Wednesday, October 21, 2009

The Nifty with Guppy MMA

The Guppy MMA is a set of moving averages created by Daryl Guppy. [Please do a web search to get more information about him and the MMA]

Briefly, there are two sets of averages, blue and red. When both the sets are moving up, the trend is up. At periodic intervals, the blue (short term) will dip into the red where it finds support. So far as the support holds, the trend is UP.

I am giving the daily chart for the Nifty with both the averages. What I understand is this:

1. The red lines are pointing up, trend is up.
2. A dip into the red set is due. The blue lines are contracting.
3. When the red lines are widespread , there is a strong trend. This is the case now.

Comments are welcome.


saket said...

hello sudarshan sir,i have got three queries.
1.Stoplosses for buying on dips
you have often suggested of buying on dips when a stock is in an uptrend but what can be the suppose i want to buy infosys since it is in an uptrend and has corrected from 2400 odd to 2166 has started consolidating at these levels.what can be a tentative stop 2160 or something else.

2.well i heard u today speaking about cairn being a great investment and can be a multibagger in next few years i had looked at its charts but didnt quite understand the reason behind u r hypothesis if u can illustrate with the help of charts what made express such an opinion .

3.when we are talking about investments or 2-3yrs do we look at weekly charts

men said...

Is it right to buy on dips now or is it different this time. A 38% retracement of the recent low to high is around 4870.

sunny said...

why so confusing set up, If price is above 50sma, long term trend up, if adx green line is up, red down, and price abv 20 sma short term trend up. Talking abt GUPPY, naam se hi nahi kaam se bhi GUPPY hai, read him tens of times on moneycontrol.If nifty goes 100-200 up he gives 1000-1500 pts tgt, if goes down 100-150, same person gives 1000-1500 pts lower tgt next week.


Namaste to Sudarshan ji and all readers of his blog.
I have a query which might seem silly nad strange at first but is of great relevance to day traders who scalp. Does anyone know a broker who allows simultaneous placement of two stop loss ordersone contingent upon the other?. Suppose the nifty is currently at 5125. My analysis reveals that one should buy at 5150 with a stoploss at 5148.Now to execute the first leg we have to place a stop loss buy order with a trigger price of 5150 and a market price of 0. This leg of order placing has no hassles. However the problem arises in the placement of the stop loss order as it is very nearby. It may happen in volatile market conditions that the nifty hits 5150 and immediately falls 5-10 points giving us no time no time to place the stop loss order. The partial solution which I have found is to place the first order and then ready the second order but not place it. As soon as the first order gets executed release the second order with the press of the button. This technique works most of the time but fails in times of extreme volatility. This problem can be overcome if the broker provides a facility wherein the system accepts the two orders with the first order being immediately released and the second order being released as soon as the first order being executed. Im sure that someone has the solution to my problem. The other day Sudarshan ji replied brilliantly to one of my queries. I know Im being greedy but I request all readers and especially Sudarshan ji to reply to this problem. I will be grateful as a relatively new trader learning from champions like the autor of this wonderful
Thanks in advance

men said...

With the expiry coming, could you help by interpreting the OI. Thanking you.

saumil said...

Dear sudarshanji,

I am new to market, had invested when the market was at all time highs & burnt my fingures.
could you please advice me on shares to buy.just give me advice on few shares which you think is a good long term bet.

Many times i listen to your comments & have seen that out of the all analysts whos interviews come on cnbc you give practical & right advice to many of us.

Thanks in Advance...
saumil shah