calls.
Best.
EDIT: Can cover if it goes above 5100. I am holding overnight. Good night!
Please note I am hedged with calls.
Best.
Covered Shorts
Quick update that I covered shorts at 5060...I am looking for opportunities either long or short here..
Best.
Best.
Market Outlook - May 21st 2008
Nifty intraday chart attached. I have added comments on the chart. Open in new window to read this. My view is that the public is trained to buy the dips. Beware against this tendency. There is a time to buy and there is a time to sell...Be careful if you are a shorter term player.
Position Update - As you know from earlier updates, I am short and will look to cover today and maybe short later at higher levels wherever we bounce back to.
Today important lvls to watch on downside is 5100 and 5070/5050. On upside again 5100, 5120 and 5140/5150 is important. I am looking to cover shorts at 5050 area or max 5000. 5000 is very strong support.
Best.
2000 Hits in 10 Days!
Well thats right..2000 Hits in just 10days...Nice for a start...Keep em coming...
And if you like this blog -
- Tell your friends about it
- Click on the ads on the right side
- And please vote in all the polls
Help me with the above, and I will keep the good stuff rollin in.
Best.
And if you like this blog -
- Tell your friends about it
- Click on the ads on the right side
- And please vote in all the polls
Help me with the above, and I will keep the good stuff rollin in.
Best.
Monday, May 19, 2008
Poll Final Results and Interpretation - Week of May19th
I am closing the first weekly poll. Got a total of 59 votes which is not bad even though not as much as I expected...Hope ppl continue to vote...Seriously 1 sec out of your time guys?...Comeon!
So the results...(please note for those who do not know sentiment polls act as a contrarian indicator most of the time)
47% was bullish
39% was bearish
14% was neutral
There is a significant decline in bearishness which I think is important. I am not going to try
and make too much out of this data because as I said...we really more weeks of data to get at a trend. However the decline in bearishness is interesting but still the difference between bullishness and bearishness is not big enough to cause a major decline unless something unforeseen happens.
To me it seems like this week my end flattish to a bit down at the end...
Maybe some initial weakness to week and then recovery? let us see.
Have a good trading day.
Best.
So the results...(please note for those who do not know sentiment polls act as a contrarian indicator most of the time)
47% was bullish
39% was bearish
14% was neutral
There is a significant decline in bearishness which I think is important. I am not going to try
and make too much out of this data because as I said...we really more weeks of data to get at a trend. However the decline in bearishness is interesting but still the difference between bullishness and bearishness is not big enough to cause a major decline unless something unforeseen happens.
To me it seems like this week my end flattish to a bit down at the end...
Maybe some initial weakness to week and then recovery? let us see.
Have a good trading day.
Best.
US Market Update - Another Crappola Day
Looked very strong in morning but reversed from the 200dma. Not very bullish. However lets watch tomorrow for confirmation/continuation. We are setting up a wedge on the charts...Will it breakdown soon? Lets see. Today was also a doji...Showing indecision among market participants.
Our market could behave similarly...I will be looking to short into strength today if we get it.
5180/5190 and 5220 to watch on upside and 5150 and 5100 to be watched on downside. 5100 if breaks will be strong confirmation of bearishness.
Best.
A Modern Day Parable
A Japanese company (TOYOTA) and an American company (FORD Motor) decided to have a canoe race on the Missouri River. Both teams practiced long and hard to reach their peak performance before the race. On the big day, the Japanese won by a mile.The Americans, very discouraged and depressed, decided to investigate the reason for the crushing defeat.
A management team made up of senior management was formed to investigate and recommend appropriate action. Their conclusion was the Japanese had 8 people rowing and 1 person steering, while the American team had 8 people steering and 1 person rowing.
Feeling a deeper study was in order, American management hired a consulting company and paid them a large amount of money for a second opinion. They advised, of course, that too many people were steering the boat, while not enough people were rowing. Not sure of how to utilize that information, but wanting to prevent another loss to the Japanese, the rowing team's management structure was totally reorganized to 4 steering supervisors, 3 area steering superintendents and 1 assistant superintendent steering manager. They also implemented a new performance system that would give the 1 person rowing the boat greater incentive to work harder. It was called the 'Rowing Team Quality First Program,' with meetings, dinners and free pens for the rower. There was discussion of getting new paddles, canoes and other equipment, extra vacation days for practices and bonuses. The next year the Japanese won by two miles.
Humiliated, the American management laid off the rower for poor performance, halted development of a new canoe, sold the paddles, and canceled all capital investments for new equipment. The money saved was distributed to the Senior Executives as bonuses and the next year's racing team was out-sourced to India.
Sadly, The End.
Here's something else to think about: FORD has spent the last thirty years moving all its factories out of the US, claiming they can't make money paying American wages.TOYOTA has spent the last thirty years building more than a dozen plants inside the US. The last quarter's results: TOYOTA made 4 billion in profits while Ford racked up 9 billion in losses. FORD folks are still scratching their heads.
:-D
Best.
A management team made up of senior management was formed to investigate and recommend appropriate action. Their conclusion was the Japanese had 8 people rowing and 1 person steering, while the American team had 8 people steering and 1 person rowing.
Feeling a deeper study was in order, American management hired a consulting company and paid them a large amount of money for a second opinion. They advised, of course, that too many people were steering the boat, while not enough people were rowing. Not sure of how to utilize that information, but wanting to prevent another loss to the Japanese, the rowing team's management structure was totally reorganized to 4 steering supervisors, 3 area steering superintendents and 1 assistant superintendent steering manager. They also implemented a new performance system that would give the 1 person rowing the boat greater incentive to work harder. It was called the 'Rowing Team Quality First Program,' with meetings, dinners and free pens for the rower. There was discussion of getting new paddles, canoes and other equipment, extra vacation days for practices and bonuses. The next year the Japanese won by two miles.
Humiliated, the American management laid off the rower for poor performance, halted development of a new canoe, sold the paddles, and canceled all capital investments for new equipment. The money saved was distributed to the Senior Executives as bonuses and the next year's racing team was out-sourced to India.
Sadly, The End.
Here's something else to think about: FORD has spent the last thirty years moving all its factories out of the US, claiming they can't make money paying American wages.TOYOTA has spent the last thirty years building more than a dozen plants inside the US. The last quarter's results: TOYOTA made 4 billion in profits while Ford racked up 9 billion in losses. FORD folks are still scratching their heads.
:-D
Best.
Sunday, May 18, 2008
Market Outlook for the Week of May19th
Last week was a fun week. I made money during the first half but second half was a poor performance for me I have to admit. The main problem I see I did was that I tried to fight the market because of my own bias and I paid because of that.
Right now I am still holding some shorts but its very minimal and hedged. I booked the rest of them as I was not comfortable with them and also I admit there is a good possibility of an upward run.
One thing I have to say. The uptrend from the very recent lows was quite weak till now. It remains to be seen whether it gets stronger over the next couple of days. This is my plan. I will wait to see how the next couple of days pan out. If it remains strong, I will close my shorts and flip bullish. The points I am watching on the upside is 5180/5190 first and then 5220.
Go above this and possibility of going above 5300 to 5500 becomes are very strong possibility.
But we will get to that later. Lets first examine the charts. I will start from the weekly, drill down to daily and finally hourly. I am trying here to be as neutral as possible even though my obvious bias is still bearish - probably due to the fact I am holding shorts.
Most of my comments are on the chart. This whole channel over here is what defines the market today. Watch it closely. There were some indications that it could be broken last week but it pulled back in to continue the bullish momentum. My thought was that a lot of the rally last week had to do with short covering than fresh buying. This should be a red flag for us. Short positions in the system if fairly large, help keep the market from going down too much. If they decrease AND speculators start moving toward the long side, it can be dangerous. But short term this chart is bullish as long as we are in this channel. As I said before next couple of days will be very important for me. Strength will mean I am wrong and I will close the shorts and probably flip long.
Right now I am still holding some shorts but its very minimal and hedged. I booked the rest of them as I was not comfortable with them and also I admit there is a good possibility of an upward run.
One thing I have to say. The uptrend from the very recent lows was quite weak till now. It remains to be seen whether it gets stronger over the next couple of days. This is my plan. I will wait to see how the next couple of days pan out. If it remains strong, I will close my shorts and flip bullish. The points I am watching on the upside is 5180/5190 first and then 5220.
Go above this and possibility of going above 5300 to 5500 becomes are very strong possibility.
But we will get to that later. Lets first examine the charts. I will start from the weekly, drill down to daily and finally hourly. I am trying here to be as neutral as possible even though my obvious bias is still bearish - probably due to the fact I am holding shorts.
Ok weekly chart attached above. I have added some comments on it. MACD crossover on a weekly is one of the most bullish signals we can get. But this is a very very lagging signal and to be used for longer term. We are not yet there and there is a good possibility for some pullback in price before the crossover. And more often than not, crossover will not be followed by immediate rallies. For now what this indicates is a die down of selling activity.
For me next 2 weeks are important for this weekly chart.
Next the daily. Again comments are added in the chart.
Stochastics have given a bullish crossover. This obviously supports the bullish case and kinda says holding shorts are dangerous. But gut feel tells me we might get some weakness next week. I will watch the next couple of days very closely before deciding to close or hold onto my shorts.
Next heres the hourly.
Most of my comments are on the chart. This whole channel over here is what defines the market today. Watch it closely. There were some indications that it could be broken last week but it pulled back in to continue the bullish momentum. My thought was that a lot of the rally last week had to do with short covering than fresh buying. This should be a red flag for us. Short positions in the system if fairly large, help keep the market from going down too much. If they decrease AND speculators start moving toward the long side, it can be dangerous. But short term this chart is bullish as long as we are in this channel. As I said before next couple of days will be very important for me. Strength will mean I am wrong and I will close the shorts and probably flip long.
Have a good trading week all. Please vote also in the poll on the right side.
Best.
Request to please vote in poll
Please do vote in the poll on the right hand side. All it will take you is a second. Humble request to take a second to do this. If you take a few minutes to read the content on this site, you can spare a second to vote. Please do. As I said before, unless we have a sufficiently large sample size, this data is meaningless and I want to collect and tabulate this data for a long period of time. I will also post weekly interpretations of this. Believe me, sentiment if we know how to use it is a wonderful and powerful tool - I am learning on this from one of the best here in the US.
Kindly vote.
Best.
PS: Hope you like the changes I made to format and color on my site - If you have any more suggestions like this, please leave them as comments or in the chatbox. Thanks!
Kindly vote.
Best.
PS: Hope you like the changes I made to format and color on my site - If you have any more suggestions like this, please leave them as comments or in the chatbox. Thanks!
Saturday, May 17, 2008
DayTrading - An Extreme Sport!
Okay this post I am putting up since one of my friends from a yahoogroup asked about the link I have in the right hand side called 'Basic Nifty Intraday Trading System' and how to use it.So I thought I will devote a post to this.
If you click on this link - It will take you to a yahoo intraday nifty chart which has parabolic SAR, slow stochastics and MACD histograms added to it. You can play around with this chart to add in more indicators and parameters.
Now see my title above :-) --> Daytrading is really an 'extreme' sport :D. It can be compared to maybe extreme sports such as bungee jumping..lol.
Before I start out let me just say this method of trading will offer a lot of excitement, exhilaration, fear, downright panic...In other words a cornucopia of emotion - Stay away if you cannot handle it. I know a lot of friends who do not make any money but they still stick to day trading - Why? - Simply because daytrading makes them feel like somethin! I tried it, made some, lost some and then just decided it is not worth it - It does not fit my personality - This is very important. A trader needs to keep searching for timeframe, indicators, method until he finds something that completely 'fits' his emotional makeup. I have found that daytrading is NOT for me. Positional works for we very well - Especially if I keep the leveraging to a minimum. But thats just me. Some people will do very well in daytrading so you can try it out a few times - Be sure to try with a contract or 2 only and check it out. Believe me very very few daytraders ever make money consistently. Very few NORMAL traders do that but daytrading kinda skews the picture even further.
Ok now to the chart. :-)
Now if you see above, I have marked the inflection points on the slow stochastics indicator which tells us when to buy and sell. A crossover of the blue above red tells us to buy and a reverse tells us to sell. This will work very good on trending days and you can get 2 or 3 good moves. The rest of them will tend to be whipsaws. The parabolic SAR(stop and reverse) is a indicator/method which tells you where to set your stop. You can tighter stops in most situations but that depends on the trader. Since the profit margins for a daytrader is very less - You need to make sure you use tight stops and be very nimble.
This chart is obviously not what a good day will look like...Infact you get much better trending days than this quite a lot of times but more than often you get a whipsaw day and this is really the bane for most day traders.
Try this paper trading for a while and see if it works out before launching into real trading.
Ask me questions if any in the comments section and I will try to address.
Best.
If you click on this link - It will take you to a yahoo intraday nifty chart which has parabolic SAR, slow stochastics and MACD histograms added to it. You can play around with this chart to add in more indicators and parameters.
Now see my title above :-) --> Daytrading is really an 'extreme' sport :D. It can be compared to maybe extreme sports such as bungee jumping..lol.
Before I start out let me just say this method of trading will offer a lot of excitement, exhilaration, fear, downright panic...In other words a cornucopia of emotion - Stay away if you cannot handle it. I know a lot of friends who do not make any money but they still stick to day trading - Why? - Simply because daytrading makes them feel like somethin! I tried it, made some, lost some and then just decided it is not worth it - It does not fit my personality - This is very important. A trader needs to keep searching for timeframe, indicators, method until he finds something that completely 'fits' his emotional makeup. I have found that daytrading is NOT for me. Positional works for we very well - Especially if I keep the leveraging to a minimum. But thats just me. Some people will do very well in daytrading so you can try it out a few times - Be sure to try with a contract or 2 only and check it out. Believe me very very few daytraders ever make money consistently. Very few NORMAL traders do that but daytrading kinda skews the picture even further.
Ok now to the chart. :-)
Now if you see above, I have marked the inflection points on the slow stochastics indicator which tells us when to buy and sell. A crossover of the blue above red tells us to buy and a reverse tells us to sell. This will work very good on trending days and you can get 2 or 3 good moves. The rest of them will tend to be whipsaws. The parabolic SAR(stop and reverse) is a indicator/method which tells you where to set your stop. You can tighter stops in most situations but that depends on the trader. Since the profit margins for a daytrader is very less - You need to make sure you use tight stops and be very nimble.
This chart is obviously not what a good day will look like...Infact you get much better trending days than this quite a lot of times but more than often you get a whipsaw day and this is really the bane for most day traders.
Try this paper trading for a while and see if it works out before launching into real trading.
Ask me questions if any in the comments section and I will try to address.
Best.
Poll Interpretation
For the last 10 days or so I had a poll posted up here trying to get sentiment for the month of May...Thanks to all who voted. I expected much higher participation since the daily traffic to this site is on average 150 unique people. Please do vote in future polls - This can create a significant tool for us - And I will put up interpretations on this and as we go forward we will be able to utilize this data more in determining market sentiment and direction.
Now coming to the poll I had put up for the month of May.
38% was bullish
58% was bearish
3% was neutral
I guess the sample size is way too small to make any such conclusions on this.
But I think above shows that majority is bearish as that is why the market is not going down too much...In other words, it looks like market is very light in terms of speculative positions and this kinda makes it less prone to sudden crashes or declines...Now one thing to not here is that as time was going by, the bullishness kept increasing and this was the major drawback of the poll. I need to close the poll much quicker and maybe reduce the time period.
This has got significant value in trying to get a handle on market sentiment and when used with context it becomes an invaluable tool. For example, after the big decline in Jan, if we had checked sentiment I would not be surprised to see 90% bearish. And this will be very bullish. Over time we can get a better handle on this.
So please vote. From this week on I will open weekly polls - Each Friday market close it will open, On Monday before market opens I will close it and post interpretation on the same.
And we can compare with market moves and see how it works. This thing will take time but I think it can be a good tool.
Please vote...
Best.
Now coming to the poll I had put up for the month of May.
38% was bullish
58% was bearish
3% was neutral
I guess the sample size is way too small to make any such conclusions on this.
But I think above shows that majority is bearish as that is why the market is not going down too much...In other words, it looks like market is very light in terms of speculative positions and this kinda makes it less prone to sudden crashes or declines...Now one thing to not here is that as time was going by, the bullishness kept increasing and this was the major drawback of the poll. I need to close the poll much quicker and maybe reduce the time period.
This has got significant value in trying to get a handle on market sentiment and when used with context it becomes an invaluable tool. For example, after the big decline in Jan, if we had checked sentiment I would not be surprised to see 90% bearish. And this will be very bullish. Over time we can get a better handle on this.
So please vote. From this week on I will open weekly polls - Each Friday market close it will open, On Monday before market opens I will close it and post interpretation on the same.
And we can compare with market moves and see how it works. This thing will take time but I think it can be a good tool.
Please vote...
Best.
Friday, May 16, 2008
Week Recap - May 16th 2008
I am sorry I could not post yesterday as was very busy trading for most of the time and then was very tired so called it a night...I did some trading around on my positions..i.e closed shorts at the open lows, held the hedge calls until 5150 or so, closed this also and went short again in small amounts only. Debated with myself on whether it is a wise thing to hold the shorts into the long weekend then decided I will. I took around 50 points(considering the hedge) net loss on my shorts that I closed....Traded around it to reduce it to this levels but still overall a good week for me considering the good profits I made in earlier part of the week and also last week.
The uptrend SO FAR has been weak and choppy which is why I am thinking this is more corrective than impulse which means atleast a revisit back to the lows is possible. Make no mistake, if we go and sustain above 5180/5200, it will be the first red flag for me and above
5220/5250 I will no longer try short and I will even give the bullish case a chance...Somehow I am not feeling confident enough to become a bull yet.
Something I wanted to say here is, please do not get carried away by what I post sometimes...Always do your own due diligence when taking positions and above all, please do not take on large positions you cannot manage. Trading successfully is not an overnight get rich scheme...we need to work hard...there will be bad trades, there will be good trades...Taking small positions ensure we dont pay for the bad decisions we make. So please whenever I post a position, I hope you all will think and make up your own decision when taking the trade.
Because of above I feel a bit guilty nowadays posting trades here...I mean if it goes good everyone is happy but nowadays this blog has got 150-200 visitors in a day....So to all be judicious and take your own decisions. It is very easy to get swayed by other's thoughts...I dont know how many times this has happened to me and I miss out on perfectly good trades. Read the charts and trade...The market is supreme. No one else is. Period.
I will post hourly, daily, weekly charts later on with my comments.
Have a good weekend all....
Best.
The uptrend SO FAR has been weak and choppy which is why I am thinking this is more corrective than impulse which means atleast a revisit back to the lows is possible. Make no mistake, if we go and sustain above 5180/5200, it will be the first red flag for me and above
5220/5250 I will no longer try short and I will even give the bullish case a chance...Somehow I am not feeling confident enough to become a bull yet.
Something I wanted to say here is, please do not get carried away by what I post sometimes...Always do your own due diligence when taking positions and above all, please do not take on large positions you cannot manage. Trading successfully is not an overnight get rich scheme...we need to work hard...there will be bad trades, there will be good trades...Taking small positions ensure we dont pay for the bad decisions we make. So please whenever I post a position, I hope you all will think and make up your own decision when taking the trade.
Because of above I feel a bit guilty nowadays posting trades here...I mean if it goes good everyone is happy but nowadays this blog has got 150-200 visitors in a day....So to all be judicious and take your own decisions. It is very easy to get swayed by other's thoughts...I dont know how many times this has happened to me and I miss out on perfectly good trades. Read the charts and trade...The market is supreme. No one else is. Period.
I will post hourly, daily, weekly charts later on with my comments.
Have a good weekend all....
Best.
Thursday, May 15, 2008
Market Update - May 15th 2008
Not posting a chart today...Nothing much to say on charts.
To me this looks like a short squeeze from hell. Not going to stand in its way anymore...Will close shorts, take the loss like a man and will post this sometime today(I will micromange this little bit with the hedges so that the loss is kept as low as possible) . One thing to note here is that tomorrow is US OPEX(option expiry) week which typically means that the market is held up by the big guys during this time...So be cautious of longs.
Today we get a gap up and then need to see if it sustains...Also we are going into the long weekend. It will be interesting to see who will blink first - Bull or Bears.
I will get out and watch before making any decision. Most probably will go flat into the long weekend. We will see next week. I did not have such a bad week even with this trade I am on now...But this is only because of the hedges I have in place - This is why I encouraged doing this so much.
Have a good trading day.
Best.
To me this looks like a short squeeze from hell. Not going to stand in its way anymore...Will close shorts, take the loss like a man and will post this sometime today(I will micromange this little bit with the hedges so that the loss is kept as low as possible) . One thing to note here is that tomorrow is US OPEX(option expiry) week which typically means that the market is held up by the big guys during this time...So be cautious of longs.
Today we get a gap up and then need to see if it sustains...Also we are going into the long weekend. It will be interesting to see who will blink first - Bull or Bears.
I will get out and watch before making any decision. Most probably will go flat into the long weekend. We will see next week. I did not have such a bad week even with this trade I am on now...But this is only because of the hedges I have in place - This is why I encouraged doing this so much.
Have a good trading day.
Best.
Wednesday, May 14, 2008
5060 Important support to watch
Close longs(if you are long) and go short if we break it...I am still holding shorts..Total avg price is 5045...Not feeling very good about it...But decided to hold for a day.
Best.
Best.
Adding More
Adding more shorts at this level...NF 5052....I donno if I am wrong and am fighting the mkt at this point now...Pls comment if you think I am wrong....
50% short now.
Best.
50% short now.
Best.
Market Update - May 15th 2008
Chart attached above. I dont have much to report on the chart except that uptrend still looks like it is protected by the uptrend line. But to me it looks like this will fail soon...Only question is when?....On the upside, watchout for price rejection and selloff - 5050, 5150, 5180 are important numbers to watch out for in coming days if it even gets that far. On the downside 4920 is the most important support. 4960 and 5000 area is also important as supports.
Position Update - As you know I shorted in small amounts yesterday...Down by about 30 points but since I have the hedge and the position is quite small, I am okay with this.
Today, I will probably look to add to shorts so I am at 50% position.
Best.
How Important is TA in Your Trading or Investment Methodology?
Wanted to post a discussion on this for quite some time but never got around to it.
Ask yourself above question..And note down the answer. Then read below.
Technical Analysis, Chart reading, Chart skills etc account for JUST 30% of our trading success. This might come as a shock to most people reading this but that is all. Even if you know very basic TA, you can still work your way around in the market.
Now what are the 2 other parts that are most important in your trading technique?
- Money management and/or Position sizing
- Pshycological wellbeing within yourself and with the market
Many a time we spot a perfect setup in the chart and we know if we take it, we will succeed in making a truckload of money...But after the trade is over, we realize we made a lot of big mistakes and the setup that just could not go wrong went wrong big time and you lost a truck load of money instead of making it.
Why?
To quote Dr Alexander Elder(read the book 'Come into my Trading Room' - Will be useful for both novices and veterans alike) - Successful Trading consists of the 3 'M's -
Mind
Money
Method
Mind - This is psychological wellbeing. If you have fear, hope or greed clouding your judgement, you need to get out or just dont take the trade. In other words we need to be as mechanical as possible when doing trades. Keep emotion totally out of the markets. They just do not go together. Sometimes we become very emotional due to the amount of money we have hanging in there and in cases like this, do not put so much money in. I know of many ppl who are successful when trading very small amounts or are excellent paper traders but it comes to actual money, they fail miserably...This kind of ties in with the next M.
Money - This is the art of money management and position sizing. i.e for your amount of capital, you should know how much you should leverage or risk. There is no real or easy answer to this. You need to know what is your risk level. And what is the reward potential. You should know your risk-reward ratio in order to know whether the trade is favourable.
Also always be ready to cut your losses and run. Be always ready to admit you are wrong.
A retail investor having a capital of 2 lakhs, engages in trading 1000 option contracts or 500 Future contracts is asking for sure blowup of the trading account.
Now all of above will seem very boring to most but money and risk management techniques are the most important thing you can ever learn in relation to trading. The rest will follow.
Method - The 3rd M. This is technical analysis and charting. This is what most sites, tutorials, gurus etc focus on and they rarely give importance to above. Why? Simply because they know that this is interesting...People begin to calculate what their potential profits are on seeing a setup...But they rarely ever calculate potential loss...This is the weighing of risk and reward and determining if a trade is likely to succeed.
Please note - I am not saying the art of TA is not importance..It is very..But it is only a third of the overall picture. So read up on money management and work on improving your emotional setup and wellbeing...Believe me it will be time well spent.
Best.
Ask yourself above question..And note down the answer. Then read below.
Technical Analysis, Chart reading, Chart skills etc account for JUST 30% of our trading success. This might come as a shock to most people reading this but that is all. Even if you know very basic TA, you can still work your way around in the market.
Now what are the 2 other parts that are most important in your trading technique?
- Money management and/or Position sizing
- Pshycological wellbeing within yourself and with the market
Many a time we spot a perfect setup in the chart and we know if we take it, we will succeed in making a truckload of money...But after the trade is over, we realize we made a lot of big mistakes and the setup that just could not go wrong went wrong big time and you lost a truck load of money instead of making it.
Why?
To quote Dr Alexander Elder(read the book 'Come into my Trading Room' - Will be useful for both novices and veterans alike) - Successful Trading consists of the 3 'M's -
Mind
Money
Method
Mind - This is psychological wellbeing. If you have fear, hope or greed clouding your judgement, you need to get out or just dont take the trade. In other words we need to be as mechanical as possible when doing trades. Keep emotion totally out of the markets. They just do not go together. Sometimes we become very emotional due to the amount of money we have hanging in there and in cases like this, do not put so much money in. I know of many ppl who are successful when trading very small amounts or are excellent paper traders but it comes to actual money, they fail miserably...This kind of ties in with the next M.
Money - This is the art of money management and position sizing. i.e for your amount of capital, you should know how much you should leverage or risk. There is no real or easy answer to this. You need to know what is your risk level. And what is the reward potential. You should know your risk-reward ratio in order to know whether the trade is favourable.
Also always be ready to cut your losses and run. Be always ready to admit you are wrong.
A retail investor having a capital of 2 lakhs, engages in trading 1000 option contracts or 500 Future contracts is asking for sure blowup of the trading account.
Now all of above will seem very boring to most but money and risk management techniques are the most important thing you can ever learn in relation to trading. The rest will follow.
Method - The 3rd M. This is technical analysis and charting. This is what most sites, tutorials, gurus etc focus on and they rarely give importance to above. Why? Simply because they know that this is interesting...People begin to calculate what their potential profits are on seeing a setup...But they rarely ever calculate potential loss...This is the weighing of risk and reward and determining if a trade is likely to succeed.
Please note - I am not saying the art of TA is not importance..It is very..But it is only a third of the overall picture. So read up on money management and work on improving your emotional setup and wellbeing...Believe me it will be time well spent.
Best.
US Market Crappola!
:-D
What a day today for US markets...Almost a perfect bull trap....Gap Up...Hold the gap till the last 45 mins and then sell off...Beautiful!
Now seriously speaking this is a bearish pattern that has formed today...There is also a wedge looming out there....Will it mark a significant top or is it just normal profit booking? I do not know for sure...But all the signs are there for a significant pullback to happen...
See chart above...I have indicated 2 important things here....First the obvious double top potential and the resistance line. The next one is volume - see how the volume came back today after a couple of low volume days - And see how quickly the downmove came...Its treacherous out there.
Overall today painted a bearish picture...We need to see if we get continuation.
Lets wait and watch..Will put up my Indian Market updates and some other articles soon.
Best.
May 14th Trading Day - A Review
Okay I admit yesterday was not a very good day for me...I said in earlier posts that generally after having a long string of winning trades, I have a loser like this one...This is why I trade hedged - It reduces profit potential but keeps me afloat.
Coming to yesterday again, it was a tough day to trade...and ICICI made things worse. I know I know bad worker blames the tools but I cannot help but say, if I managed to cover my shorts and flip long as I was meaning to do...at the lows of the day, what a difference it would have been....Trading is a intense pshycological game...And discipline and a straight mind is required...Whenever you find hope, fear or greed crowding your judgement, you should just close out the trade.
ICICI being down in the morning and me missing out on a potential 50+40 NF points both ways made me upset and as a result I could not trade properly...Anyway whats done is done...I am shifting over to Indiabulls from now....ICICI just lost an actively trading customer. Cheers.
Coming to my position now....Yes we went higher...I am not too worried about this since as I said its a very very small positions and before taking it also I knew it was a high risk one since a short squeeze was expected....However I think we might be setting up for a good short point at higher levels a little later....
There are a few things I need to analyse on the charts and also want to watch US market action today before making any decision on my position.
The way I see it, I might do one of the following - Either add to the shorts at higher levels or cover and run...At this point, I dont have a big desire to go long...I think I will wait for some more time before taking positional longs...
Best.
Coming to yesterday again, it was a tough day to trade...and ICICI made things worse. I know I know bad worker blames the tools but I cannot help but say, if I managed to cover my shorts and flip long as I was meaning to do...at the lows of the day, what a difference it would have been....Trading is a intense pshycological game...And discipline and a straight mind is required...Whenever you find hope, fear or greed crowding your judgement, you should just close out the trade.
ICICI being down in the morning and me missing out on a potential 50+40 NF points both ways made me upset and as a result I could not trade properly...Anyway whats done is done...I am shifting over to Indiabulls from now....ICICI just lost an actively trading customer. Cheers.
Coming to my position now....Yes we went higher...I am not too worried about this since as I said its a very very small positions and before taking it also I knew it was a high risk one since a short squeeze was expected....However I think we might be setting up for a good short point at higher levels a little later....
There are a few things I need to analyse on the charts and also want to watch US market action today before making any decision on my position.
The way I see it, I might do one of the following - Either add to the shorts at higher levels or cover and run...At this point, I dont have a big desire to go long...I think I will wait for some more time before taking positional longs...
Best.
Tuesday, May 13, 2008
Short Again - Very very small amount
Short probe again...NF 4985. Hedged with 5000 calls. Will add later.
Going to sleep guys...Mostly probably no more updates today.
Please note that this is a high risk trade - take it at your own risk.
EDIT: Adding some more here...30% short now
Best.
Going to sleep guys...Mostly probably no more updates today.
Please note that this is a high risk trade - take it at your own risk.
EDIT: Adding some more here...30% short now
Best.
Finally out
Finally managed to cover...Stupid ICICI...I cant stop venting about them....Missed out on a good 30-40 NF points here....But this is the last trade with them.
I wanted to go long at the lows but now will wait and watch...Might not do anything else today.
Best.
I wanted to go long at the lows but now will wait and watch...Might not do anything else today.
Best.
Man oh Man!!!
Damn ICICI to hell...I want to cover my shorts and this thing is down...Thats it...today is the last day for me on this stinking thing....Shifting totally to Indiabulls...
Cover shorts if you can for now.
Best.
Cover shorts if you can for now.
Best.
Market Update - Wednesday May 14th 2008
After several good trading days, I tend to get a bit wary of the next few trades I take...So I will be very cautious for some time. The past few days have been a blast for me and should have been for whoever was following my trades.
What next? Again not sure...So will play it as it comes...I am thinking that today could see some initial weakness, then some strength(may be small strength only) and finally some weakness again....This is basically based on my feel of the market and then guesswork so take it with a pinch of salt...So regd my positions, likely I will close then on the morning weakness and then short higher...I might not go long at all unless the daily stochastics turn up in a few days...However I will wait for today's market action before making any decisions on next steps.
Watch this blog as I will be providing real time positional updates.
Coming to the hourly, comments on the chart..Whats funny here is that it looks like its broken the channel already...But I would watch for bouncebacks from earlier lows...4920 area i.e
This will probably be my target to cover shorts.
Now daily...See my comments on chart. The uptrend line is still in play. We CANNOT completely rule out the bullish case unless we breakdown from this - When this happens, it will sure be a sight to behold...But I will probably wait for some more time to short in size again ...As I said before I will cover my shorts today sometime in good profits ;)
What next? Again not sure...So will play it as it comes...I am thinking that today could see some initial weakness, then some strength(may be small strength only) and finally some weakness again....This is basically based on my feel of the market and then guesswork so take it with a pinch of salt...So regd my positions, likely I will close then on the morning weakness and then short higher...I might not go long at all unless the daily stochastics turn up in a few days...However I will wait for today's market action before making any decisions on next steps.
Watch this blog as I will be providing real time positional updates.
Coming to the hourly, comments on the chart..Whats funny here is that it looks like its broken the channel already...But I would watch for bouncebacks from earlier lows...4920 area i.e
This will probably be my target to cover shorts.
Now daily...See my comments on chart. The uptrend line is still in play. We CANNOT completely rule out the bullish case unless we breakdown from this - When this happens, it will sure be a sight to behold...But I will probably wait for some more time to short in size again ...As I said before I will cover my shorts today sometime in good profits ;)
Best.
Bingo!
Right on target with my trading and comments yesterday that even I was surprised ;)
I said we could have strength beginning of day and weakness later on...Which is why I built shorts into the strength as we moved along....The breakdown we got from there was only a matter of time....
Since I started this blog, I have given 4 or 5 calls/trades and all of them except for one 20 pt loss were good winners...Overall net of 300-400 NF points - And this is a conservative estimate.
Folks, it just does not get any better than this!
Next what happens could be very interesting...It could be make or break for the markets now so I am in 2 minds whether to close my shorts and try shorting again higher or keep holding...I will post comments later with charts after I get a chance to do some more analysis.
If you like this site and my analysis, please show your appreciation by -
1. Telling your friends about it.
2. Clicking on the links on the right hand side(sadly no one is clicking) :-)
I want to keep this site rolling for as long as I can....And by doing above you will help me keep this at this quality and standard and better than that....Totally free...
Best.
I said we could have strength beginning of day and weakness later on...Which is why I built shorts into the strength as we moved along....The breakdown we got from there was only a matter of time....
Since I started this blog, I have given 4 or 5 calls/trades and all of them except for one 20 pt loss were good winners...Overall net of 300-400 NF points - And this is a conservative estimate.
Folks, it just does not get any better than this!
Next what happens could be very interesting...It could be make or break for the markets now so I am in 2 minds whether to close my shorts and try shorting again higher or keep holding...I will post comments later with charts after I get a chance to do some more analysis.
If you like this site and my analysis, please show your appreciation by -
1. Telling your friends about it.
2. Clicking on the links on the right hand side(sadly no one is clicking) :-)
I want to keep this site rolling for as long as I can....And by doing above you will help me keep this at this quality and standard and better than that....Totally free...
Best.
Monday, May 12, 2008
India VIX and how to read it....Plus some charts
Quoting NSE:
Volatility Index is a measure of market’s expectation of volatility over the near term. Volatility is often described as the “rate and magnitude of changes in prices” and in finance often referred to as risk. Volatility Index is a measure, of the amount by which an underlying Index is expected to fluctuate, in the near term, (calculated as annualised volatility, denoted in percentage e.g. 20%) based on the order book of the underlying index options."
India VIX is a volatility index based on the Nifty 50 Index Option prices. From the best bid-ask prices of Nifty 50 Options contracts, a volatility figure (%) is calculated which indicates the expected market volatility over the next 30 calendar days.
Now the very important thing to note here is that the VIX is a contrarian indicator. Higher readings show the fear factor while lower values indicate complacency esp among the public. There is really no upper or lower limit so this is often used as a contrarian sentiment indicator.
Why is this indicator considered contrarian?...Simply because of the fact that retail influences the value the most....After all Fear and Greed are what drives the stock market.
A picture is worth a 1000 words...See chart below for the US market VIX and how it marks important tops and bottoms. For us, we need obviously need more data to reach more accurate conclusions of what is HIGH and what is LOW for the VIX.
Now look at a similar chart of our market...Now I apologize for the quality over here...I did not have much to work with and this mostly a makeshift chart I created after a lot of effort....VIX is below and NIFTY is on top....You can see how high values on VIX mark the bottoms on NIFTY. To me it looks like 20s is a complacent value for the VIX and anything from mid 30s to upper 40s indicate fear and above 50 indicates panic....Btw, VIX was in 30s yesterday showing some fear...Unfortunately I do not have all the data below but I think it shows you how this works....Watch the VIX....It is an important weapon to add to our arsenal.
Best.
Volatility Index is a measure of market’s expectation of volatility over the near term. Volatility is often described as the “rate and magnitude of changes in prices” and in finance often referred to as risk. Volatility Index is a measure, of the amount by which an underlying Index is expected to fluctuate, in the near term, (calculated as annualised volatility, denoted in percentage e.g. 20%) based on the order book of the underlying index options."
India VIX is a volatility index based on the Nifty 50 Index Option prices. From the best bid-ask prices of Nifty 50 Options contracts, a volatility figure (%) is calculated which indicates the expected market volatility over the next 30 calendar days.
Now the very important thing to note here is that the VIX is a contrarian indicator. Higher readings show the fear factor while lower values indicate complacency esp among the public. There is really no upper or lower limit so this is often used as a contrarian sentiment indicator.
Why is this indicator considered contrarian?...Simply because of the fact that retail influences the value the most....After all Fear and Greed are what drives the stock market.
A picture is worth a 1000 words...See chart below for the US market VIX and how it marks important tops and bottoms. For us, we need obviously need more data to reach more accurate conclusions of what is HIGH and what is LOW for the VIX.
Now look at a similar chart of our market...Now I apologize for the quality over here...I did not have much to work with and this mostly a makeshift chart I created after a lot of effort....VIX is below and NIFTY is on top....You can see how high values on VIX mark the bottoms on NIFTY. To me it looks like 20s is a complacent value for the VIX and anything from mid 30s to upper 40s indicate fear and above 50 indicates panic....Btw, VIX was in 30s yesterday showing some fear...Unfortunately I do not have all the data below but I think it shows you how this works....Watch the VIX....It is an important weapon to add to our arsenal.
Best.
Adding some more shorts
Right here...Market looks dicey...No clear direction YET....Though bias looks for UP now....Adding shorts...Still not short in full size...Now around 50% short...I repeat that this is a high risk trade so do not take it if not comfortable..5050 and 5100 look like important levels both upside and downside.
Best.
Best.
Position Update
Covered Longs....Into small shorts....NF 5043...I may be early...Which is why I am moving in very short amounts only.
Best.
Best.
Market Update - Tuesday May 12 2008
Wow what a day...It doesnt get more violent or exciting than this...However days like yesterday are the ones that have the capacity to wipe you out...Unless you practice real trading discipline. I for one did not even know that there were important numbers coming out - This is the importance of technical analysis and sticking to your trading plan. After I saw the big drop, I checked the news to see the shock news....Needless to say I was scared....As I said in earlier post I turned out to be quite early....If I had been a little bit more patient, I would have gained an extra 80 NF points or so - Both my short and long....I guess this is a problem a lot of traders have - Being trigger happy and overtrading a lot of times....Well...I guess for me it turned out okay yesterday...Cant win em all!
Coming to today....First the US market - Todays big gain came on very low volume....I dont like it one bit...It is distribution? I think it might be....Looks like they are pushing it up on very light volume...I have said this before - This is very very dangerous because when the volume finally comes in, we can accelarate to the downside....
When reading charts, 2 things are the most important - Price and Volume. Everything else are just derivatives of these!...Its surprising how many traders ignore this and try to find the holy grail of indicators which believe me just does not exist!
Okay now coming to our market today. I expect today we will get a flattish kind of day...Maybe some early strength and weakness later on...I am not very comfortable with the longs I took yesterday...So I will try to exit them at decent profits and then build shorts.....Again I stress, I will start in very very small amounts and then build on that...Ofcourse I will be hedged with options in the opposite direction.
Chart for today and comments added.
Coming to today....First the US market - Todays big gain came on very low volume....I dont like it one bit...It is distribution? I think it might be....Looks like they are pushing it up on very light volume...I have said this before - This is very very dangerous because when the volume finally comes in, we can accelarate to the downside....
When reading charts, 2 things are the most important - Price and Volume. Everything else are just derivatives of these!...Its surprising how many traders ignore this and try to find the holy grail of indicators which believe me just does not exist!
Okay now coming to our market today. I expect today we will get a flattish kind of day...Maybe some early strength and weakness later on...I am not very comfortable with the longs I took yesterday...So I will try to exit them at decent profits and then build shorts.....Again I stress, I will start in very very small amounts and then build on that...Ofcourse I will be hedged with options in the opposite direction.
Chart for today and comments added.
If you see above chart, where yesterdays decline stopped was almost picture perfect...We need to have a trading plan and stick to it...Keep emotions out...I simply cannot stress the importance of this...As I said before looking to exit longs today and build shorts slowly over the next couple of days....For today 5000/4980 on lower side and 5100/5150 on upside is very important.
Have a good trading day.
Best.
PS: If you have any comments or suggestions on this site or on how I can make this better, please mail me at princely.k.mathew@gmail.com
I saw all the good comments and thank you for that...Please understand if I do not take time to respond to each and every one of them but I am reading them and I appreciate the same....
If you like this site, please show your appreciation by -
1. Telling your friends about it.
2. Clicking on the links on the right hand side. :-)
Best.
Sunday, May 11, 2008
Position Update - Monday May 12th 2008
Out of shorts as per plan and into small longs...NF 4970...Hedged with Puts. Lets see what happens. If we break 4900 on NF, I will cover and run ;)
Edit: Looks like I was early...I need to be more patient...However still thinking we get a bounce...But market is weak...Have stops.
Best.
Edit: Looks like I was early...I need to be more patient...However still thinking we get a bounce...But market is weak...Have stops.
Best.
Nifty Short Term Update - On the Brink - May 12th 2008
Well folks, we are very close to the 4950 area which I forecasted we would reach sometime back...Chart updated and attached with some comments...The channel needs to hold for the bullish case to remain alive. It is very probable that we will have a short term snapback higher sometime during the day.
4950-4930 area is key today. The bulls will try to hold this at any cost.
Postional Update - Shorts which I took on Friday highs - I will probably cover these sometime today and go long in very very small amounts. I will try to post this in real time when I do so.
Make no mistake, markets are still weak but a bounceback can happen - Infact looks very likely unless some very bad news comes out.
Have a good trading day.
Best.
Elliot Wave Counts and Ideas
I thought I will spend some time in this post to outline where I think we are in terms of elliot wave in the longer term picture...The counts are far from clear but there are some things that we know for sure and this should be able to shed some light on future moves and what we can expect to come...
As I explained in an earlier post, Elliot wave says that there are 2 types of waves...The impulse or the bullish wave which consists of 5 waves - 3 UP and 2 DOWN - and the corrective wave or the bearish wave which consists of 3 waves - 2 DOWN and 1 UP. And these waves will keep reiterating in any timeframe.
Now let us look at the longer term EW picture.
If you see above chart(click on it to make it bigger or right click and open in new window), the mega bullish wave started sometime in late 2001 from 800 levels....In between we had corrective waves of 2 and 4 and the whole impulsive structure looks to have terminated last January at around 6350 levels. Fibo retracements tell us where we can expect the current ongoing correction to end....Above is a log chart and you can see that what we have seen so far is nothing and possibility for much more downfall is there....50% retracements stands at 3660 area and 38.2% retracement stands at 4330 area. Very unlikely case of 61.8% retracement stands at 3000 area.
One thing is for sure...We are correcting the multi-year bull advance from 2001. So it is not realistic to expect that the corrective will end so fast and we will enter a new bull wave....It is very likely that the Big C downwave is yet to come.
However I will look at the bullish possibility first before moving on to the more likely bearish possibility. Either way it looks to me like now is not the time for long term investing and better to ONLY trade for now....
First lets look at the shorter term bullish possibility...
Here I have marked that the ABC correction is over and that a new bullish wave has started. For this to remain valid, 4950(+or - few) CANNOT be taken out to the downside and the new wave should start upward. If it is taken out, it means that this is just a corrective wave and we will see C down coming in the near future.
And that brings us to our big bearish possibility...I am kind of favouring this for now...
As I explained in an earlier post, Elliot wave says that there are 2 types of waves...The impulse or the bullish wave which consists of 5 waves - 3 UP and 2 DOWN - and the corrective wave or the bearish wave which consists of 3 waves - 2 DOWN and 1 UP. And these waves will keep reiterating in any timeframe.
Now let us look at the longer term EW picture.
If you see above chart(click on it to make it bigger or right click and open in new window), the mega bullish wave started sometime in late 2001 from 800 levels....In between we had corrective waves of 2 and 4 and the whole impulsive structure looks to have terminated last January at around 6350 levels. Fibo retracements tell us where we can expect the current ongoing correction to end....Above is a log chart and you can see that what we have seen so far is nothing and possibility for much more downfall is there....50% retracements stands at 3660 area and 38.2% retracement stands at 4330 area. Very unlikely case of 61.8% retracement stands at 3000 area.
One thing is for sure...We are correcting the multi-year bull advance from 2001. So it is not realistic to expect that the corrective will end so fast and we will enter a new bull wave....It is very likely that the Big C downwave is yet to come.
However I will look at the bullish possibility first before moving on to the more likely bearish possibility. Either way it looks to me like now is not the time for long term investing and better to ONLY trade for now....
First lets look at the shorter term bullish possibility...
Here I have marked that the ABC correction is over and that a new bullish wave has started. For this to remain valid, 4950(+or - few) CANNOT be taken out to the downside and the new wave should start upward. If it is taken out, it means that this is just a corrective wave and we will see C down coming in the near future.And that brings us to our big bearish possibility...I am kind of favouring this for now...
The chart and moves are self explanatory.
Okay now let me say one thing - All above charts and expectations are very speculative only and I dont think we can trade based on these...I just wanted to present the bigger picture and what I see happening...For trading, let us just follow day to day moves and possibilities....
So again I stress, above is all quite speculative and is mainly for entertainment purposes...For trading, I do not use elliot wave EXCEPT to have a very high level guideline...For trading, channels, MACD, Moving averages, Stochastics and so on should be used....Elliot wave when used in conjunction with these tools become much more powerful.
Please leave comments.
Best.
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