BEAR ATTACK !!!

On Thursday (15/12 ) in KOLHAPURINIFTY group on facebook we have mentioned that  ------
" Today there is breakdown from head and shoulder pattern on hourly chart, target for this will be 4400 ( cmp 4700), word of caution there is major support @ 4639 if this is taken out on daily closing basis then there will be free fall up to 4400. Stop loss for this trade hourly closing above 4840, which will change later on according to future price action."

 On Friday 16/12 nifty made high of 4818.85, which will be now stop loss on hourly closing basis for this trade.


Also since 26/8/10 nifty tested sub 4700 level intraday but closed above 4700 3-4 times, but on friaday it closed below 4700.

Incidently on weekly closing basis on 28/8/09 after 2008-09 bear market nifty first time closed above 4700, and now after 2 yrs it closed below 4700 on daily as well as  weekly closing basis. 

Now for this down move various supports ( according to down trending channel mentioned elsewhere on this blog, long term trend line, monthly S1 according to monthly pivot points, 50% Fibonacci retracement    of  whole rally from march 2009 ) comes in 4400-4450 range and also target for this head and shoulder pattern comes 4400, so it looks like nifty will fall up to 4400-4450 region. 


The Chart patterns are suggesting that this fall will be fast, may be in next week only.


To upload various chart for this view will take lot of time, so if time permits may post various charts later on for this view. 


DISCLAIMER: This Blog is meant for sharing my trading ideas only and no calls to be taken as trading recommendation. Visitors please do your own research or consult your advisers for safe trading.

IS IT RIGHT TIME TO INVEST IN STOCK MARKET FOR LONG TERM INVESTOR?

The last 1 year Indian market is falling / correcting. Major indices ( nifty & sensex ) almost corrected by 27-28% from there peak which is created in Nov 11. Most of the stocks corrected more than 50% from there respective peak. It has been historically observed that our market correct for 12-18 months ( exception  correction which started in 2000  almost continued for 3-3.5 yrs.)  and in this correction it is all ready passed  12 months so lot of investors must be thinking is it right time to invest?
It has been observed that in long term equity has been given best post-tax return than any  other financial instrument. The following 3 ways will give best possible returns in equity market.
1) Doing S.I.P. in 4-5 best diversified equity funds.
2) Investing when valuations are cheap according to fundamental analysis.
3) Investing when bottom is formed according to technical analysis.

FUNDAMENTAL ANALYSIS : - According to fundamentals it has been observed that when sensex / nifty P/E starts trading above 25 our market forms top, and when it starts trading below 12 it forms bottom. At present nifty P/E is around 17.25, so according to historical average our market is just undervalued ( not cheap, to become cheap it has to fall 25-30% more ) so there are fair chances it will correct more. But this may or may not happen you never know, it may create bottom here. So if some one waits for cheap valuation he may miss the rally.

TECHNICAL ANALYSIS :- Technically our market is in down trend since Jan 11. Right now it looks like that if on daily closing basis nifty closes below 4625, it may go down to 4400-4500 and may be up to 3600-3900 level. But once again you never know and it is really difficult to catch exact bottom.
      Technically there is strong support in 4625-4700 area , so it may form bottom around these levels.
Historically it has been observed that whenever previous year's low was broken our market corrected for 25-30% from that level. The 2010 low ( 4675 ) has been taken out intra day on 23 & 24 NOV. but it was not taken on daily closing basis. If nifty gives daily and weekly closing  below 4625 there are fair chances that our market will give correction of 20- 30% from this level.
       So whether long term investor should invest at these level or wait ?

According to our view---- first decide out of investable money how much amount you will not require for at least next 5 years. And invest that much money according to one of the following solutions--

SOLUTION 1) -- Invest that money in equal installments for next 12 months.

                     2) -- (A) Invest 30% of that money at current level and if market don't fall much below current level then remaining 70% whenever there is long term up trend according to technical analysis.
                              (B) Invest 30% at 4400 level and if nifty don't fall much below then remaining 40% whenever there is up trend according to technical analysis.
                              (C) Invest remaining 40%at 3900 level.

                    3) -- Invest only after whenever there is long term up trend according to technical analysis. Which will be approximately 15-20% above from bottom level.
ACCORDING TO PRESENT SITUATION TECHNICALLY THERE WILL BE UP TREND ONLY IF NIFTY CLOSES ABOVE 5400 ON WEEKLY TIME FRAME., THIS LEVEL WILL CHANGE ACCORDING TO FUTURE PRICE ACTION.
 Out of the 3 above solutions we think option 2 is good one.

For investment choose 15-20 fundamentally good companies and invest equal amount or choose 5-6 best diversified equity mutual funds and invest equal amount within them.

 If someone is all ready invested in equity market then he  should allocate fresh money only if his equity exposure is less than ideal asset allocation according to his age. THE THUMB RULE IS 100 - AGE , that much % should be in equity. So if someone is 45 yrs. old then 100 - 45 = 55% should be in equity.
                        
DISCLAIMER: This Blog is meant for sharing my trading ideas only and no calls to be taken as trading recommendation. Visitors please do your own research or consult your advisers for safe trading.

NIFTY IN TRIANGLE

Intraday nifty is trading within triangle as shown in chart below and may make decisive move after 5 min closing above resistance line, or below support line.

LONG TERM INFRASTRUCTURE BONDS FOR TAX SAVING.

Apart from the investments in 80C instruments, additional Rs.20,000 can be saved by investing in Long Term Infrastructure bonds with Tax benefi t u/s 80CCF. These Long Term  Infrastructure bonds are issued by rated companies and are thus considered safe. They also offer coupon which are either paid annually or at maturity in cumulative option. These have a lock-in of 5 years, post which they can be traded on the exchange. The maturity period is generally of ten years. By investing in these bonds one can save additional tax.
One can save Rs 2060 in 10% tax bracket, Rs 4120 in 20% and Rs. 6180 in 30% tax bracket.

Some of the issues which will be available in this month for subscription will be ----
1) IDFC long term infra bond issue opens -- 21 Nov. 11, closes -- 16 Dec 11
2) L & T infra tax saving bond  issue opens -- 25 Nov 11, closes -- 24 dec 11
3) IFCI long term infra bond issue opens -- 30 Nov 11, closes 16 Jan 12

this bonds are offering interest rate of around 9%

Considering the tax saving if one is exhausting limit of 1,00,000 under section 80C, can consider investing additional 20,000 in these infrastructure bonds.

DIRTY CANDLE

This is yesterday's 5 min nifty future chart. Watch the last candle which is bearish ( suggests down move ). Whenever such candle is there and accompanied by large volume, most of the time next day there is gap down ( lower )opening. Even though if there is no gap down opening most of the times next day market closes at lower level than previous day.s closing.
 DISCLAIMER: This Blog is meant for sharing my trading ideas only and no calls to be taken as trading recommendation. Visitors please do your own research or consult your advisers for safe trading.

NIFTY GROUP

Started nifty group on face book, here is link http://www.facebook.com/groups/204419819633492/edit/, in this group will try to post whenever there is interesting happenings in market and not having sufficient time to post in detail or post charts on blog.

Yesterday at around 3:30pm mentioned that nifty will correct at least up to 5010-15 and today within 1.5 hrs of trading it is all ready below 5000.

NIFTY - SHORT TERM RALLY OVER ?

Yesterday nifty opened with huge gap up because positive global cues, but got sell from important resistances.
Weekly trend is still down, so this market is SELL ON RISE , which should be ideally done at resistances. Yesterday it sold off at various resistances which are 1) 200 EMA on hourly chart, 2) 50 SMA on daily chart,  3) 50 EMA on daily chart, 4) 50% Fibonacci retracement of entire fall from 5400 to 4640, 5) weekly R2 pivot.

So now if yesterday's high i.e. 5011.90 is not taken out , it will target 4850, 4700, recent low at 4640 and possibility of making new low since it got sold off from so many resistances.

Whenever time permits will try to post detail technical analysis and charts.

 DISCLAIMER: This Blog is meant for sharing my trading ideas only and no calls to be taken as trading recommendation. Visitors please do your own research or consult your advisers for safe trading.

NIFTY CUP AND HANDLE PATTERN IN MAKING ?

As shown in chart nifty is making cup and handle pattern in 5 minute chart, so if 5 min candle on closing basis if closes above resistances 4710, 4720 it will target 4790-4800, stop loss for this trade will be close below recent trough which is right now at 4672.35
 DISCLAIMER: This Blog is meant for sharing my trading ideas only and no calls to be taken as trading recommendation. Visitors please do your own research or consult your advisers for safe trading.

FOLLOW UP LT

On http://kolhapuritrader.blogspot.com/2011/10/larsen-toubro-l-view.html 27 Oct. it has been mentioned that, "  As shown in chart 2 above there is positive divergence, so in short term looks like it will target 1400-1450-1500." After making high of 1429 on 31 Oct it reverted back.

Also in the same post it has been mentioned that " So from above chart it is clear that LT made HEAD N SHOULDER PATTERN on weekly chart, and broken down the neck line on 23/9/11 (weekly closing basis). The target for this pattern comes to be 1200. So looks like it will fall to 1200." Today it made low of 1182.50 and closed at 1189.25 thus long term target of head and shoulder pattern reached.

LT GAP

Now it may try to fill the ELECTION GAP created on 18 may 2009

 DISCLAIMER: This Blog is meant for sharing my trading ideas only and no calls to be taken as trading recommendation. Visitors please do your own research or consult your advisers for safe trading.

FOLLOW UP NIFTY AT SUPPORT

On 21 Nov. in this post it has been mentioned that " Also note that if 4700 is taken out as shown in below chart the long term trend line around 4650 may also try to give support." Now see the result as shown in the chart today after breaking 4700, nifty within matter of 10 minutes crashed up to 4640, taken support there and reverse back. This is not coincidence this is power of technical analysis, u can predict future price movements with chart readings.

LONG TERM TREND LINE ON WEEKLY CHART.

Now if  4640 is taken out, it may fall up to 4450-4500. For any up-move 4720-30 will act as resistance.

CAUTION : TOMORROW IS EXPIRY DAY SO NIFTY MAY CLOSE ABOVE 4700 AS PER OPTION DATA ( HIGHEST OPEN INTEREST IN 4700 PUT). AND SINCE IT HAS TAKEN SUPPORT AT LONG TERM TREND LINE IT MAY TRY TO REVERT FROM HERE AND MAY START UP MOVE, AS OF NOW THIS LOOKS VERY REMOTE POSSIBILITY, BUT MARKET MAY TRAP MOST OF PEOPLE ON WRONG SIDE AND MAY MOVE IN OPPOSITE DIRECTION. THIS IS TIME TO BE VERY CAUTIOUS, STICK TO YOUR TRADING PLANS AND BE READY TO CHANGE YOUR VIEWS IF PRICE MOVEMENT SUGGESTS.

 DISCLAIMER: This Blog is meant for sharing my trading ideas only and no calls to be taken as trading recommendation. Visitors please do your own research or consult your advisers for safe trading.

NSE PAATHSHAALA -- पाठशाला

Those who are interested to learn trading without using a single pai, can use this link from national stock exchange - http://www.nseindia.com/NP/nse_paathshaala.htm

Here after registering each user account shall be provided Rs. 5,00,000 as virtual cash, i.e. paper money. Instead of using real money u can use this money for trading / investing and u can analyze your own results.

Here is link for help page for "HOW TO TRADE" http://www.nseindia.com/NP/how_to_trade_paathshaala1.1.pdf

Here u can get information regarding what is meant by market order, limit order? And various other terminology also can learn to put orders on your own via internet. So start learning.

HAPPY LEARNING!

NIFTY NEAR SUPPORT

NIFTY : WEEKLY CHART

As shown in the chart nifty is near it's support, which given support many times in past so there is possibility of bounce back. But if 4700 is taken out then next support comes from lower trend line of down trending channel which is approximately at 4450- 4500 level. So if 4700 is taken out it may target 4450-4500. And if it breaks lower trend line then it may feel ELECTION GAP created on 18 may 2009.

Also note that if 4700 is taken out as shown in below chart the long term trend line around 4650 may also try to give support.

DISCLAIMER: This Blog is meant for sharing my trading ideas only and no calls to be taken as trading recommendation. Visitors please do your own research or consult your advisers for safe trading.

TRADING STOCKS

Trading stocks is not easy, it is high risk and low probability of success for most of the traders / investors. A STUDY HAS BEEN REVEALED THAT 80% OF ACTIVE TRADERS LOSE MONEY. The most of the traders loose because they trade without a proven system. Don't even think about relying on anything or anyone else for trading advice. Trusting tip providers is big gamble. They don't know how to trade and make money, but they know how to sell stocks. Market manipulations also happen and is out of your control. That is why you must know what's going on with the money you invest or trade.Otherwise who knows what will happen. Insider trading puts small investors and traders at risk who are trading without system.You cant depend on company results also anymore ( remind satyam scam ). But you can fight with all these odd situations if u try to learn technical analysis and develop your own trading system. It is difficult but not impossible, u have to read lot, you have to see and try to analyze n number of charts, slowly but surely u will become successful.

The main aim of starting this blog is to help our friends who are interested in learning financial planning, investing, trading. While learning we have faced lot of problems, lost money also ( actually that is fee we paid for our learning ). But the most valuable fee we paid is in form of TIME , believe us we were spending on an average 75-80 hours per month almost for 4 years ( 4 YEARS  ), for surfing and reading material related to financial planning, investing and trading.

SO BOTTOM LINE IS TO BECOME A SUCCESSFUL TRADER U MUST HAVE PASSION FOR CAPITAL MARKET, U MUST TRY TO LEARN HARD, U MUST HAVE PATIENCE . YOU NEED YOUR OWN TRADING SYSTEM THAT WORKS PREDICTABLY IN ANY MARKET SITUATION.AND THE LAST BUT NOT THE LEAST  YOU MUST BE VERY MUCH DISCIPLINED TO FOLLOW  YOUR SYSTEM TO MAKE SMALL BUT CONSISTENT MONEY TO BECOME FINANCIALLY FREE. ALSO THEN AND THEN ONLY YOU CAN CONSIDER TRADING AS A BUSINESS.

SOME OTHER TIME WILL RIGHT WHY IT IS MOST IMPORTANT TO BE DISCIPLINED AND ALSO WHAT IS MEANT BY FINANCIALLY  FREE ?

WILL IT BOUNCE BACK FROM HERE

On 11 Nov. in this post http://kolhapuritrader.blogspot.com/2011/11/will-it-hold-5170-80-today.html we have mentioned that " As shown in hourly chart 2, nifty is range bound whithin 5215- 5315 since 1/11/11,  so now if hourly close is below 52125 it may target 5215-100 =5115 . Also in hourly chart there is descending triangle formation which gives target of 5065.
Also if u observe chart 1 50SMA ( shown in pink colour) is at 5050 on daily chart

AND Conclusion : short term - downtrend target 5115, 5050-65. " THUS BOTH THESE TARGETS HAVE BEEN ACHIEVED WITHIN TWO TRADING SESSIONS. 

DAILY 50 SMA

 Now as shown in the above chart yesterday it closed at 50 SMA on daily chart so if yesterday's low which is 5052.85 so approximate 5050 is held ( ON CLOSING BASIS NOT INTRADAY ) , there is possibility of bounce back ( i.e. up move ) . AND THE RESISTANCES ( I.E. TARGETS ) FOR THIS UP MOVE WILL BE 5120, 5170/80 , 5200.


NOTE : short term trend is down


              intermediate term trend is up


              long term trend is down.


DISCLAIMER: This Blog is meant for sharing my trading ideas only and no calls to be taken as trading recommendation. Visitors please do your own research or consult your advisers for safe trading.

WHY STOP LOSS IS MUST WHILE TRADING

Trading and investing are to different things. While investing is for long term duration, trading is for very  short term so while trading it is necessary to follow stop losses very strictly. JUST SEE WHY ?

Yesterday we mentioned that " As shown in above chart there is positive divergence ( price making lower low while indicator making higher high ) looks like now it will target 5170-80 / 5200 in next 2-3 trading sessions. Stop loss for this trade will be today's low 5120.95 ". in this post  http://kolhapuritrader.blogspot.com/2011/11/fpllow-up.html

FREE FALL AFTER STOP LOSS TAKEN OUT

As shown in the chart nifty is trading above the support ( i. e. low) almost for four and half hours but once the intraday support is taken out ( i. e. 5 min candle closed below 5120.95 there is free fall and nifty falled almost 60-65 points within one and half hour. So if someone  not followed stop loss after buying according to positive divergence on hourly chart he/ she has to bear the loss, which otherwise has been limited if stop loss has been followed.

CONCLUSION : DISCIPLINE IS IMPORTANT REQUIREMENT TO BECOME A SUCCESSFUL TRADER.

DISCLAIMER: This Blog is meant for sharing my trading ideas only and no calls to be taken as trading recommendation. Visitors please do your own research or consult your advisers for safe trading.

FOLLOW UP

On Friday in this post http://kolhapuritrader.blogspot.com/2011/11/will-it-hold-5170-80-today.html we have mentioned that "NOTE : UNTILL WE PREPARE THIS POST AT 10 AM NIFTY CLOSED AT 5185.50 WHICH IS BELOW 5215, SO IT LOOKS LIKE AT LEAST IT WILL TARGET 5115 WITHIN 2-3 TRADING SESSIONS."
 Now today low made was 5120.95, so the target of 5115 is almost done, and on hourly chart there is positive divergence as shown in chart below, if someone have shorted at 5185.50 should have booked profit at around 5120-30, so there is cool profit of 55-65 points within 2 trading sessions. THUS AS PER SAYING TRADING IS GAME OF PROBABILITY, IF U TRY TO LEARN HARD, AND ABLE TO PREDICT FUTURE PRICE MOVEMENT MOST OF THE TIMES ( YOU MAY NOT BE RIGHT ALWAYS BUT MOST OF THE TIMES YOU SHOULD BE RIGHT ) YOU WILL ABLE TO WIN THIS GAME !

HOURLY CHART POSITIVE DIVERGENCE.

As shown in above chart there is positive divergence ( price making lower low while indicator making higher high ) looks like now it will target 5170-80 / 5200 in next 2-3 trading sessions. Stop loss for this trade will be today's low 5120.95

WILL IT HOLD 5170-80 TODAY?

Due to weak global cues nifty opened gap down today so now the big question is will it hold 5170-80 today( the previous resistance should act as support )

CHART 1 : NIFTY EOD

As shown in the chart 1 previous resistance ( blue line ) may act as support for this fall / correction.

CHART 2 : HOURLY

As shown in hourly chart 2, nifty is range bound whithin 5215- 5315 since 1/11/11,  so now if hourly close is below 52125 it may target 5215-100 =5115 . Also in hourly chart there is descending triangle formation which gives target of 5065.
Also if u observe chart 1 50SMA ( shown in pink colour) is at 5050 on daily chart.

CHART 3 : DAILY

Also as shown in chart 3 5030-40 area is tested so many times so  it will act as support.

So now if on hourly if it closes below 5210-15 it will target 5115.

And today if it closes below 5170-80 may be 20-30 points here & there so if below 5150, being today is last day of week, nifty will become weak and it will target 5050-65.

Conclusion : short term - downtrend target 5115, 5050-65.

                    medium term - uptrend target 5250-60 (50EMA & 50SMA) on hourly chart, 5400 (200SMA on daily chart shown in pink colour in chart 1). Also 5400 is approximate value where downtrend line is acting as resistance on weekly chart since november 2010 as shown in chart 4 below.

CHART 4 : WEEKLY

In short once again nifty will be range bound only in near term and range will be 5050 to 5350-5400 and 5200 being mid point.
NOTE : UNTILL WE PREPARE THIS POST AT 10 AM NIFTY CLOSED AT 5185.50 WHICH IS BELOW 5215, SO IT LOOKS LIKE AT LEAST IT WILL TARGET 5115 WITHIN 2-3 TRADING SESSIONS.

CHART 5 : WEEKLY, INSIDE BAR

As seen in chart 5 nifty made inside bar last week , low of which is at 5201.85 so  today if it closes below 5201.85 it will be bearish.

SO IN SHORT IN SHORT TERM NIFTY LOOKS WEAK.
DISCLAIMER: This Blog is meant for sharing my trading ideas only and no calls to be taken as trading recommendation. Visitors please do your own research or consult your advisers for safe trading.

BULLISH ENGULFING CANDLE IN MONTHLY CHART

Today is last day of October, and if we see monthly chart of nifty there is bullish engulfing candlestick pattern which is bullish.

MONTHLY CHART- BULLISH ENGULFING

Now let us see what is meant by bullish engulfing --

The bullish engulfing pattern consists of 2 candlesticks, the first one is black & second one is white. The body of white candlestick must totally engulf the body of black candlestick. This usually forms after downtrend. After a decline, the second white candlestick begins to form when selling pressure cause the stock to open below the previous close. Buyers step in and push price above the previous open for a strong finish and a potential short term reversal. THE LARGER THE WHITE CANDLESTICK AND MORE THE ENGULFING IT IS STRONGER REVERSAL.

DISCLAIMER: This Blog is meant for sharing my trading ideas only and no calls to be taken as trading recommendation. Visitors please do your own research or consult your advisers for safe trading.

IS THIS BEGINING OF NEW BULL MARKET ?

1)Due to the positive global cues nifty posted weekly gain of  6.15%, & most important thing is that it closed above the resistance line at 5170-5200, which is previously acting as support line. Thus after breaking down the descending triangle on 12/8/11 (weekly closing basis), nifty is back in the triangle.

CHART 1 : NIFTY BACK IN TRIANGLE

So the descending triangle break out which is discussed here http://kolhapuritrader.blogspot.com/2011/08/follow-up-nifty-in-triangle-and.html may turn out to be false breakdown.

2) It has been said that bull market is alive above 200 SMA, while bear market is alive below 200 SMA. Now just look the 2 interesting charts.

CHART 2 : 200 SMA WEEKLY CHART

CHART 3 : 200 SMA DAILY CHART

It is seen that nifty is above the 200 sma in weekly chart ( for 1 week i.e. week ending on 26/8/11 it closed below 200 sma but from next week it closed above 200 sma ), that means it is bull market ( uptrend) in weekly time frame. However nifty is below the 200 sma in daily chart, that means it is in bear market (down trend ) in daily time frame. THIS MUST BE THE TECHNICAL REASON WHY NIFTY TRADED WITHIN THE RANGE ( 4700 -5200) FOR 11 WEEKS, WHATEVER MAY BE LOCAL / GLOBAL FUNDAMENTAL REASONS.

3) NIFTY made double bottom as shown in the chart below, and broken the resistance line. DOUBLE BOTTOM is bullish pattern.

CHART 4 : DOUBLE BOTTOM

4) As seen in chart 5 nifty broken the 500 point range within which it is trading for 11 weeks, so now it should target 5200 + 500 = 5700.

CHART 5 : NIFTY OUT OF RANGE

5) SO INFERENCE IS THIS MAY BE BEGINNING OF NEW BULL MARKET. FOR THIS UPTREND TO CONTINUE FOLLOWING ARE PREREQUISITES : -
       A) It should start trading above 200 sma on daily chart.
       B) It should start trading above the resistance line of descending triangle which is shown in chart 1.
       C) The previous resistance at 5170-5200 should now act as support for any dip.
       D) AND LAST BUT MOST IMPORTANT THAT IN ANY DIP IT SHOULD HOLD ( SHOULD   NOT BREAK) 4700 LEVEL.
       IF IT BREAKS BELOW 4700 THIS WHOLE VIEW WILL GET NEGATED AND THERE WILL BE SEVERE FALL.

DISCLAIMER: This Blog is meant for sharing my trading ideas only and no calls to be taken as trading recommendation. Visitors please do your own research or consult your advisers for safe trading.

LARSEN & TOUBRO (L&T) VIEW

Usually we don't track n analyze individual stocks but 2 days back one of our friend asked is there any news related to LT, why the stock is falling and whether we should buy LT from long term perspective?
We think fundamental analysis needs understanding of economy as well as individual company and u should be able to analyze company result every quarter. We searched for LT related news and found that there is slow down in orders, also there is margin pressure that may be reason why stock is falling.

LT is one of the largest and most respected company in India's private sector so from long term perspective (for 5-10 year) it is good buy at current market price. But we think by applying technical analysis we can time our entry or exit from stock, as per saying every news is all ready reflected in charts and news follows later on, we decided to study weekly chart for long term perspective and daily chart for short term view.

LONG TERM VIEW :

CHART 1

  So from above chart it is clear that LT made HEAD N SHOULDER PATTERN on weekly chart, and broken down the neck line on 23/9/11 (weekly closing basis). The target for this pattern comes to be 1200. So looks like it will fall to 1200.
 NOTE :- Any long term investor who is following weekly chart may have exited LT on 7/1/11 at price1845-50.
On weekly chart according to recent chart unless there is weekly close above 1723 there will not be uptrend. This level may change in future according to price action, we will post whenever there is uptrend, so keep following.

SHORT TERM VIEW :-

CHART 2

 As shown in chart 2 above there is positive divergence, so in short term looks like it will target 1400-1450-1500. The stop loss for this trade is daily close below recent low which is 1267. By buying at present current price and managing the trade technically ( i.e. by using trailing stop loss ), there is possibility that one can earn 5-10%.

NOTE:- As shown in chart 2 in august also there is positive divergence, if someone has traded that he may have earned 6-15% at that time.
Even though L & T has lost almost 38% from Nov 10, if someone has traded these two positive divergences only in L & T , he should have earned 10-15%. This is how technical analysis is more useful than fundamental analysis, there is no need to study results, track news or watch television channels.

KINDLY NOTE WHEN WEEKLY CHART INDICATED TO EXIT L & T ON 7/1/11, THERE ARE NO NEWS RELATED TO EUROPEAN DEBT CRISIS, INFLATION, RISING INTEREST RATE, ORDER SLOW DOWN OR MARGIN PRESSURE, ALL THOSE NEWS FOLLOWED LATER ON WHAT IS INDICATED BY TECHNICALS  MUCH EARLIER.

DISCLAIMER: This Blog is meant for sharing my trading ideas only and no calls to be taken as trading recommendation. Visitors please do your own research or consult your advisers for safe trading.

HAPPY DEEPAVALI

WISHING U AND UR FAMILY HAPPY DEEPAVALI  AND HEALTHY N WEALTHY NEW YEAR

INTRADAY BULLISH

Since as shown above 5 min candle closed above previous Resistance at 5145, it looks like now it will target 5190. This possibility will increase if 5 min candle closes above today's high 5154.15. The stop loss should be 5 min candle close below recent low 5132.80

DISCLAIMER: This Blog is meant for sharing my trading ideas only and no calls to be taken as trading recommendation. Visitors please do your own research or consult your advisers for safe trading.

FOLLOW UP NIFTY ASCENDING TRIANGLE

The making of ascending triangle posted here http://kolhapuritrader.blogspot.com/2011/10/nifty-ascending-triangle-5-minute-chart.html failed since instead of breaking out it broken down as shown in following chart.

Also note the NEGATIVE DIVERGENCE of rsi indicator ( i.e. indicator is making lower low, while price is making higher high) which is bearish one, so looks like it will target near todays low i.e. 5113-5115.STOP LOSS SHOULD BE CLOSE ABOVE 5145.

DISCLAIMER: This Blog is meant for sharing my trading ideas only and no calls to be taken as trading recommendation. Visitors please do your own research or consult your advisers for safe trading.

NIFTY- ASCENDING TRIANGLE- 5 MINUTE CHART

Today nifty is trading within ascending triangle on 5 minute time frame. Ascending triangle is bullish pattern so any close above 5145 will target 5175 (5145-5115=30 so 5145+30=5175) within matter of few minutes. Remember the next strong Resistance is at 5170-80 level so intraday traders should book profit  there if there is break out.

DISCLAIMER: This Blog is meant for sharing my trading ideas only and no calls to be taken as trading recommendation. Visitors please do your own research or consult your advisers for safe trading.

NIFTY IN TRIANGLE

Nifty is trading within the triangle since last 5-6 trading sessions as shown in following chart.

If it breaks from this triangle nearly it will give target of around 150 points. Since nifty is trading in narrow range since last 11-12 weeks keep possibility of false breakout/ breakdown and keep tight stop loss just below the low made within triangle before breakout for uptrend or just above the high  made within the triangle before breaking down for down trend.

DISCLAIMER: This Blog is meant for sharing my trading ideas only and no calls to be taken as trading recommendation. Visitors please do your own research or consult your advisers for safe trading.

RIDING THE EQUITY WAVE

Nice article from moneyworks4me.com about why it is necessary to invest in stock(equity) market. HERE IS LINK http://stockshastra.moneyworks4me.com/learn/why-invest-in-stocks-equity-wav/?utm_source=MadMimi&utm_medium=email&utm_content=Volatility+grips+the+market%3B+Why+you+still+need+to+invest+in+Equities%3F&utm_campaign=14+October+blog&utm_term=Click+to+read+the+post

 HAVE U NOTED NAME OF WEBSITE www.moneyworks4me.com isn't it interesting? Have u ever thought how hard u are working to earn money and was your money also working hard for u? Just give a thought.

DISCLAIMER: This Blog is meant for sharing my trading ideas only and no calls to be taken as trading recommendation. Visitors please do your own research or consult your advisers for safe trading.

INTERMEDIATE TREND TURNED UP

According to our trading strategy today intermediate trend turned up (i.e. BUY ON DIPS). So now short term and intermediate trend are up. BUT REMEMBER LONG TERM TREND IS STILL DOWN.

Since intermediate trend turned up it looks like now our dear nifty fifty will target the wall of resistance 5200 and may be after some retracement as mentioned in this link http://kolhapuritrader.blogspot.com/2011/10/inverted-head-and-shoulder-cup-and.html it will target 5350.

WANT TO INVEST SMART AND BECOME RICH? HERE'S HELP!!!

NICE ARTICLE FROM REDIFF BUSSINESS. HERE IS A LINKhttp://www.rediff.com/business/report/perfin-want-to-invest-smart-and-be-rich-heres-help/20111013.htm

INVERTED HEAD AND SHOULDER / CUP AND HANDLE PATTERN IN HOURLY CHART

As shown in above chart nifty formed INVERTED HEAD AND SHOULDER PATTERN in hourly chart with neck line at 5050 and broken above this neck line yesterday. The target will be equal to height of head i.e. 5050-4750=300 points above neckline, therefore it should target 5050+300 =5350.

In above chart it looks like it had formed CUP AND HANDLE PATTERN from which it is broken out, overall it looks like it will target 5350.

To reach this target of 5350 it should negotiate 2 main hurdles (resistances) on daily chart as shown in third chart. If u observe carefully, u can note that today it get resisted at resistance 1. If tomorrow (FRIDAY - SO WEEKLY CLOSE) it closes above resistance2 approximately above 5180 possibility of it reaching 5350 increases. Right now it is trading above 20sma & 50sma on daily charts, till it closes above 20 & 50sma it will favor uptrend.
       But at the same time it is near the upper border of trading range of 4700-5200, so take care it may go down also. These are testing times of trader's patience. If u have good trading system follow it u will be on right side. REMEMBER LONG TERM TREND IS STILL DOWN.

DISCLAIMER: This Blog is meant for sharing my trading ideas only and no calls to be taken as trading recommendation. Visitors please do your own research or consult your advisers for safe trading.

LINK OF ONE GOOD ARTICLE FROM YAHOO

http://in.finance.yahoo.com/news/Tips-invest-turbulent-times-yahoofinancein-4124772823.html

IS INTERMEDIATE BOTTOM FORMED?

As mentioned here http://kolhapuritrader.blogspot.com/2011/10/range-bound-consolidating-nifty-fifty.html and here http://kolhapuritrader.blogspot.com/2011/10/follow-up-rangebound-consolidating.html our dear nifty fifty is consolidating between 4720 and 5230.

In above weekly chart shows that it is consolidating in above mentioned range since last 9 weeks, the ongoing one is 10th week. The longer it stays within this range, the more valid will be breakout from this range which will give trading opportunity for target of 500 points.
         Most of the times consolidation or range breaks in the direction of prior trend which is down trend. So possibility of breaking down is more. Is this consolidation is preparation for bigger fall?  But remember trading is game of probability so think of other possibility i.e. breaking on upside also. REASONS--- 1) Even after so many negative news locally as well as globally it is holding 4720-4750 level, in fact it is bounced thrice from this level, is it tripple bottom formation? 2) As mentioned here http://kolhapuritrader.blogspot.com/2011/08/follow-up-nifty-in-triangle-and.html, even after breaking the descending triangle nifty is not fallen much and it is consolidating will it lead to false breakout? The triangle patterns are most of the times successful but 20-25% of times there are chances of failure.

So keep both the possibilities open upside  break out should be associated with good volume ( otherwise it will be false one), for break down there will not be need of good volume support, most probably without volume support also market may fall.

NOTE- RIGHT NOW OUR SYSTEM IS IN BUY MODE.

DISCLAIMER: This Blog is meant for sharing my trading ideas only and no calls to be taken as trading recommendation. Visitors please do your own research or consult your advisers for safe trading.

FOLLOW UP HOW WE MAKE MISTAKES WHILE TRADING

On 23 Sept written about how we make mistakes while trading here http://kolhapuritrader.blogspot.com/2011/09/how-we-make-mistakes-while-trading.html.After analyzing decided to exclude the added new indicator.

HAPPY DUSSEHRA

WISHING ALL OF OUR BLOG READERS HAPPY DUSSEHRA!