Tuesday, September 21, 2010

A DOJI

In the near month contract for Nifty Futures (September), a DOJI has been made today. The DOJI is a bar in which the open and close are roughly equal. Today's DOJI comes after a sustained advance. The Japanese attach great importance to the DOJI. On a DOJI day,the buyers and sellers are equally matched. That is why after a daylong battle, buyers could not push prices up, while sellers could not push prices down. Therefore, the open and close were equal, hence the DOJI.

Why is it significant? So far, the bulls have been in total control of the market. There has been no confusion about the direction. But, on a day when higher highs were made, bulls couldnot push closing prices could not go above the open. Therefopre, there has been a subtle shift in the balance of power from bullish to neutral. Probably, some of the bulls have retreated. This could be just a short term blip. We will see. A close below the DOJI low will confirm that the scenrio is shifting to neuutral. A close above the DOJI high will tell us that the DOJi was just one day of consolidation. Interesting!

3 comments:

ANAS said...

Respected Sir, its me again..

Just dropped in to mention that nifty futures premium of the current month has also narrowed. ..
AND IF THE FUTURES CLOSE BELOW TODAY'S LOWS, THEN THIS COULD MEAN THAT WE MAY PAUSE A LITTLE,, BEFORE GOING UP..

I REQUEST YOU TO KINDLY RECTIFY..

THANK YOU..

Ashish said...

Sir,
with regards to the Certificate Program in TA, it would be difficult for people in regular jobs to attend the same at 4:30 pm. May i request you to please record and maybe market your class teachings so that people like me can listen to them at leisure and learn.
Ashish

Nandita said...

If DOJI is formed after a 10 % rally of NIFTY in few trading session then it indicates exhaustion or Trend Reversal. Good Technical Analyst always spot this thing.

If Markets will correct 3% from here with -Ve sentiment then any Tom, Dic & harry will tell the Trend is reversed.

As a First Line Technical Analyst you should spot this well in ahead.

Thank you very much Sir. I am a great fan of you.