Always remember trading is a game of probability, u should guess the best possible probability by using technical analysis. We will see how these probabilities work and what is the possibility we are seeing right now.
JUST SEE THIS POST http://kolhapuritrader.blogspot.com/2011/04/200-sma.html posted on 18 apr 2011.As mentioned 200 sma has given support on daily chart and nifty rallied from that level as shown in the chart below
Also on 17 april it has been mentioned that nifty is consolidating in the range of 5700-5950 and as can be seen in the following chart nifty has taken support at 200 ema on hourly chart.
So looking at these possibilities if trader has initiated buy position on 19 April with proper stop loss he must had profit of 200 points within 2 days since nifty had made high of 5912.80 on 21 april. Right now we also not trading these probabilities since it requires lot of follow up and monitoring of charts, in performance suggesting trades according to our trading system which requires less monitoring. Here just trying to explain how probabilities of technical analysis work, sometimes they fail also hence u have to change your view according to changes in chart.
Now let us see what is the possibility we are looking right now---
see how nifty is facing resistance that is unable to go above resistance line, and taking support that is unable to go below support line as shown in the daily chart below
Also see that it is resisting at important Fibonacci level on daily chart as shown below
Many technical traders use fibonacci retracement to identify major support and resistance.Fibonacci retracement is created by taking major peak and low on a chart and dividing vertical distance between this peak and low by the key fibonacci ratios of 23.6%, 38.2%, 50% , 61.8% & 76.4%. Right now 61.8% retracement acting as resistance to nifty, hence short term trader can sell nifty here with proper stop loss.
BUT SEEING LAST WEEK CLOSE WE ARE HAVING FEELING OF NIFTY WILL TAKE OUT THESE RESISTANCES WHICH WILL BE MAJOR BREAKOUT FOR NIFTY ( i.e. IT STARTS TRADING ABOVE 5940-50 ) AND POSSIBILITY OF MAKING NEW LIFE TIME HIGH IN THIS FINANCIAL YEAR. BUT THIS VIEW WILL CHANGE IF ----
1) It breaks today's low of 5791.55
2) daily close below 5693.25
3) weekly close below 5177.70
WILL IT BREAKOUT IN THIS OR NEXT WEEK ONLY ? WE HAVE TO WAIT AND WATCH .
NOTE : TO VIEW ENLARGED CHARTS CLICK ON CHARTS
KINDLY NOTE HENCEFORTH IN PERFORMANCE SHEET WE WILL MENTION NIFTY SPOT VALUES.
JUST SEE THIS POST http://kolhapuritrader.blogspot.com/2011/04/200-sma.html posted on 18 apr 2011.As mentioned 200 sma has given support on daily chart and nifty rallied from that level as shown in the chart below
Now let us see what is the possibility we are looking right now---
see how nifty is facing resistance that is unable to go above resistance line, and taking support that is unable to go below support line as shown in the daily chart below
BUT SEEING LAST WEEK CLOSE WE ARE HAVING FEELING OF NIFTY WILL TAKE OUT THESE RESISTANCES WHICH WILL BE MAJOR BREAKOUT FOR NIFTY ( i.e. IT STARTS TRADING ABOVE 5940-50 ) AND POSSIBILITY OF MAKING NEW LIFE TIME HIGH IN THIS FINANCIAL YEAR. BUT THIS VIEW WILL CHANGE IF ----
1) It breaks today's low of 5791.55
2) daily close below 5693.25
3) weekly close below 5177.70
WILL IT BREAKOUT IN THIS OR NEXT WEEK ONLY ? WE HAVE TO WAIT AND WATCH .
NOTE : TO VIEW ENLARGED CHARTS CLICK ON CHARTS
KINDLY NOTE HENCEFORTH IN PERFORMANCE SHEET WE WILL MENTION NIFTY SPOT VALUES.
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