Market update for 06/08/2012

 

Nifty hourly chart

On Friday Nifty made a gap down open but took support at 50 HMA which is at 5170. Nifty shut shop at 5215 down by 12 points.  It is still in the narrow trading range of 5160-5250.If Nifty breaks above 5250 then the target is 5300. 

 

Nifty Daily Chart

From past 4 trading sessions Nifty is consolidating. 5160-5130 is very important support levels for Nifty and unless these levels are broken sustainable downtrend cannot be expected. MACD on daily chart is indicating  buy and 5300 looks like an achievable target. If Nifty reaches 5300 don't be in a state of euphoria but book partial profit as it is a strong resistance level. You can re enter above 5300 and expected targets are 5350-5400.

Nifty Weekly Chart

Last week Nifty tested 5085 which is 50WMA and bounced back. This trend is likely to continue till 5300.

Chart of the day

Bombay Dyeing

Bombay Dyeing was in down trend from past one month. It made a low of Rs. 478 and bounced back to Rs.506. It has managed to sustain above the descending channel and now this channel is acting as support.On Friday is made a low of Rs.494 which is nothing but upper part of the channel. This company also has strong support at Rs. 490 . The  correction seems to be over and now it is expected to start a new uptrend.

Open Positions

Scrip	Type	Price	CMP	P/L
SBI	Long	2015	2005	-10
Bombay Dyeing	Long	504	500	-4

Today's Trade

Scrip	Buy Price	Sell Price	P/L
Tata Mot 220 PE	7.5	9.5	2
Bombay Dyeing	504
Rel Infra	506	504	-2

Nifty Medium Term Trend

Trend	Down
Initiation Date	26/07/2012
Initiated at	5043
Low since change	5043
Reversal if closes above	5285

Thought for the day

Trading isn’t love. Stocks don’t love you back. They don’t even know you own them. Falling in love with a stock may not hurt you; it may kill you. That’s why you have stops or other forms of risk control – such as diversification, asset allocation, options, and hedging.

 

Accept Losses

One of the most important quality of a successful trader is the ability to accept losses and to take them promptly. Perhaps the single greatest downfall of all traders is the inability to take a loss when it should be taken. Losses have a nasty habit of becoming worse rather better. Unless they are taken when they should be , the results will not be to your liking.

Although it is easier on one hand for a day trader to take loss than a positional trader (since a loss must be accepted by the end of the trading day ) , it is still the downfall of many futures traders who are unwilling to accept the loss when it is a reasonable one. The good futures trader must have the ability to take a loss when the time to take that loss is right. What’s right is dictated by particular trading system or  risk management technique you are using. From my experience is perhaps percent or more of all losses are due to not taken losses when they are small or relatively small or when they should be taken.

I can certainly speak from experience when I say that my largest loss resulted from the fact that I refused to take the loss when the time was right . I allowed a $500 loss to turn into a $5000 loss. Fortunately that was the first and last time I was guilty of that serious transgression.

Here are some suggestions as to how to improve your ability to take loses when they should be taken :

1. Formulate your stop loss rules specifically whether they relate to  system or specific risk amount and type or write your rules in large print and place a hard copy near your trading place and refer then frequently.

2.Makee the commitment to accept completely your next ten losses as dictated by your system . Once you have done this , the behavior will become habitual and losses will be easier to accept.

3.If you trade with a full service broker make him aware that of where your stop loss will be and ask him to remind you.

4. Place your stop loss as soon as your entry order has been filled.

Source : Market Masters written by Jake Bernstein.

After Noon Market update

As per hourly chart Nifty spot is taking support at 50 HMA. It may bounce back to 5210 and once breakout above 5210 the target could be 5250. Formation of one or two candles below 5170 is very much important for continuation of the fall.

Market updates for 03/08/2012

Nifty hourly chart

Today's trading session was a choppy trading session. Nifty moved in a narrow range of 30 points.

Nifty has come out  of the raising wedge formation and traded below 5220.  New long positions can be considered only if it sustains above 5250. Indicators  like RSI and MACD are indicating sell and possibility of Nifty moving towards 5150 has increased.  

Nifty daily chart

Nifty is consolidating in a narrow range from past three trading sessions. 5210-5250 is the trading range. Do not take any position in Nifty until it breaks the range.If Nifty closes below 5200 then it can come down to 100 DMA which is at 5145. Above 5250 Nifty can reach 5300.

Chart of the day

 

Tata Motors

Tata Motors is one of the top gainers in recent times. It made a bottom at Rs.203 and bounced back to Rs.229. Tata Motors has been forming lower top and lower bottom from last few months and it can bullish if it closes above Rs.237 which is 200 DMA.

The uptrend in Tata Motors has come to a temporary halt since it has reached a descending trend line drawn by joining Rs.317-309-247. Today Tata Motors closed at Rs.222.7 down by 2% indicating that trend line is acting as strong resistance. Continuation in uptrend can be expected if Tata Motors closes above Rs.228.

Open Positions

Scrip	Type	Price	CMP	P/L
SBI	Long	2015	2011	-4
Rel Infra	Long	507	510.35	2
Tata Mot 220 PE	Long	7.5	7	-0.5

Today's Trade

Scrip	Buy Price	Sell Price	P/L
Tata Mot 220 PE	7.5

Nifty Medium Term Trend

Trend	Down
Initiation Date	26/07/2012
Initiated at	5043
Low since change	5043
Reversal if closes above	5283

 

Thought for the day

We are what we repeatedly do . Excellence , is then , not an act but habit.

Market update for 02/08/2012

Nifty hourly chart

Nifty has continued uptrend by closing at 5240 up by 11 points. Since Nifty has recovered from 5050 levels with in 2-3 trading sessions the momentum has reduced .

In the hourly chart you can see that Nifty has formed raising wedge formation and the trading range is reducing. Nifty can breakout of the range in 1 or 2 trading sessions and the possibility of upward breakout is more than lower breakout. Short term targets are 5258-5300 and reversal can happen if Nifty sustains below 5220.

Nifty daily chart

My view about  Nifty daily chart will remain  same. 5300 could be the peak and Nifty may start falling from 5300. Traders can short Nifty at 5300 levels. If Nifty closes above 5300 book loss and exit the position.

Chart of the day

Zinc

Daily chart of Zinc is a very interesting one. It explains the importance of trend lines from point of view of executing low risk entries.

Zinc is facing strong resistance at Rs..104 levels. It has major support at Rs.101.80. If this support is breached then we can expect a target of Rs.99. So wait for close below Rs.101.8 and take short stop loss should closing above Rs.102. 

Open Positions

Scrip	Type	Price	CMP	P/L
SBI	Long	2015	2033	18
Rel Infra	Long	507	509	2

 

Today's Trade

Scrip	Buy Price	Sell Price	P/L
Tata Steel	406	408	2
Nifty 5300 CE	53	63	10
Rel Infra	507
*Tata Steel Trailing SL triggered

Nifty Medium Term Trend

Trend	Down
Initiation Date	26/07/2012
Initiated at	5043
Low since change	5043
Reversal if closes above	5283

 

Thought for the day 

Be strong NOW because things will get better.It may be stormy now , but it can't rain forever.