There is a random distribution between wins and losses for any given set of variables that define an edge. In other words, based on the past performance of your edge, you may know that out of the next 20 trades, 12 will be winners and 8 will be losers. what you don’t know is the sequence of wins and losses or how much money the market is going to make available on the winning trades. This truth makes trading a probability or numbers game. when you really believe that trading is simply a probability game, concepts like ‘right’ and ‘wrong’ or ‘win’ and ‘lose’ no longer have the same significance. As a result, your expectations will be in harmony with the possibilities.
- Mark Douglas: ‘Trading in the Zone’

Market Update for 19/06/2012


Nifty Hourly Chart

                                                     (Click on the chart to enlarge)

Today's trading session was a disappointing one. Nifty made a gap up open but was unable to sustain at higher levels. Nifty fell sharply after RBI announced its policy to keep the rates unchanged disappointed the street. Interest rate sensitive sectors like Banks, Automobiles , Real Estate and others were hammered down. Nifty closed at 5064 down by 75 points.

In hourly chart Nifty has tested its previous bottom at 5047. Nifty can go down to 5017-5000 levels if it sustains below 5047. On the other hand if it sustains above 5090 we can expect the levels of 5145.

The short term view of the market will be positive until it is above 5000.

Nifty Daily Chart

In today's session Nifty has taken support at trend line at 5041. If Nifty closes below this level that would be first indication of weakness in the market. Further fall can be expected below 5000.

Open Positions

Scrip	Type	Qty	Price	CMP	P/L
Havells	Long	150	545	534	-1650
Bank Nifty Fut	Short	25	9760	9715	1125
Bank Nifty 9800 CE	Long	25	156	131.9	-602

Today's Trade

Scrip	Qty	Buy Price	Sell Price	P/L
Nifty 5200 CE	50	70	15	-2750
Nifty 5100 PE	50	74	105	1550
Bank Nifty Fut	25		9760
Bank Nifty 9800 CE	25		156

 

Nifty Medium Term View

Date	12/06/2012
Initiated at	5116
Reversal if closes above	4880

 

Thought for the day

A man may beat a stock or a group at a certain time, but no man living can beat the stock market! - Jesse Livermore

Market Update for 18/06/2012

Nifty Hourly Chart

                                                      (Click on the chart to enlarge)

Nifty has formed a bullish pattern by achieving higher top and higher bottom. 5048, 5017 are the important support and 5146 is the important resistance. The earlier resistance was at 5124 which was breached in the previous trading session.

On Monday we can expect a gap up or gap down opening as the election result of the Greece will be announced and another important event is RBI policy. So market is expected to be highly volatile. So traders should be cautious in deciding the trades.

Nifty Daily Chart

Nifty has breached the decending trend line and it has once again closed above 200 DMA.Even though Nifty was down on Thursday's trading session the closing was above trend line. So the prevailing uptrend was not disturbed.

MACD is still indicatind uptrend and RSI is at the levles of around 66. So there is some more upside left in the market. Nifty is trading above important moving averages like 20,50 and 200 DMAs. It is also likely to test 100 DMA at 5200. The reversal of Nifty can happen if it closes below 5000.

Nifty Weekly Chart

In weekly chart Nifty has crossed 32.8% retracement level . It has also closed above decending trend line which was drawn by joining 5627-5341. Next target is 5192 and 5295. Aroung 5200 levels short term traders can exit part of the long positions and further profit booking can be done at 5295 i.e 61.8% which is the golden ratio.

Chart of the day

Infosys Ltd

Infy was hammered down after the poor Q4 results. Infy was trading in a narrow range which is between 2523-2290. This process is called base building. From past 4 trading sessions this stock is moving continuously and in the last trading session it has tested the upper pasr of the range. The gap which was formed 2733-2520 can be filled if Infy closes above 2525. So wait for the breakout and buy if Infy closes above Rs.2525 and stoploss will be closing below Rs.2500.Expected target Rs.2560-2600 and above.

Open Positions

Scrip	Type	Qty	Price	CMP	P/L
Havells Ltd	Long	150	545	542	-450
Nifty 5200 CE	Long	50	70	67	-150
Nifty 5100 PE	Long	50	74	80	300

Todays Trade

Scrip	Qty	Buy Price	Sell Price	P/L
Bank Nifty Fut	25	9960	9830	-3250
Bank Nifty 9900 CE	25	230	275	1125

Nifty Medium Term View

Nifty Medium Term Trend	Up
Date of Initiation	12/06/2012
Initiated at	5116
Reversal if closes above	4880

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This view is based on higher time frame and different parameters. Traders should not get confused  with other updates. Thought for the day “We are what our thoughts have made us; so take care about what you think. Words are secondary. Thoughts live; they travel far.” - Swami Vivekananda

Money Management

Money management means how you allocate and manage your capital. It is about how many contracts you do on each particular trade. It is about how and when you take profits or losses.

The most important rule in money management is survival. Because if you do not survive, you cannot continue to play.

It is absolutely essential you always know how to give up on a losing position. No position is worth getting wiped out for, there will always be another trade.

When deciding how many contracts to buy/sell, avoid going above your comfort level. When you are positioned too heavily, it is easy to get frightened out prematurely. Given a choice it is better to be less rich than poor.

Take smaller positions when you are even or a net loser. Take larger position when you have profits.

If you are substantially ahead, take some money out of your account.If you ever become aware that you are stuck in a market and it is hard to take a loss because it too big for you, there is only one intelligent action you can do: JUST GET OUT immediately at market price.

If you get into a losing streak, quit trading for a few days, rest, do something nice for yourself, read a book and resolve tougher. Once you feel you are ready, resume trading as if it is your first trade.

-          Source ‘Intelligent futures trading’ by Chick Goslin

Market update for 15/06/2012

Nifty Hourly Chart

                                                       (Click on the chart to enlarge)

Market lost significantly today because of higher inflation.  May WPI inflation has come in at 7.55% versus 7.23% (MoM). Reality,Capital goods , Banking and Auto mobiles were worst performers in todays session. Nifty has closed at 5054 down by 66 points.

In hourly chart Nifty had formed a formation called 'raising wedge'. This formation can be either continuation or reversal formation. This time it has become a reversal formation.  Today nifty sustained below the wedge indicating the weakness in the short term trend. Now Nifty is expected to test 5020 .

 

Nifty Daily Chart

Nifty has again closed below 200 DMA at 5063. Technically , if index or stock closes above or below 200 DMA we can expect a significant rally. But now Nifty is frequently changing its course . We may get clear direction by Tuesday.

5140 is acting as resistance and 5000 is the support. Nifty is facing too much of resistance at higher levels. It can reach 5200 and above only if there is a major news flow in the form of RBI rate cut or any other news from abroad. Positional shorts can be considered if Nifty closes below 5000.

Chart of the day

 

Tata Motors

Tata Motors has been a major loser in past 2 trading sessions. The market price of Tata Motors has decreased by nearly 7%. In one of the earlier trading session it had tested 200 DMA at Rs.220 and bounced back to Rs.243. Now it is likely to test 200 DMA at Rs.224 again. Rs.224 is the last hope for Tata Motors. If it closes below 224 then we may see the levels of Rs.215-200 in short term.Reversal above Rs.230.

Nifty Medium Term View

Nifty Medium Term Trend	Up
Date	12/06/2012
Initiated at	5116
Reversal if closes above	4880

This view is based on different time frames and parameters. Traders should not get confused with other updates.

Open Position

Scrip	Type	Qty	Price	CMP	P/L
Bank Nifty Fut	Short	25	9830	9820	250
Bank Nifty 9900 CE	Long	25	215	208	-150

Today's Trade

Scrip	Qty	Buy Price	Sell Price	P/L
Tata Motors	500	237	235	-1000
Bata	135	822	830	1080
Nifty 5000 PE	100	63	75	1200
Nifty 5000 PE	50	53	56	150

HNI Column

We had recommended Hindalco at Rs.120.50. So far Hindalco has underperformed the index and it is also likely to continue the same. So we recommend exit call on Hindalco.

Thought for the day

Fear is a habit ; so is self pity , defeat , despair , hopelessness and resignation. We can eliminate all of these negative habits with two simple resolves : I CAN and I WILL.