Monthly Archives: April 2016

Perfect inverted H&S Spotted!

Technical patterns are generally very rare to be spotted perfectly just as a theory definition but i just came across a “Inverted Head and Shoulder” pattern on Aban OffShore’s  weekly and it is just so near to perfect. As you all could make out in the attached graph, stock has given a confirmation close above the neckline, 183, yesterday. If we calculate target from the neckline equal to the distance of Head than it comes out to be approx 256 while stop loss could be kept at right shoulder around 170! Whats the most convincing characteristics in this pattern is Volume confirmation as marked at the bottom of the graph. Though Risk Reward is not much favorable from here but would recommend to go long and wait for my next target once we achieve 256. keep visiting blog for the next update!! Cheers!!!

Nifty back to resistance level on Weekly chart!

One of the best days we got on Nifty but unfortunately we were not able to trade but anyways Markets are not gonna close tomorrow so we shall trade now after some confirmation on the upside. Today after a false breakout trade below 200 day SMA at 7868 in opening minutes, we have closed way above the same showing positive market sentiments. On daily charts we dont have any near term resistance levels as we trading above all of them so we should lookout for the same on Weekly chart as attached. Today we have taken support exactly at the channel line for second consecutive level while resisted too at the same level 7972 which is Fibonacci resistance of last fall.  But looking at the indicators we can be confidence of going long. Though indicators and stock charts are suggesting to go long we must but above that Fibonacci resistance 7972 while the small target could be 8055 which is 50 Weeks SMA. while 200day SMA should act as a Stop loss at 7868

Nifty Showing Signs of Profit Booking

Nifty had a tremendous run through April expiry but finally its showing some signs of profit booking on daily chart. In my last post i recommended to keep trailing stop loss at 7848 and it has been triggered today. After the 4 consecutive close over 200 Day average, Nifty has closed below the same but its just marginally. Constructing Elliot wave on the recent past it seems that we are going to witness some sell-off in coming days upto the range of 7700-7750 which is also coinciding with option support and also has a unfilled gap around 7717. So future traders should exit the position once tomorrow and take a fresh call after some sell-off. Indicators on daily charts  have also given bearish crossover on the chart confirming our short term bearish mood. Though we wont trade for such a small gap down but view is surely of achieved 7750 before expiry.

Inverted H&S on Weekly Chart

Equity charts are representations of trade price of a particular stock and Trade price are arrived after psychological decision of a investor. So in short a psychology of investor can be seen on the charts and its always very much difficult to come out a depression! One of the best example of such psychology was seen on MotherSon Sumi Systems chart were after Volkswagen scandal stock saw some strong sell-off and investors, traders and even speculators were avoiding this counter which was the sign of complete “Depression”. But finally after some consolidation now it seems investors are getting back some confidence on the stocks and even Sales in Europe and America are picking up which gives some future valuations on stock a upbeat and weekly charts have also shown a strong reversal pattern to support a view for a rally. As marked by white dashed line  we have got a Inverted H&S on  the weekly chart with a Neckline at 270 which has been breached and confirmed by a close last week. On the upside we are getting vertical target of 337 which is equal to the distance from the head to neckline. Though their aint any specific rule for stop loss but in this case i would prefer stop loss as right shoulder which is approx 240. I am sure someone would question that we need one more confirmation close for the pattern but looking at the indicators which have given crossover confirmation ,  i would surely recommend to take a risk bit early. So medium term traders just follow levels mentioned in the post while long term investors just accumulate upto 325! 



Are we over with one year Profit Booking?

Today i shall be talking about Nifty charts through a larger scope of horizon which is Weekly charts as some interesting facts have came up. As you all can notice in the chart, Nifty had been trading strictly in downside channel since the life high last March and for the first time in 12 months we have closed above that channel, Hurraaaaay!!! Am sure many of you are pulling up your socks to jump in with some liquidity on Monday but i would say WAIT!!! Though the close is positive on the charts and also the indicators i follow are signalling strength for the rally, we have opponents on other side of the game! The most crucial fear is the 50 WMA crossover 100 WMA as i have marked with a Red Arrow. That’s posing a serious threat for medium term investment as its a surely a Sell Signal.  Secondly, this weeks close has been with a doji which indicates a pause to current trend, though its not necessary that we can see a downside but we have to stay cautious! So Monday’s opening would give more significance to Doji and give some idea whether we are over with one year profit booking? As of now we have resistance as 7927, 8055 while supports are 7868, 7847. So strategy for my traders is to hold longs recommended on 11th April with trailing Stop loss at 7847!!

Nifty close gives a confirmation!

After long time i am posting to you guys but am sure if you guys have followed as per my last post you are having a Gala time at D-Street. On my last post “Tug Of War” i had a recommended a conditional strategy on the index and fortunately we got the breakout on the upside and a buy call was triggered above 7690.  The rally from trigger points has almost burnt fingers of short traders but long traders have enjoyed the move. One of the best confirmation for long term has been achieved today which is that we have closed over 200 Day SMA , 7865, for 3 consecutive sessions which is a condition for ‘Technical Confirmation’ . Indicators on daily  charts are surely in overbought zone but weekly indicators are extremely in positive momentum. So each dip should be regarded as a buying opportunity for long term investors. While traders now can follow trailing SL of 7750 while can book partial profit on upside around 8050.

Tug of War Continues!

Tug of war continues between the bulls and bears! The game has been tough since February but the bulls seems to be getting favorite on traders list! Each try to short markets have burnt fingers in last two weeks. Today when Bears had almost go the rope in their zone, bulls came with the full force and pulled all the short players away in just one hour of trade. Technically, Nifty candles has emerged to show the small downside path which it is following as of now. Indicators on daily charts are still in overbought zone but the weekly indicators are up again supporting upside momentum. Though confirmed Long is above 7750 but stock specific we shall stay long. On the upside we have exactly closed at trend line resistance so opening tomorrow is crucial. Now, on the upside we have strong green line resistance which is at 7777. So now on downside we have trigger support at 7520.

Strategy: Long above 7690 and Short below 7520


Spice up your profits with Spice Jet

Spice jet had been one of the best performer in aviation sector last year with almost 6x returns but the rally was not carried forward to new calendar year and we saw 50% profit booking to that rally in first three months itself. In recent weeks stock was resisting near to 100 day average which was around 68 but since last 3 days we have got close above the same giving us a short term confirmation for the upside. Most importantly while resisting near to 100 day average for 3 times prior gave birth to bullish reversal pattern “Inverted Head and Shoulder” as marked in the graph. Neckline of the pattern is at 67.20 which out to act as stop loss for our trade.

Even cyclically, this is the most promising quarter of each year for airlines. To support my view lets look at the Load factor graph below which says that Months from March-June have always seen passenger traffic growing and Airlines operating at optimum capacity

Load_factor_8th April


So Strategy on Stock is

Buy Positional with tgt of 80 and SL: 67.20

Risk:Reward= 1:2.4

Rd disclaimer on before trading!!

Tit for Tat for bulls

Nifty has confirmed Nifty bank average today which is sell on rise for the short term traders. In my earlier post today i initiated sell call on Nifty Bank but now Nifty charts two have confirmed the other average with Double Top formation. As we all could notice that neckline was around 7590 where markets was taking support since last 4 times. Fortunately that was even the 100 day average which is making my view more stronger. On the side factor, indicators have given bearish crossovers and also the option data is suggesting 7400-7450 range to be achieved once this expiry. So hold your shorts and cover your longs.

Target on Downside: 7450, and if that breaks 7301. Stop loss on upside is 7650

Banks are weakening

Nifty Bank had been on bulls spree rally since start of February but now somewhere daily charts are showing some confirmed sign of weakness for near term. As we all could notice that index was trading in small narrow upside channel which is now breached and confirmed with a close yesterday and day before. Though for a safer side third close confirmation is widely accepted but we can take a risk before todays close as we have got some more signs from other factors. Crucial average of 100 day average has been breached yesterday around 15823 which adds more fuel to the fire of burning long opportunities. Smart traders and FII are already supporting charts which could be seen in their actions in Option segment where Calls have witness writing while near the money PUTS have seen unwinding. Even the indicators on daily charts have flattened and are just emerging over negative crossovers. So time to be cautious for long traders

My recommended strategy for Risk traders.: Sell 16000 CE and buy 15700 PE  tgt: 15150 SL: 15950