Market Outlook

I am here again and wanted to write a tutorial before this post. Have started writing it and it should be online for you tomorrow or day after. In the meantime, in this post, I thought of taking stock of our Market and see if any trade exist for coming week. Hope you will like it.

So without wasting any time, let us see the NIFTY chart.

As you can see in the weekly chart above, NIFTY has erased the gains of previous three weeks in the past week alone. It is very frustrating for investors who see values of their picks going up inch by inch and then all of a sudden everything comes crashing down. But it was always on the cards. Right now also as you can see for NIFTY to maintain its bullish momentum the critical level is 5100 as depicted by horizontal line of low of July second week. So we may not be completely out of woods as yet.

This same support is around 5050 on daily level. See below;

RSI is not indicating any oversold condition at all and even MACD (which you will see soon in a tutorial post) is not indicating any reversal. We may not have any respite from downtrend immediately.

I was thinking of making a Straddle or Strangle or Spread trade suggestion but am seriously short of time to work it out. Have to seriously make an automatic excel based worksheet to do the calculations based on the NSE quotes exported or updated directly into it. Will take some doing but it will be a wonderful tool to help us decide things much faster. I had something similar before but it was too crude. Have to make a professional version of it. Will let you know as and when it is done and will also share it with you guys.

Right now, for trade, my thinking is like this. I expect some kind of (at least temporary) up-move on daily or intra-day basis and if I want to trade for a week, I will short the markets tomorrow (if) after they go up. Am expecting markets to maintain downtrend on weekly basis and hence expecting to square off this trade during the week sometimes.

However if I want to keep the trade till end of the series then I would like to think of markets getting back to positive territory after falling for a week or two. This is with the assumption that markets will not violate earlier low as seen above. So I would like to go long sometimes during this week or next for a trade which I want to keep till end or close to end of current series. I hope to get in around 5100 or 5050 level but I will keep position short with some serious stop-loss.

Once again, I will remind you that this blog is not intended as an investment advice for you. It is just my loud thinking about what I expect in the markets. Follow it at your own peril.

Then there is a dearth of comments from you guys. Please let me know what you think of the posts and what would you like to see my writing. It helps surely. Will be back soon with MACD. Happy Trading.