Until Thursday close i was sure about Nifty strategy of buying on dips but friday’s volatile session had ended up everyone in confusion. But as i mentioned on that day, we should still be bias on Buying on dips and today’s close has cleared all confusion on Nifty index. As you all can notice in graph, we have close above 200 day SMA which was at 7777 which gives us a confirmation for the rally ahead. Secondly, we have close above 7836 which was the resistance line on Weekly chart adding booster to Bull ride. Now talking further on Elliot wave, it is almost confirmed that we have started a 3rd Wave of minor degree but still could be the fastest and one of the good rally in near future. Though indicators are almost nearing overbought zone on daily chart, but we still have chances to move ahead. So strategy is simple to hold longs on Nifty with targets of 7909,8055 SL: 7690
Today was ought to be Decider between Bulls and Bears on Nifty but it ended with confusion with almost No change today. Technically as i mentioned 7690 was crucial zone and we did trade for fractions of seconds but as i always mention, what counts is closing. On other side 200 day SMA resistance which was at 7777 didnt trigger at all today. As we havent got close outside our range, Nifty can be interpreted as confusing close. Tried to apply Elliot wave, there are 3 possible targets for this short term profit booking: 7694,7629,7543. Already today we have achieved first target so there are chances of reversal from here, but as i said they are just chances. Its very difficult to answer exact bottom but still we can play the game. As marked in Yellow square, its the best buy zone for short term traders. So now strategy remains the same of buying on dips, if at all we see trading below 7694 again on monday or else if we trade above 7777 then just go long.
Nifty has been trading in strict range of trade since last few sessions and volatility has ended traders into confused zone. But now tomorrow is a D-Day for the Nifty deciding May expiry future. As we all can mark in the attached chart, Index has been taking support at 7690 level which is trend line support of the line stretched by connecting Highs of Nifty since 9119. Line had been acting as a strong resistance prior to recent rally for almost one year but now, as it is said, it has changed its role to support line. On the upside 200 day SMA which is now at 7777 is acting as strong resistance and bulls are finding it difficult to catch up momentum above the same level. Indicators on Daily charts are in middle of the road so all depends on the range breakout tomorrow. Looking at Open Interest, 7700 Puts is still witnessing write-off which makes us little biased in favor of bull but on other side Banking stocks are not supporting small rallies during intraday. So all confusion has ended up the day with a Doji today, making it D-Day for Nifty Tomorrow. Fingers Crossed!!!
Tata Motors have been most under-performing stock in Auto Industry in recent past but now its time be the out-performer in coming months. Stock has tested sub 300 levels twice last year and while testing so it has created a Double bottom pattern on weekly charts of the stock. Have outlined Double bottom pattern on the adjoining chart, though it is not perfect text book pattern but it is too close to the same. Neckline which is defined or known as Breakout line is a 425 and we are approaching the same which would trigger a sure buy for medium term traders. Indicators have confirmed momentum crossover which confirmed positive divergence which is also marked with white line. Still we have to confirm 100 weeks average which is at 442 but i would rather recommend to trade on breakout of Double bottom pattern at 425. Target would be equal to the distance between Two lows and Neckline , calculated from the neckline.
So recommended target above 425 would be approx 555 with Stop loss 385.
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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
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.
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!!
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.