Haven’t talked about Nifty chart since few days but was trying to study charts from different angles and now i have came across some crucial outputs from my study this weekend. As i had talked about a weekly channel breakout last week, we have almost confirmed with second close on Friday but it closed with a nervous feeling. As you all can notice the candle, it has just closed above the channel and its not at all convincing for the long traders. This makes next week trading quite crucial. Most crucial would be opening tomorrow which can almost confirm near future’s trade. If the opening is above 7896 (which is lil bit doubtful) than positive momentum should continue on index but if the open is below or at 7825 (which is likely) than we may continue to witness profit booking as we saw in last two sessions. But as long term charts are still positive as shown by the indicator, profit booking, if any, shall take support at 7700 which is 100 Weekly EMA and also option markets have witnessed too much writing on that strike price PUTS.
Now we talk about Daily chart time frame, then we have closed with a Doji which also states that opening could decide the trend. Indicators are in overbought zone on daily charts so may be a little risk of profit booking stays but it too has 7700 as support zone so there aint much downside for the traders.
Strategy: Buy on Dips with SL of 7700 tgts 7970/8055
Crude as an asset class worldwide has been seen as a prime suspect for the last years sell off in Equity markets but now its time to rethink on our view. There has been crucial cold war in Crude production between US, OPEC and Russia since start of 2015 which has resulted in glut in crude market but recent news are sign of something positive coming in the future. Iran has been in focus as they are trying to regain market share in crude production since the sanction lift in last year. But i don’t think there are much worries on production side ahead as OPEC countries including Iran has reached 90% production of the capacity in April as per Bloomberg data source. Total capacity of OPEC is 36657000 barrels/day and they produced 33217000 barrels/day in April. So now there are no chance of any further rise of production. So to sum this up, if they aint any freeze in output in meeting on June 2 then there is not even room to produce more which means output should remain at this level atleast. And most importantly, Russia might join June meeting and there could be a common decision to freeze output which was long awaited support
Even monthly chart of WTI Crude is showing some sign to support Crude output freeze in June. As its always said charts are first to show signs of reversals, this time also it could be true. Monthly charts of WTI as attached are showing that commodity has approached resistance line of the channel and there are full chances to break this downtrend which has been intact since December 2014. To support resistance channel breakout we have other factors too. Blue arrow marked shows positive divergence of Crude price in recent months with RSI giving a strong feel of crude getting back to post $50 mark. But before reaching out crucial levels on upside, we have a strong resistance level at $47. That level has been pivot before a thrust sell-off last year below the same. Secondly, it is exactly the level which will be considered as breakout level of the channel. Thirdly, Volume since recent lows have increased which is confirming that crude prices are bottoming out. And finally its also the SAR resistance mark. So overall my view on Crude is positive from the level above $47 and target on the upside would be next resistance level of $62 which is 200 Monthly average.
Recommendation: Buy WTI Crude above $47 with tgt $62 and stop loss: $41.80
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!!!
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 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.
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!
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 Aprilwith trailing Stop loss at 7847!!
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 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.
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
So Strategy on Stock is
Buy Positional with tgt of 80 and SL: 67.20
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