Wednesday, November 30, 2011

Nifty ready for an upmove?

Just as Indian Markets closed, there came a news flash on the TV screen saying China had cut down its CRR for banks. This triggered an immediate rally in Europe as well as in US futures. It seems reasonable to expect Indian markets to open higher tomorrow, probably moving above the 4900 resistance.

A close above 4900 will give targets of 5150 on the Nifty. If this comes about, we will be seeing an intermediate up trend. Momentum will be on the side of buyers. All of this is scenario building, but such scenarios help in making trading plans.

What can go wrong? The nifty rally may stall around 5000, where we have significant resistance. Or, tomorrow may be a one off rally day, after which the market could retreat back inside a trading zone.

How do you trade this big gap up expected tomorrow? I request readers to give their views thriugh comments. Sharing helps everyone.

20 comments:

AK said...

i think if closing above 5030 any day nifty will touch 5130..

Vinod Dhandapani said...

My tech analysis says...
Trend is still down..for the trend to turn up nifty has to close above 5080. A good level to book profit tomorrow would be 4950 - 4975...The trading zone as of now is 4780 to 4975...

suseem said...

a global upmove for sure..but is this the start of monetary easing that will bring a lot of liquidity back to markets?

Kuldeep.rk said...

Dear Sir,
In my opinion first 15 min bar will be deciding factor in case we have a big gap opening. If it opens at higher levels & closes red, we can move the stop (assuming we are carrying short)to high of that bar. & subsequently move it down.For intra day, we can initiate short below that bar, with target = gap distance.
In case first bar is a green bar, we have no option but to reverse position over high of that bar keeping SL below that bar.

indrajit said...

sir can you suggest how to choose a stock by EOD chart which will give Opening Range Breakout 15min next trading.
I.neogi

Anshul The Maniac Finance Kid said...

The 4700 level on the nifty is appearing like the 2500 level increasingly where between October and march 2009,the nifty took support 6 times. Every time the nifty approached 2500 there were talks of 2000,1500 and some even said 800 900 etc but like a rock 2500 stood. This is fourth time 4700 is standing like a rock for the market. Now if 5200 to 5400 goes on upside we can scale all time highs. Also we should see 800 on nifty between 1996 and 2001

Vasant kumar said...

I expect the market to go further high....
1) Dow will break its recent high 12876 than breaking its low, the reason is ...In any steady uptrend a hiccup is possible but the market tries newer levels after hiccup...

EX:Watch out Hindalco in steady uptrend post recession and a hiccup in between 05/04/2010 and 09/09/2010...but after which stock moved further high and tested 250 in Feb 2011....

I have observed this pattern in most of the intraday levels also

So As Dows goes higher rest of the world would move higher...

2) As Sudarshanji always quotes, break below 5600 is a worrying factor for bluechips...yes, at this point market is not ready for down move.

People would have contrary opinions

daytrader said...

Dear sir,
cash nifty on hourly chart has made a bullish H&S pattern with a neckline of 4854,if breakout then pattern target suggest 5053 which is 200Hsma,stop loss 4774 50Hsma.
Now how to trade,
ur 15min rule ,a Ram Ban trade or buying oversold position would be a better option as there is no trend strength.

regards

ur follower

piyush said...

Dear Sir,
to chinese,add central banks reducing swap rates and fed providing dollar liquidity, once again as was after lehman in 08, it looks like a big relief rally is in and after that a big fall as was in end of 08 will occur again.

Bye the way today I was watching the movie TOO BIG TO FAIL on dvd, it was over by 9.30 p.m. and just after that I saw the flash on BLOOMBERG and the your blog, a strange coincidence

Looks like a mystery, but will the history repeat itself!!!!!!!!!!!!

ajith2020 said...

Sir,
I think market will rally but everyone will be cautious in this volatile market condition

srinivas said...

Nifty will have gap up opening, but it should sustain at higher levels, that is the question in my mind? we are in downtrend,nifty is in the range of 4700-4870. from the options data lot of call writing can be seen. On monday nifty gained 160 points but volumes were not up to the mark and open interest also decreased, but yesterday nifty down volumes were higher but open interest increased. This all suggests that at higher levels nifty may not sustain. today also nifty touched intraday high but immedeatley drifted lower. In my view, Nifty may not sustain at higher levels, why because microeconomic and macroeconomic factors not supporting the markets for various reasons. And moreover whatever the action has taken right now, immediately the problem can not be solved, because the problems can not be solved in a single day, all these are long term problems. Whatever the actions taken right now those are necessary steps that has to be taken to solve the problem, it may work or not? So keeping all this in mind traders should take positions.

Balu said...

Sir

For tomorrow buying at around 4920,4930 with a stoploss of close below 4900 by some 15,20 points would be a good idea..

I closed my short positions(at 4733 taken on friday) on monday at 4819 and went long at 4835 with stoploss of close below 4760 and still holding. My first target is 5000. But now I would consider holding it until I see some kind of short term reversal.

But Sir, I really had a very tough time for last 3 sessions.. tomorrow I hope some relief..

Regards
Balu

divyesh said...

As u said, market will open above resistance level, than iwill go long with 4900 S/L & my TGT will be 4990/5033/5074. As retracement from 4/11/11 to 24/11/11 in intraday 5 min chart high to low...& 5033 is 50dema. after crossing 5033 will make s/l of 5033 for long....
thnx for great help to everyone...

Rakesh Shethia said...

Well, I would stay away from trading tomorrow. If the trend were to continue on the up side, the range of local market and behaviour of global markets tomorrow will be very useful to devise the plan for day after. I will wait it out. May be stock specific with low volumes would be my way.

RS said...

Sir,

I have always looked up to your blog to learn about TA and accordingly request you to please explain a bit more on the target 5150. Could you please post a chart with the pattern or if convenient please tell a bit about the pattern so that I can read up more.

Regards
RS

Prashant said...

Selling at open on the huge gap-up day is a strategy. The technicals of this market are still weak. The monthly close was below low ema. After the initial euphoria, technicals will take over. Even if one wants to take long, it would be wise to take longs near 4910. (earlier support area and breakdown point). ORB is a good tool to use on this day.

Technotrader said...

Sir I used Fibonacci retracement from the high of 5395 to the low of 4645 and 50% retracement comes to 5018 so my guess is this is good place to build shorts (as the main trend is down with a stop at around 5060

Bhavin said...

Sir good mng 50Dma is at 5022 still remain resistance for NIFTY so can short nifty by keeping sl above 50Dma.

daytrader said...

dear sir

i think u forget to approve my comments yesterday on the topic
Nifty ready for an upmove?


regards
ur follower

satya said...

sir, how you trade today what was your strategy as you said after large range there is choppy market so what was your opinion and laso please share what set up you implied on trend analyzer please sahre in newsletter. i would be greatful to you if you share the set up for different market as i am newbe in using trend analyzer i know as you mention in news letter that set up for choppy market is LR-8, ZMA-34, TA-In sync (55, 5) set up (Rules for Choppy Market with Small Range).
Setup-: Moving Average 1 – Period – 8, MA Type – Linear Regression, Source – Close.
Moving Average 2 –: Period – 34, MA Type – Zero Lag Exponential, Source – Typical Price

and for other type of market set up used please post.........