Thursday, October 13, 2011

A dip in an ongoing up trend

Today’s small decline is viewed as a dip in an ongoing uptrend. My line of control for Bulls is at 5000 in Nifty.  While the Nifty remains above 5000, I assume that any decline is a normal correction in what is now an ongoing up move. I obtained 5000 from the hourly chart for the Nifty where the low of 5000 was made before the bullish breakout above the neckline of the pattern. Chart below:

 

nifty60min-oct13-11

 

This pattern is coming inside an uptrend, which itself is part of a correction in an ongoing bear market. It remains anybody’s guess if the pattern will meet its target of 5350. Since, we have to trade on probabilities, I remain a buyer while the Nifty is above 5000.

12 comments:

rohit said...

Sir but what is the dollar now suggesting? because it has hit a support at around 76.75 levels, if it starts bouncing sharply from here the markets will fall once again. Also why are you still calling it a bear market, we have consolidated in this range of 4700-5100 in the last 2 and half months what if we break out then will the bull trend resume? Also what will give you assurance that 4700 is the bottom and bear has ended.

shabsaif said...

You said, After NR7 week (Last week) next week (This week-10-14 Oct)will be big move , and great, it happened, 200+ points (4900-5100+) NIFTY moved.

After this movement , suddenly you put the target of NIFTY 5350, My question is whenever market go up or down , why you assume big target like 5350 or 4000 etc

You said many time in your blog that NIFTY moving in a range 4700-5200, so before any breakup of range you gave Target 5350, and today you said if NIFTY will not go below 5000 than it will go 5350. I am sure if NIFTY will go below 5000, you will put Target 4500 in your Blog.

Rushabh Shastri said...

still greater visiblity is above 5175 nifty only....let market to decide whether it wants to concore that all still in range....RELIANCE has tendancy to breakdown after its result and RELIANCE is still not out of wood...INFY looks overbought so profit booking not rulled out and SO as SBIN looks overbought in short term...

SWEETY said...

Dear sir, With due respect to you i differ with you saying ** ongoing uptrend** -- there is no uptrend until last month's VWAP high is broken and and the daily close should be there above that for few days consistently. As for as Nifty future is concerned 5141 is the VWAP high of Sept 2011. It is now posing stiff resistance. Unless and until that is takenout and daily close sustains above that for few days it is difficult to assume an uptrend is going on. Moreover, monthly low VWAP has been getting brokendown for the last few months and new lows are getting formed. So, I am differing withyou in this point.

Regards

Suresh said...

Sweety has mentioned about VWAP high of 5141 for the month of September. What is a good data source for Nifty VWAP values, such as monthly high, low, weekly VWAP, monthly VWAP etc. Will be very thankful if you could share.

Kuldeep.rk said...

Dear Sir,
Let me thank you for helping ppl like me t understand the nature of trends & your views on Nifty & Other stocks.
I have 1 question on Nifty. With the brk out frm the rectangle on up side, do we consider a formation of double bottom on Nifty Daily & bearish flag failure on weekly charts?

Rgds,
Kuldeep

mridul said...

ys sir the ew suggested that it is cup of 4th corrective and first resistance is 5195 and normally we consider c more than the a means above 5168 but in downtrend the 4th is upward corrective and not the downward so it should never cross 5195 as per rule and the downtrend 5th will set in...but to filter volatility 5220-30 can be considered the upside target max.he rupee weakness also suggests a new low in nifty ..any mistake and rectification of this from your sie awaited

Pi said...

Selecting stocks to trade on long side in uptrends.


As you say - as traders we mostly follow the short & intermediate trends. The short term is up. The intermediate if not yet, should be up. Trades should be on the long side. From here, how does one get to choosing which stocks to trade on the long side.

Earlier I was only a Nifty trader, but I realized over time its a good idea to look at individual names as well, as often in trends, while the major index will consolidate or dip a bit, individual stocks will continue with their moves.

I trade futures. Ideally one would like to trade 3-5 stocks. Question is how does one select which ones to pick up. Does one play breakouts, like in Arvind yesterday, names which haven't moved already (real estate, infra) and might now move that its confirmed that nifty is in an uptrend. Or buy pullbacks in stocks with highest relative strength since the bottom.

Also for determining good entry points on pullbacks, do you use any indicators on the 60mins or 15mins timeframes or just go by the gutfeel?

NEERAJ said...

SIR JI

can you clear for one side trade perfection either long or short
subject to trend

rohit said...

Sir what is your opinion about the Occupy Wall-street protests? Which event of history can you relate it to? Has something of this sort happened in the past? Also everyone knew that the Rapidly rising gap between the rich and poor is going to result in a revolution one day which is happening now, the common man all over the world is full of angst, what will all this lead to? What effect will it have on asset prices? I feel it will be bad for the financial sector as a whole for the next many years.

sudhin said...

A dip in your updates also Sir.

RS said...

Sir,

Why have u stopped updating ur blog. I am sure that the kind of experience u have.....some idiotic comments (if that's the case)....can't fluster ur calmness.

Please keep updating the blog....it teaches novices like us a lot of tips n tricks

Regards
RS