Wednesday, February 22, 2012

Start of a Correction

Today’s sharp decline in the Nifty saw the Index move below 5545. The 5545 level was an earlier swing low on shorter time frames. When the market breaks below a swing point (high or low), it is giving a message. When lows are broken, the charts begin a process of lower lows, and, eventually, lower highs. This is not bullish.

Therefore, once 5545 was taken out, all short term positions should be closed. Aggressive traders should take short positions.

What may have began is a correction of the up move. At this point, it is difficult to say the extent of the decline. Much easier is to identify the support levels – 5400.

Corrections are counter trend movements, therefore, they are difficult to trade. Short term traders should go with the flow, it is on the downside, but have modest expectations since these declines can be mixed with choppy movements.

9 comments:

Technotrader said...

Sir few days back I have posted a comment on Gaps and guessed that there is Exhaustion gap at the top which seems to be right. I wish to have your expert opinion on this subject as it will help us to know better about the gaps on Nifty chart i.e the up move from Dec end to 21.2.2012
Thanks in advance

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Krishna said...

Nifty is trading above 200 MA.

Is it not a good strategy to buy in delivery at all dips till 200 MA is intact ?

Can we not make money by just simply following 200 MA ?

Why to predict ?

Why not to follow ??

As & when 200 MA is broken down, one should quit all longs in all modes !

Wish I cud post the chart here !!

Regards

Dinesh Rishi said...

Sir

Thanks for the update,

pranav.kulkarni said...

Dear Sir,
At one point, today, nifty fut was enjoying premium of around 50 points. Is there any relation between nifty fut and nifty spot????
Thanks n regards
Pranav

Poonam said...

Hi Sir,

Thanks so much for all your posts. I find them very useful.

After reading about ORB trades here, I practiced them 2-3 times on paper before actually using them and then finally used in today's market and booked decent profits.

One query here, Today Nifty spot closed at 5429 whereas the March Future closed at 5485. So there is a premium of 50 plus points. How should we read these differences and what are its significance.

Regards,
Poonam

Rushabh Shastri said...

After ADAG it should be PROVOGUE-STRTECH : BUY RIGHT-SEAT TIGHT

DHIMAN said...

Sir
You are my capital markets idol. I have been following ur advice on CNBC @ 8.15 AM on a regular basis. Now I want to be a member of your paid service S2 Analytics. I work in a bank. I invest in Cash Market on a short term basis. Can you please guide me which service will be appropriate for me?
DHIMAN , KOLKATA dhimanguha@yahoo.co.uk

Krishna said...

Dear Sir

If one is interested to take TA as professional carrier, what are the eligibility criteria ?

I think NSE is not a regulatory body so NCFM etc do not authenticate to provide TA services legally.

SEBI issue time bound approvals for PMS if certain norms are fulfilled but what are the norms to become a professional TA?

Which is the regulatory body to authenticate & certify TA in legal manner?

Please share & guide.

Regards