Saturday, July 10, 2010

Moving Average studies on the Nifty

If you want to know about the death cross then:

Learn what the death cross is and how you can construct it and use it in your own trading.

"The "death cross": What it is and how to trade it"

Arvind Sahu, our susbcriber and chart reader, wrote to me:
thanks for your update in daily newsletter for article "death cross". what i understood, i showed in chart. DJIA index has crossed death cross. which may hold true as according to fibonacci ret. its resistance lavel is at 10100 to 10230. and is in resistance zone presently. now 50 MA has death crossed 200 MA which means DJIA index may fall once again. third study of elliot wave also suggest that DJIA index is at wave 2, on first sign of weakness entering into this level could be advisble to play for wave 3 to wave 5.

now as indian market also follow the Americans. But the picture is not clear in nifty yet. as all the MA ie. (50 MA, 127MA and 200 MA) are nearing (approching) each other. if DJIA index falls, very little work for 50MA in nifty require to cross 200 MA.

please comment
unquote
 
The two charts are given below. Readers should please comment.
 


6 comments:

kk said...

RESPECTED SIR
IN THE LAST TWO WEEKS , EVERYBODY HAS A NEW WALL OF WORRY, IT'S NAME SIGNIFIES THAT "THE DEATH CROSS".

SOME DAYS BACK, YOU WROTE ABOUT HEAD & SHOULDER BREAKOUTS TOO.

SIR MY VIEW IS THAT , IF WE PULL OUT DOW JONES CHART FROM 1999 TO 2002 ,ONE CAN FIND AS MANY "DEATH CROSSES" AND "HEAD & SHOULDERS" AS ONE WANTS.
IN FACT WE ARE ALL SO MUCH FEAR STRICKEN THAT WE ACTUALLY DON'T WANT THE MARKETS TO MOVE UP. LIKE THAT OF 2007, WHERE WE DON'T WANT MARKETS TO GO DOWN.
MY GUT FEELING IS THAT, DOW WILL BE IN A RANGE OF 9000 TO 12000 FOR THE NEXT 3-4 YEARS.
LET'S SEE , MARKETS HAVE THEIR NATURE OF INSULTING EVERYONE.

Prasanna Khemariya said...

Dear Sir ,
On lighter note .

Latest off Futta ground...
By Bloomberg News
July 8 (Bloomberg) -- Top US investment bank Goldman Sachs is said to be bidding US$4m a yr's package for the oracle octopus Paul to head up its proprietary trading book. Goldman will convert part of its trading floor into a fish tank for Paul and put boxes of different markets, stocks, indices, equities and bonds for Paul to chose from. ?Hopefully this will translate into a more profitable prop business for them. Paul will also work closely with Head of Global Strategy and recommends him asset allocation strategy. Also heard from a reliable source this morning that Merrill Lynch are bidding Paul to replace their entire research team. Will be interesting to see where Paul ends up .....

Sunil Malhotra said...

Can we use Death Cross a downtrend for individual stocks. Like Tata Steel has made a death cross on 16th June, but still it is hovering arround this price.

Jitender Madan said...

My view---As for Dow Jones concern, one should have gone long once it pulled back above the neckline of head and shoulder with stoploss below neckline for targets towards 50 DMA and may close position there or gauze the strength so as to exit longs or continue to hold. Those holding short at upper level should hold till 50 DMA and look for possible continuation of downtrend. once prices are closed above 50DMA in DJI--short trades should be closed, as it may give intense short covering rally in Dow Jones due to short squeezing.

Nifty is trading in a range for few months, and thats why DMAs are close together. 50 DMA crossing flat 200 DMA on downside--may not have severe trigger of downside in NIFTY. it also depends where are prices when 50 DMA crosses 200 DMA on downside. Now all DMAs are properly aligned (lower first to higher last)--so one should not get excessively predetermined and look for potential of death cross in Nifty, which may not occur in recent time. Right now time is of long trades. Go with what is visible picture right now.

Jitender Madan said...

right now everybody seems to be looking for 5400 on nifty. Nifty is trading in a channel and beyond 5400--target to look is 5530 something. Everybody is probably looking for this thing on nifty chart.

previous high in this channel was at 5399.65 and before that high was 5310.85. Recent high is of 5366.75. Now if Nifty fails to take out 5400 on upside--will this be classified as formation of Head and shoulder on nifty???

rajv malik said...

sukhani ji i am grateful to you for the great knowledge that you impart through your post time to time.

kk, you made a sweeping remark that market has a nature of insulting everyone. when you say everyone, you mean market is friend of none. or you mean at some point or other market may insult everyone, albeit one by one.......regards