Monday, January 2, 2012

The Nifty gets a DOJI

Monday, January 2 saw a DOJI in the Nifty daily chart. The DOJI has come about after a down move with today as the lowest day so far. A DOJI at the lows suggests that bears are getting uncertain. Quite often, the DOJI will become a reversal signal. When this happens, traders can enter almost at the high or low of the trend. But, not each DOJI becomes a reversal. Some of these DOJI’s do nothing.

 

So, what will today’s DOJI show? We should take the context in which the pattern comes. It has come about after a decline, suggesting that sellers may be exhausted for the short term. Today was also an NR7 – narrowest range in 7 days. This pattern represents contraction, suggesting that a big move may be coming soon. This move could be on the upside!

5 comments:

Nitin Chandalia said...

I have been following you through CNBC -tv 18 and found this blog only last week. The DOJI concept is quite interesting.

How would you rate Nifty's chance for a move on the upside beyond 4800 in this series?
Also, does the DOJI signal a reversal in the bearish trend (from a positional trader's view)?

Nitin Chandalia said...

This is a very useful blog Sir.

Two questions:
1. Based on the DOJI and otherwise, do you see Nifty moving past 4800 in this series and where could the expiry be?

2. Does the DOJI suggest reversal of Bear market trend from a positional trader perspective ( e.g. I think the market lows should be in May-Jul period and am short till then)

Tomichan said...

with the west supporting the cause (nr7 and doji), the rally will be a big one at the end of the day. That may break even to 4900 levels within a few days to come back soon into a deeper cut. Sudarshan sir, i have read all your 2008 posts and ur recollection of 2008 jan pre collapse posts. You have to smile now. Congrats. The 2008 indian collapse initially may be owed to high leap of the market recently. Later america take over that place to make it worse. The recent trend, for the last 14 months as you pointed out has 3 legs (i mean causes). At first, the market was at its peak. Then europe gets it under check. At this last face, the ruthless interest rate hike and the resultant (?) weak rupee is holding india down. For the first time in a decade (am i right?) india going down for its own cause. I am sure, the high interest rate will affect profits of companies more or less, sooner or later, ultimauely affecting indias GDP and current defeciet. I think the market and india needs interest rates at 3 to 5 percent lower level to get the trend reversal. Lets hope that march 2012 may see the initial trend. September 30 will have to confirm that trend by clossing above the august 31 high next year. If it happens, the trend will continue for the time being.

Tomichan said...

sudarshan sir,
now news comes that RBI Governor says about reversal of monetary policy and about focusing on growth. Thats the first stone i think.

Abhishek said...

Sir i have been following ur views since 2005 and I do appreciate u a lot. Have gone through u book, i had very high expectation but sorry to say tht i was disappointed. I looked like that u have just copied ur blogs of 2007-08.