GOLD --- FOLLOW UP

On 3 June we mentioned that gold has been  given breakout from ascending triangle and it may target 33000. Now let's see what happened ?

If u observe the above chart carefully, you will note that on  7 June gold sold of sharply, but actually it tested the breakout level. And for short term trader retracement  to break out level is good buying opportunity.

To minimize risk short term trader should keep stop loss of daily close below 28750, while medium term investor should keep stop loss of weekly close below 27855.

NOTE :- Since 2004-05 gold had dream run, so this is not right time to invest, since it is in strong uptrend, someone can invest for short period with proper technical analysis and with strict stop loss.

CAUTION :- Even though gold in rupee terms given breakout from ascending triangle.If u observe the chart of gold in dollar terms given below u can realize that, after forming top around $1780 in Feb 12, it is in down trend and trying to take support around $1540. So recent appreciation in gold in rupee terms may be because of rupee depreciation. So take care while trading / buying gold.

 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.

LONG TERM VIEW

It is more than one month from our last post. In last month we were away from market, internet almost for more than 15 days and also due to hectic work schedule it was not possible to update.

Even though we have not updated, in our last post  ( see link http://www.kolhapuritrader.blogspot.in/2012/04/nothing-new-range-bound.html ) we have clearly mentioned that "  (B) FOR DOWN SIDE BREAK OUT
      Daily close below 5183.5 will be first indication that there is possibility of down side.
      Weekly close below 5135.95 will be more confirmatory sign for downside."

Those who have followed these levels mentioned in our last post must have benefited

See what happened actually --- on Friday 4/5/12 it gave daily close below 5183.5, as well as weekly close below 5135.95 which was clear cut indication for exiting long term investments. After that within 10 trading sessions nifty made low of 4788.95 ( on 18/5/12 ).

 THERE IS LONG TERM TREND LINE SUPPORT AS WELL AS 200SMA ON WEEKLY CHART IN THE REGION OF 4800-4850  ( which has all ready given support once ) . AT THE SAME TIME RIGHT NOW TREND ON DAILY, WEEKLY AS WELL AS MONTHLY TIME FRAME IS DOWN SO CHANCES OF BREAKING OF THIS SUPPORT ARE VERY HIGH. BECAUSE OF WHICH TESTING OF  LOW MADE IN DEC 11 ARE VERY HIGH ( 4500- 4600 ZONE )

SO NOW PLAN FOR LONG TERM INVESTMENT --

( A) For high risk investor --- those who can digest 20-30% erosion ( on paper ) in there capital should put 33% of investible  surplus in good diversified equity mutual funds or fundamentally good stocks  at following three levels --- 

        1) 4800-4850

        2) 4400

        3) 3900-4000

( B) For conservative investor --- whenever there is confirmed up trend on weekly charts. Until it happens park your money in short term F.D. or liquid mutual funds.

Those who have acted according to our posts on (1) 24 jan 12 ( possibility of starting new bull market, which actually happened because of weekly close above 27/1/12). So those who invested in good mutual funds on next trading session and exited  according to our post  (2) 29/4/12 once it has given weekly close below 5135.95 9 ( on 4/5/12 so exit should be on next trading session i.e. 7/5/12 ) must have made profit of  3-10%.

 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.

NOTHING NEW --- RANGE BOUND

As shown in above chart NIFTY is trading within the FALLING WEDGE since 22 Feb and unless and untill there is clear cut break out from this wedge there will not be any significant move.

   On 19 Apr there is breakout on daily chart which turned out to be falls breakout since from 23 Apr once again NIFTY is trading within falling wedge.  So unless there is weekly close outside this wedge there will not be any significant move.

   Keep watch on following levels ---
(A) FOR UP SIDE BREAK OUT
      Daily close above 5342.45 will be first indication that there is possibility of upside.
      Weekly close above 5378.75 will be more confirmatory sign for upside.

(B) FOR DOWN SIDE BREAK OUT
      Daily close below 5183.5 will be first indication that there is possibility of down side.
      Weekly close below 5135.95 will be more confirmatory sign for downside.

NOTE :- FALLING WEDGE IS BULLISH PATTERN ( SUGGESTING POSSIBILITY OF UPSIDE). BUT YOU NEVER KNOW SO WAIT FOR CLEAR CUT WEEKLY CLOSING OUTSIDE THE WEDGE.

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.

STILL BULLISH

On 18 APR it has been mentioned that "  INTERMEDIATE TREND is still down. But today on hourly chart it gave breakout above 5306.75, so now if it gives daily close above 5306.75, INTERMEDIATE TREND will also turn up." WHAT HAPPENED - on 19 Apr it closed at 5332.4, Thus ON Thursday 19 Apr INTERMEDIATE TREND also turned up. SO NOW SHORT, INTERMEDIATE AND LONG ALL TIME FRAMES ARE SHOWING UP TREND.

On Friday 20 Apr. whatever may be the reason ( some say it is trading error ) NIFTY FUTURE intraday made low of 5000, because of which many traders/ investors became nervous.( if interested see link http://www.thehindubusinessline.com/markets/stock-markets/article3336580.ece ). Reliance results which declared on Friday after market timing are not according to expectations, macro-economic fundamentals are yet not suggesting possibility of UP TREND. STILL WE ARE OF THE VIEW THAT THERE IS HIGH PROBABILITY OF UP MOVE AND IN NEXT 2-3 MONTHS NIFTY MAY SEE 5700 LEVEL  AND IF FUNDAMENTALS IMPROVE MAY SEE LEVEL OF 6000 OR NEW LIFE TIME HIGH IN NEXT 1 YEAR OR SO. This view is because  we always follow SCREEN/ CHART/ PRICE ACTION, and as of now it is showing possibility of up up move.

we will not discuss detail technical analysis- why we are bullish, since it may look boring to some of readers. Just giving two technical reasons for bullish view.

1)

PIN BAR

 As shown in above chart NIFTY had made pin bar candlestick pattern on weekly chart ( week ending 30/3/12. And this PIN BAR has formed at very significant pivot point ( YEARLY PIVOT POINT OF NIFTY 5112.)
If anyone interested in reading about PIN BAR CANDLESTICK REVERSAL PATTERN VISIT THIS LINK http://www.forextofreedom.com/pin-bar-candlestick-reversal-pattern  

2)

BULLISH ENGULFING

As shown in above chart this week NIFTY had formed BULLISH ENGULFING PATTERN on weekly chart which again suggest possibility of up move.

If anyone interested in reading about BULLISH ENGULFING PATTERN visit this link http://www.candlestickforum.com/PPF/Parameters/16_441_/candlestick.asp

CAUTION : - AS USUAL U NEVER KNOW WHEN MARKET WILL REVERSE ITS DIRECTION, SO KEEP EYE ON 5135 LEVEL, IF NIFTY GIVES WEEKLY CLOSE BELOW 5135 THIS WHOLE VIEW OF LONG TERM UP TREND WILL GET NEGATED AND THERE WILL BE POSSIBILITY OF DOWN SIDE.

 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.