What Next?

So, Moving Averages is read and done with... I have not received any questions or queries so I take it that you have understood it well. So what do you guys want next? There are so many topics and so many indicators/ osciallators and patterns that I am totally confused what to start now. So this time I will want to know which is the topic that interests you in Technical Analysis. Do let me know through your comments and mails as to what is it that you are interested in reading now. I will try my best to write about it.

As for our trade of 5300 PUT if any of you have entered then I hope you are not disappointed. If you are still in the trade then there are more gains to make. Enjoy.

I have tweeted about Support and Resistance levels for tomorrow and will try to do it everyday. Will wait for your comments before starting next topic.

So Near yet so Far

Today 5300 PUT Option Premium reached 70.20 but yet did not go below 70. I had placed an order in the morning for 70 and then did not get time to check it again. Right now I am not sure whether I should be happy or sad. Given that the US Markets are closed for Independence Day holiday and closing price of 5300 PUT around 75-76 I think we may just about get my target entry tomorrow.

However, with every passing day the probability of a upward spike in NIFTY is waning. Similarly the time remaining for NIFTY to make down move is also reducing and so is our risk.

Have a look at the chart:

If you see the peak made sometimes in Nov 2010; from then it has been a free fall with lower highs and lower lows. This is first rule of finding trend. This continued till around Dec of last year when Market was about 4500 from where it took off to above 5000. Now here Market violated  the earlier High and it went above that. After that came correction but it did not go below earlier low in May-June of this year. From there we are again going up. This picture become a lot clear if you see the weekly chart.

Fibonacci levels for this move are also plotted. Fibonacci is one of my favorite topic and I could discuss that for hours. I am really clueless how I am gonna write about it during Tutorials but it will be very interesting I am sure.

Short term view, markets are stretched above all EMA levels as well as fundamentally not much has changed to warrant this rally (apart from new FM and few positive announcements). Few broker houses have given positive reviews for India equities in recent days but that is it. Nothing has changed fundamentally for World or for India barring probably the sentiment. All in all we should see some correction. Technically I am not able to come up with any indicator which is telling me that the fall is imminent. We are hardly in overbought condition. MACD is not giving any sell signal and even Fibonacci levels are not conclusive.

In such scenario, it is worth thinking that whether we should take one sided call and buy only PUT Option betting for the fall. I probably have to study S&P 500 Index of US more closely as that is the one which affects us more directly. Will have to do a lot deeper analysis but in the meantime will stick to earlier stated position and will buy PUT call if opportunity is there. Though I may reduce the entry point (risk) a bit given the information in this post. Let me know what you think. Happy Trading.

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Trade Post and Comments

Thanks guys for your comments. However I did not mean that you write 'thanks' comments. What I meant and expected is that you guys also contribute to the discussion. Not necessarily by some new information but by way of questions, critical comments. You can also write what do you think about the charts I post. You can also write if you have questions about some particular stock or index. Most importantly you can let me know how do you want this blog to shape up.

Idea is, I am not a professional blogger and I just pen down my thoughts in a haphazard manner. There is no order, no sequence and no one to look at the larger picture. You guys are the observers and you can guide me if something is not right. So write something on that line. I actually never thought, but this blog, if made properly, can be a good starting point for many people. This may not happen overnight or in few weeks but if I continue to write for whatever time I am spending now then may be in a few months or in a years time, this blog can be a good resource for many new starters. You guys can help me in it.

As for the trading post, then Markets did not go up for Euro Summit outcome as everyone believed. I also expected some sort of minor rally at least; before a correction of our liking happens. The time has not run out still. US markets are slightly up as of now and we may see some sort of spike in our market too before we get some retracing.

Today morning I tweeted about 5300 PUT being below 80 (it is updated on blog page automatically). I would have planned an entry around 70 level but sadly it did not come today. I believe we may still get that chance. If not and if you want to open a position quickly, 5200 PUT is also good option. Current level is about 50 and Risk for a lot would be limited to around 2500 Rs. Not bad.

Will write MA post and how to trade with them soon. Happy trading and keep commenting.

I am Back again...

Well, if anything to go by my last post, then I understood that only being back is not enough. It was simply a case of planning too much in advance when I thought that I can write day and night now. I am not going to do that mistake again. I will just say that I will write as much as I can and as much regularly as I can here onward.

Right now, I will just leave you with a picture (worth a thousand words).

NIFTY is approaching upper band and it is already at 200 EMA. Will we see a break on the upper side this time or we will have another down move towards lower channel? That's a question worth potential thousands. Right now I am short of any informed opinion because I liked it or not but have been away from trading for much longer than I would have liked.

However, will surely get back into reading ways (and off course writing) and will let you know what I think in a couple days.

Meanwhile why don't you visit Credit Card Blog and let me know what you think.

Update

I am feeling a lot better. In my last post I forgot to mention that sometimes last week I had managed to buy NIFTY 4700 PUT under 40 (all inclusive). It was a very small contrarian (opposite to majority) move which as I had mentioned I entered for the heck of it. I had this feeling that I will not lose money on it. It is not just gut feeling but the knowledge that there is more pain in the market. Today I exited it at a small profit deciding not to push my luck too far. Needless to say, I squared off without looking at the charts and finding about what is happening in Europe and America. Looking at the US Markets, I am getting the feeling that I hurried into it.

Well, no fun in crying over split milk... Market will be there tomorrow and so will be new trades and new money to be made. Looking at the chart below, it looks like that there will be a short term break at the NIFTY party and we may see some down moves now.

I, personally, am still a fan of the secret society who believes that NIFTY will touch 4700 at least once more. Tricky part is the prediction about the time. With some conviction I would like to say that it will happen before next months series ends. That also reminds me of my recent theory that 2012 (World may not end in it as shown in the painful movie) could be the worst (or at least one of the worst) year for the equities. I will make a separate post on why I think so.

Haven't looked at all the indicators in detail and hence not posting a trade right now but will definitely do that over the weekend and post something. Needless to say that I have been wrong earlier with both; my trades based on charts and also based on my beliefs/theories and I am proud about that. It only shows that I am just a human being; my falling sick also shows that on some other platform but that is now what I am talking here.

Until next post.

Markets this Week

Hi guys, I am back again. For those of you, who don't know, I was not feeling well and was slipping in and out of consciousness for last three days. It all started with the weekend exertion and manifested itself in to a full blown thing which culminated in me being stuck with bed all the time. Much needed rest I guess.

Not that I could have written much even otherwise. Markets continue to be unpredictable (what else was I expecting?) and no clear sign of resuming downtrend still. Yesterday Market formed a Doji indicating some indecision but as I explained on Doji Post on Equity Blog it does not mean much apart from indicating even honors for Bulls and Bears.

Looking at the Asian, European markets today and present state of US Markets I guess we may have a slightly negative opening tomorrow (off course unless US Markets spring a surprise in the later half). Important levels for tomorrow;

Support 1: 5010

Support 2: 4980

Resistance 1: 5062

Resistance 2: 5085

Some Explanation of these levels can be seen here.

Posting a chart indicating these levels. Click on it if you want to see the larger picture (pun intended).

Happy Trading.

Market this Week

The markets did manufacture a good turn around thanks to support from West. The idea of all large Central Banks coming together to loosen their purse strings in tandem is... to be honest... scary. It may help stock markets all over but watch out for commodities as well. May not be a good thing for developing economies which are fighting high inflation.

Anyway, coming back to NIFTY. See the chart below.

Market is clearly trying to get back to the upper end of the channel which lies somewhere over 5300... a long shot I would say. MACD and RSI both are in supportive mood though I have to admit. Today market has taken a support at the 21 day EMA which is at 4938 and the next immediate resistance is somewhere at 5018 which is 50 day EMA for the NIFTY.

I wanted to get in to the Trade with a 4700 PUT today but could not do so in time. Today Europe were down by up to 1% while US was half a percent down when I last checked before going to bed. If markets are in positive territory again, will get a micro PUT trade just for the heck of it.

Hope to have a more definitive trade for the coming week.

Happy Trading till then.

Expiry Tomorrow

What a week (or 10 days) it has been. No, for a change I am not talking about how busy I was. I am talking about the Markets... It just kept falling (it still is) with no end in sight. We are at 4700 today from a level of 5200 in the last week. A drop of 500 points in NIFTY.

Our last week trade of Strangle (5100 PUT/5300 CALL) turned out to be more profitable that I even imagined. Honestly I was also taken aback by the intensity of the move. I expected this drop to be more subtle and thought that it would play out over a longer period... it was not to be.

Anyways, fresh chart of the NIFTY below;

NIFTY right now is delicately balanced at a multi-year, multi-instance support by a margin of 20 odd points. If this long held support is broken then the next support is more than 200 points away and we will be in free fall. I would give more than 50% chance of this happening.

Tomorrow is the Expiry of November series and like it or not your trades will be ending tomorrow. I know, it is difficult to let go of such immensely gaining positions but don't worry we will have more such instances in the future... Amen.

Because of expiry tomorrow and my lack of practice in writing for last few days, will not write much today. Will write about a new Trading Strategy (Spread) and Trades for next week over the weekend.

Happy Trading till then.

Trade for the Week - Analysis

NIFTY 5100 PUT right now is at 120+ which is almost 2-3 times our entry. You may want to book some profit. You can leave 5300 CALL as it is because it is anyway trading at 4. Keep it and you may get a better price (not by much) to exit.

Happy Trading.

Update: Wow, it seems market was just waiting for a sign from me to start their descent. Market just took off (downwards) after I posted. Hope you guys are making merry. Will post some new trading strategy soon.