Thursday, April 11, 2013

Follow Your Charts

The next meeting of The Association of Technical Analysts, will be held on Saturday, April 13 at New Delhi. Topic is: Derivatives - Synergy with Technical Analysis. IF you live in the NCR, do consider attending. Full details are available here.

The Nifty has been moving around the 5500 - 5550 range for the past five days. I have discussed on TV, the strong support offered by this trading range. There were repeated close below the range, suggesting that the support is not holding. Finally, on Wednesday, April 10, the Nifty made a DOJI, first dipping well below 5500 and then recovering to close at 5550, at the top of the day's range. In the afternoon, around 5545, I suggested buying the Nifty with a stop below 5500.

The reason for the buy was a favorable risk reward as well as the sign that 5500 is holding inspite of the choppiness that we have seen.

As with all trades, there is no assurance that this one will work out. Our trades work on probability. The outcome of a group of trades is likely to be positive. Results of individual trades, cannot and should not be predicted.

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