LONG TERM VIEW

Even though fundamentals of Indian and world economy are not supporting  technicals   are suggesting possibility of long term up move ( at least for next 2-3 years ). In Nov 2010 NIFTY / SENSEX after testing the previous high made in 2008 started there downward journey. And as of now made bottom in DEC 2011.

NIFTY - WEEKLY

The chart given above is weekly chart. During down move from Nov 10, it formed downward moving trend line which acted as resistance for 4 times. Finally in Feb 12 NIFTY able to breakout above the resistance line. After breakout NIFTY tested the trend line in May n June when previous resistance line acted as support.

 As shown in the weekly chart above, NIFTY after breakout above resistance line consolidated ( i.e. traded in a narrow range) and in the process formed a triangle pattern. Yesterday it gave breakout from this triangle pattern on daily closing basis. So now it may target 5550-5600 with intermittent correction, meanwhile it may correct and may test upper boundary of the triangle.
CAUTION:- in market breakouts may fail, and you have to change your views according to future price action with proper stop losses.

  As shown in the chart above there is one more resistance line on weekly chart, near which NIFTY is trading right now. So actually if NIFTY gives weekly close above this trend line, and also weekly close above previous swing pivot i.e. above 5350 ( to be precise above 5348.55), very much  strength will be added to this up move

SO IN SHORT, IF NIFTY GIVES WEEKLY CLOSE ABOVE 5350 ONE CAN SAFELY BUY QUALITY STOCKS OR MUTUAL FUNDS FOR INITIAL TARGET OF 5600. AND IF THINGS GO WELL IT MAY TARGET 6300 IN APR-JUNE  QUARTER OF 2013.  

THE STOP LOSS FOR THIS VIEW AS OF NOW IS WEEKLY CLOSE BELOW 5030 ( TO BE PRECISE BELOW 5032.40 ). i.e. IF NIFTY GIVES WEEKLY CLOSE BELOW 5032.40 YOU SHOULD EXIT ALL YOUR BUY POSITIONS. 

IF NIFTY GIVES WEEKLY CLOSE ABOVE THE RESISTANCE LINE AND 5350 THERE WILL BE HIGH PROBABILITY THAT IN NEXT 2-3 YEARS IT MAY REACH 10,000. SO IF IT GIVES WEEKLY CLOSE ABOVE THE LEVELS MENTIONED ABOVE AND ONE IS READY TO ACCEPT LOSS OF 6-10% FOR A POSSIBILITY OF DOUBLING CAPITAL WITHIN NEXT 2-3 YEARS ONE CAN BUY QUALITY STOCK / MUTUAL FUND WITH STOP LOSS OF WEEKLY CLOSE BELOW 5030.

CAUTION:- The blog writers are also learners of technical analysis and the view mentioned here are on blog writers knowledge and inference of technical analysis, so readers are advised to take advice from expert financial advisers or do there own research before taking any decisions.

One more thing we like to mention:- in technical analysis you have to change your views according to future price action or pattern development and writers of this blog may or may not be able to update changed views.

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

GOLD --- 33,000 ?

This is weekly chart of gold which shows this week gold had breakout from ASCENDING TRIANGLE pattern. On 1/6/12 it made LIFE TIME HIGH also. The breakout from ascending triangle pattern gives target roughly around 33,000/-, will it be achieved? We will just wait n watch.

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

FOLLOW UP NIFTY IN TRIANGLE

On 2'nd march it has been mentioned that nifty is trading in triangle. Let's analyze what happend next & what is possibility now  ----

On Friday (2'nd march) it gave intraday  spike above 5380, but it was not able to give hourly close above 5380. On Saturday market was open from 11:15 am to 12:45 pm & at 12 noon it gave hourly close above the upper border of triangle but without significant volume. If we don't consider volume, there looks possibility of 5600 but stop loss for this trade was hourly close below 5324. And now at 10 am it closed below 5324, as well as lower border of triangle. So now it looks like that, it will target 5100, at least 5200 this week.

Caution :- tomorrow result of U.P. election will be declared, so there is possibility of volatility which we all ready experiencing since last week.Therefore any trade should be followed with strict stop loss. Stop loss for this trade is hourly close above 5369.60

   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.

SHORT TERM VIEW --- NIFTY IN TRIANGLE

Right now NIFTY is trading in triangle (height of triangle approximately 230 points. So if it gives hourly close above 5380,  it will target 5580-5600. At the same time if it gives hourly close below 5310-20, it will target 5100. Lets see which way it breaks.

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.

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.

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.

FAILED ASCENDING TRIANGLE

As mentioned in yesterday's post the making of ascending triangle failed, since instead of breakout today on hourly chart at 10 AM it broken down the support line and what a great fall after that.

That is why trading is called as game of probability i.e. you should always think of other possibility also and ready to take the opportunity.
NOTE :- These post's are for informative purpose for those who are trying to learn technical analysis and also to refresh our knowledge.
 At present according to our improved strategy we are still in buy (long) position.

CAUTION : LARGER TIME FRAME 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.

? ASCENDING TRIANGLE MAKING ON HOURLY CHART

As shown in above chart right now there is ascending triangle making in progress on hourly chart. If the overhead resistance which is at 5170 is taken out, and it also goes above 5230 which is the lower border of gap (5330-5230) created on daily chart on 5/8/11, it will try to fill the gap i.e. will reach upper border of gap.
     
         The target for ascending triangle breakout will be5620 i.e. 5170-4720 =450 points, hence 5170 +450= 5620.

Also as in above chart 50EMA is approaching 200EMA on hourly chart. If 50EMA crosses above 200EMA which is known as GOLDEN CROSS, our dear nifty will become bullish in short time frame.

CAUTION : LARGER TIME FRAME 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.

IS PULLBACK RALLY OVER?

Looking to Friday's fall the question comes to mind is that is pullback rally over?


REMEMBER, IN DOWNTREND/ BEAR MARKET RALLIES GET SOLD AT RESISTANCES. 

So, which are the resistances.

1) Breakdown level from descending triangle. Which is at 5170-5200 level. See the chart above you can realize that how prices got resisted at breakdown level last week.

2) Second resistance level is at gap area ( 5230-5330) created because of gap down opening on 5/8/2011, as shown in chart below.

3) 38.2% retracement (5095), 50% retracement (5210), 61.8% retracement (5330) of recent downfall as shown in the chart below may act as resistances.

4) The down-trending line shown in chart 1 which is approximately at 5550 level.

5) At last but not least ( which will be important resistance line) is 200 SMA on daily chart, which will act as wall of resistance. REMEMBER, BEAR MARKET LIVES BELOW 200 SMA. 
200 SMA on daily chart is right now at 5560 level.

So these are various resistances, where rallies will likely get sold.

At the same time if you see the weekly cart given above, last two weeks formed higher high and higher low, so in short term last week's low ( at 4943), 200 week s.m.a. ( approximately at 4830), and recent major low ( 4720) formed on 26/8/11, will try to give support.

CONCLUSION :- IN COMING DAYS IT WILL TRY TO CONSOLIDATE BETWEEN 4700-5200 RANGE BEFORE TAKING ANY DECISIVE MOVE. IT WILL TRY TO GET CLUE FROM R.B.I. CREDIT POLICY WHICH IS DUE ON COMING FRIDAY 16/9/2011.

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 IN TRIANGLE AND POSSIBILITY OF NEW HIGH

 We are talking of triangle pattern since last few weeks, on 31 July it has been mentioned that ---
NIFTY IS TRADING IN TIGHT RANGE AND NEARING THE APEX OF TRIANGLE, SO IT MAY GO UP OR DOWN AND SINCE IT IS NEARING APEX CLEAR DIRECTION WILL B RESOLVED IN NEXT 3-4 WEEKS. See the link http://kolhapuritrader.blogspot.com/2011/07/nifty-still-in-triangle.html 
       Now if u see the chart given below it has broken down the support line in week ending on 5/8/11

NIFTY TRIANGLE

 So according to as explained in chart since the height of triangle is approx. 1300 points (6350-5050=1300), the target will be 5400-1300=4100, WHICH WILL BE MOST PROBABLY REACHED IN NEXT 13WEEKS FROM WEEK STARTING 8/8/11 I.E.MOST PROBABLY UP TO OCTOBER END. 

Now if you can see the chart below you can note that there is one more chart pattern of  DESCENDING TRIANGLE, which was broken down on 12/8/11 (weekly basis)

NIFTY DESCENDING TRIANGLE

 So as explained in chart the target will be 5200-1150=4050 (Height of triangle6350-5200=1150), MOST PROBABLY THIS WILL REACH WITHIN NEXT 20 WEEKS I.E. BY DECEMBER END.

Eventually it looks like at least in next 6-12 months it should reach the above mentioned target, and most probably fill the ELECTION GAP which was created in May 2009.

THE ABOVE TARGET WILL BE VALID TILL NIFTY TRADES BELOW 5200, IF IT STARTS TRADING ABOVE 5200 WE HAVE TO LOOK FOR ALTERNATE VIEW.

Now you must be thinking about what happened to the possibility of new high we have mentioned previously, but kindly note that we have mentioned clearly that----
 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 
        All the three supports mentioned above are eventually broken down, so that view got negated.
The above view of life time high has been mentioned on 26/4/11 in this post http://kolhapuritrader.blogspot.com/2011/04/trding-game-of-probability.html