Monday, December 19, 2011

Nifty continues in a downtrend

This blog has been fairly consistent in calling the currently ongoing bear market. Once, 5200 broke down on November 15, a trading range breakdown was confirmed. Since then, the trend has been down. There have been a few rallies, but these are more in the nature of random movements which occur in any trend.

The previous low of 4640  was expected to offer only minor resistance. On Friday, December 16, we saw this previous low broken with ease, and the Nifty closed at 25 month lows.

 

The message is this: Just as new highs are bullish, new lows are bearish. The Market is making new lows which is bearish. A pattern target of 4000 is available, using the recent price action. (A head and shoulder has broken down. Chart not shown today, I will try to post it later).

 

Worries: From 4600 to 4000 is not a difficult travel. It is just 600 points. We have already fallen from 5200 on November 15 to 4600 – 600 points in a month. So, we understand that another round of selling can take us to 4000 or close by. The worries are elsewhere. Are we looking at levels lower than 4000? Any number of stocks are showing long term breakdowns on their monthly charts. Quite possibly, I am wrong in my interpretation. But, as traders we should be open to the basic fact: The markets can do anything.

7 comments:

Akash said...

Hi, Sir My Intraday Nifty Trader ? How Much Point Sl In Nifty ? Sir ,, On Friday After Rbi Policy , I am Shut Nifty At 4791 , And My Sl 4830 ,{40 point} But Sl Trigger ,nifty not cross day high 4833, And After Nifty Fall 4624, ,Guide Me Sir,

Sethu said...

Since 2012 end is approaching, take a yearly view.
4550 is a good support level 50% FIB support level.it also coicides with previous low of 4538. There is a good probability that there is a rally from this level.but untill nifty crosses 4758 trend is down.

Sethu said...

4500-4550 is also a good support level and attractive from the point of view of long term investors.

Sethu said...

FY 2013 p/e does not justify trading below a 2 year low 4538.Lest see markets can do anything.

Divyansh Gupta said...

Given the massive fall in the index during the past 3-4 days, and the expiry approaching, it would be a bad idea to take a contrarian view from 23rd onwards for the short covering rally

Vasant kumar said...

Hi Ramprasad, follow trailing stoploss, when u r in a gain of 20+ pts.

Since I cant show u any chart, I cant tel u hw to keep stop losses...

But, u can use basic method as followed by many traders...1:2 or 2:1...1/2 of ur profit target or 2 times of ur profit target, depending on ur risk appetite.


Sudarshan sir - Please keep posting on the blog as we daily check if u have posted anything on the blog

Now, coming to Nifty trend...I will come with DOW trend....I dont know wht is the thing but There was a huge volume on Friday 16th, DEC, 2011. and I assumed a significant direction on either ways...Now today, 19.12.11 it confirmed a downward trend.. Howoever, if nifty breaks ur target levels of 4000-3900 ...if it will take 3-4 years to cross 5555 again.... kindly check with the historical charts of SUZLON, PUNJLLOYD, DLF, Logixmicro, Archidply and many others...if goes significantly down, they dont move up easily without a strong base of 3-4 years...Why I have taken High beta stocks as examples is NIFTY is the most volatile stock in Global stocks ( I have considered Nifty as a stock in Global bunch of stocks)

daytrader said...

dear Sir

congrats , now ur book is in market ,have just ordered it ,

many many congrats sir ,


also request to review or give ur comments and thoughts on taylor trading ,most of the time on cnbc u discuss ur short term view on nifty which would b used as a daytrade or swing trade ,

as u written ur comments on 3 period RSi from linda's book in past .

because many times its tuff to understand and having a view of
a buy ,sell or short day.
request u 2 discuss ,

regards
ur follower