Almost all stock markets are showing signs of developing a bullish head and shoulder pattern. This is a pattern that is not ideal, because it has shallow shoulders, but then the markets are not expected to be perfect anyway!
The pattern is revisited everytime the Nifty begins a rally, because that is the time for optimism, and, soon enough, extreme optimism. For the Nifty the neckline comes around 4750 approx. The targets, if the pattern comes about will be 2500 points from the neckline. You can do the math.
Now, these patterns need not fulfill their targets. We had a bearish head and shoulder in the Nifty which has seen a sharp rally and gets cancelled if it trades above 4500 - right shoulder.
In a comment Pi said about wednesday's one sided up move "first a point - today was not a classic trend day - a classic trend would being with a decent size gap, hopefully after a day or two of range bound trading, and would see a smooth uptrend through the day. Today lacked all these characteristics - though the strength of the move was phenomenal, the candlesticks chart looked quite messy, but yes it took supports at the right place and kept breaking past resistances"
I have to differ. A trend day opens at the low and closes at the high with a larger than normal range. (bearish days will open at the high and close at the lows). That's it. We use gaps and prior range bound days to answer the question: Is today likely to be a trend day?". If the day opens with a gap after one or more days of narrow range, then the chances of a trend day increase. But it is not a pre-requirement.
Men has a question about calendr spreads on the mini, which regretfully, I have not understood. Does it mean mini futures or mini options? An example will help.
Sandeep asks: "sir please kindly sugest tradestation or metastock"
My Notes: Both are excellent pieces of software. I have used tradestation for over 12 years for systems development, so I am more comfortable with this one.