Sunday, June 7, 2009

Three days After

Well, these three days mean the gap between my last post and this one. Usually I write every day, so this has been an unusual gap. No big reason - the market was choppy on Friday, then we have this weekend, so whatever we share could wait till Sunday. Sorry about the delay!

For five days now (all of the past week), the Nifty has been moving inside a range between 4500 to 4600. This range is defined by the real bodies for each day, the range between the open and the close. If the Nifty were to close above 4600 on Monday, this will be a sign of breakout from the trading range. An easy strategy is to buy the Nifty at the close and exit on a move above 4700 which is the target on such a breakout.

The Nifty faces significant resistance in the larger 4500 - 5200 zone. I assume that the strong momentum seen in the past few weeks will now reduce and stocks will be much more rangebound, even if the Nifty were to slowly move up.

A longer picture

The 30 week moving average is roughly equal to the 200 day MA. The weekly average is preferred because a weekly chart allows me to view more data. I applied the 30 period MA to the Nifty weekly chart. The difference between the closing price and the MA is around +1500, meaning the price is about 1500 points higher than the average. Once earlier when the Nifty touched a difference of 1500, it went into a trading range for many weeks wgich was an intermediate top. Have a look at the chart here.


Krishna said...

I wish to learn technical analysis,would like to know if you conduct courses/seminars or else i request you to please suggest an institution where i can learn the same..your suggestion will be very significant for me to decide...


Manu said...

hi i would like to know where u are connected with site techinical so i can invest my money there

anshul said...

thanx for ur valueable analysis abt nifty......i want to ask how u started trading?...iam sure u may have had good and bad days in trading too.... on which point u felt that trading is ur life....plzz share with us ur story of trading life and how u reached cnbc expert pannel...i am sure lots of people r interested to know abt it....


Good see ur post after 3 days.Your analysis for next week is very good.
Thank u for the post.

Tushar said...

I want to ask a question and it's really very important.
I am using eod charts and the trend is UP, but the various daily oscillators are giving Sell signal. one for e.g. is Stochastic is overbought and so on.
If I am a day-trader how should I read these signals.
Should I buy because trend is Up or should I short because oscillators are giving sell signals and divergences.
Exactly how should I read this as a day trader?
It's confusing isn't it?

anibhai said...

very good chart. thank you Mr Sukhani
This chart looks like the market has started to turn from a bear market to bull market as described in Stan Weinstein's Secrets For Profiting in Bull and Bear Markets due to following reasons -
1.30 week ma have started to turn up
2.breakout with good consolidation on big volumes

now next step should be a pullback towards the breakout point on low

that would be a good entry point for long term traders/investors

what do you say?


wildeazoscar said...

What is the way to send you a few charts that you may find interesting?

For example, i have found really interesting formations in
1. Nifty against NH-NL( both daily and weekly)
2.Nifty against AD Line and 10 SMA TRIN(all NSE Stocks)
3.MACD and RSI of stocks of NSE above their 50 EMA(daily)
4.MACD and RSI of stocks of NSE above their 200 EMA(daily)
5.NIFTY and its PE ratio (Weekly)
7.Nifty against FII, DII and Combined Institutional Equity Holdings

Perhaps, they give a clearer picture of the days to come

Yogi said...


I have been following your blog for a while now. I have a ques (off track though). I think, you are the best resource known to me to answer.

I bet on divergence as a tool for trading nifty. Apart from trading, I also invest in mutual funds. Now my question is, can we use divergence as an opportunity to switching funds(debt to equity and vice versa) in a mutual fund based on its NAV?
We know that nifty has fixed(though it can be changed as in case of Satyam, lately) companies listed in its composition and so is their Market Cap. However, in a MF, fund manager chooses/changes companies and their cap for his fund. In a senario like this, can divergence still be a good tool to jugde and switch fund?

Maybe answer to this question is very simple and can be just Yes or No.But, I still bother to ask as I am confused.

I 'd appreciate, if you can please answer this for me.

Yogesh Tiwari

A Student for Life, of Life (and of Markets) said...

Dear Sir,

a longer picture sometimes gives a lot of comfort especially to those who think they missed a life time opportunity of buying at 3400!!!

I analysed weekly charts of last eighteen months, and realized that even if you missed selling in Jan 2008, the slow stochastic gave you two more selling signals in early May and in early September 2008.
My analysis can be seen here.

So to the investor feeling sad to have missed an opportunity, cheer up. As Sudarshanji said many times, be patient and there will be a chance to buy again.

Of course the market does what it does, but how I love reading these charts.

gurvi said...

Hello Sudarshan ji,

Can you please publish your weekly appearance on CNBC-English & CNBC Awaz.


saket said...

sir what is the procedure of becoming a member of ata the site recommends only the form is there any fee,how are we supposed to send the fee.please give details.thank you