Market updates for 05/07/2012

Nifty Hourly Chart

It was a range bound trading session. Nifty is trading in a very narrow range of 56 points that is between 5262-5318. Today Nifty closed at 5302 up by 14 points and  Nifty has closed above 5300 after nearly 2 months.

If Nifty manages to close above 5300 one more time  then the possibility of reaching 5400 will increase further.Reversal of the trend can happen if Nifty sustains below 5260.

Nifty daily chart

In daily chart of Nifty you can see a number of ' doji ' candles which is sign of indecision in the market.  July is the month of quarterly results. So according to me this month should be full of activities. Market has to come out the trading range in short period of time and the breakouts will be very swift. Don't miss the opportunities.

Open Positions

Scrip	Type	Qty	Price	CMP	P/L
Bharti	Long	200	321.6	327	1080
SBIN	Long	40	2185	2225	1600
Nifty 5200 PE	Long	50	51	42	-450

Today's Trade 

Scrip	Qty	Buy Price	Sell Price	P/L
Dr Reddy	60	1667	1642	-1500
Yes Bank	65	340.5	350	617.5
Tata Mot	100	245.5	239	-650
Bharti	200	321.6

 * All of them are positional trades.

Nifty Medium Term Trend 

Trend	Up
Initiation Date	12/06/2012
Initiated at	5116
High since change	5302
Reversal if closes below	5020

Thought for the day

Failure is the opportunity to begin again , more intelligently - Henry Ford

Market update for 04/07/2012

Nifty hourly chart

There is no significant changes in the hourly chart. Nifty is consolidating again. New long position should be considered only if Nifty sustains above 5318 and stop loss will be below 5262. The expected target 5400 is achievable. Reversal of the trend is below 5200.

Nifty daily chart

Nifty has again closed with insignificant gains. Currently Nifty is facing resistance at 5300 levels which is 61.8% retracement. Overall trend remains bullish. However , traders should trade with strict stop loss , periodical profit booking is a must. If you have many positions it is advisable to buy very few at the money put option to hedge the positions. Whenever market  is at higher levels we all expect it to rally further and vice versa. But we have to take precaution.

Till now capital goods , Banks and Auto mobile sectors were leading the rally. But now metals and telecom are in centre of the stage. So watch out Hindalco , JSW steel and Bharti.

Chart of the day

INR has started appreciating against  USD and there are multiple indications that this will continue further. Now the target for INR is 53.90-52.90-52 and reversal is above 55.25.

Open Positions

Scrip	Type	Qty	Price	CMP	P/L
Yes Bank	Long	65	340.5	350.6	656.5
Tata Mot	Long	100	245.5	238	237.5
SBIN	Long	40	2185	2187.5	100
Dr Reddy	Long	60	1667	1668.5	90
Nifty 5200 PE	Long	50	51	50.5	-25

Trailing SL for Yes Bank is at Rs.343.00

Today's Trade

Scrip	Qty	Buy Price	Sell Price	P/L
Dr Reddy	60	1667
Nifty 5200 PE	50	51

Nifty Medium Trend

Trend	Up
Initiation Date	12/06/2012
Initiated at	5116
High since change	5287
Reversal if closes below	5020

Thought for the day

"He who is not contented with what he has will not be contented with what he would like to have " - Socrates

Market update for 03/07/2012

Nifty Hourly Chart

The market was range bound and closed flat at 5278 down by 0.30 points!!. Banks, capital goods and realty were gainers . FMCG were biggest losers of the day.

After a major rally on Friday’s trading session market is consolidating getting ready for next move. Overall trend remains up. Today Nifty has touched 5300 levels and 5400 is the next level to watch for. This is a buy on dip market and if Nifty comes down to 5200 levels it should be considers as an opportunity to take long positions in Nifty and high beta stocks.

Option buyers have a lesson to learn here. Nifty 5200 CE is down by 6% and 5300 CE is down by 8%. The value of the option premium tend to diminish if Index or stock doesn’t move for a given period of time. Traders should understand that this is not a debate about which is better ( buying option or writing option , buying option or future) but this is only an observation.

Nifty Daily Chart

Until Nifty is above 100 DMA that is 5184 no worry for bulls at all. If Nifty closes below 5184 then it can test 200 DMA at 5080.

Today’s candle stick pattern is called as ‘Doji’. It is formed on the chart when open and close are almost equal. Doji convey a sense of indecision between buyers and sellers. However market will overcome  this indecision session sooner or later and there is every possibility that Nifty will continue towards 5400.

Chart of the day

 

 

M& M was consolidating between the range 680-710 and today it has come out of the range. But it is unable to cross 200 DMA at Rs.715. If M&M closes above Rs.715 then the target will be Rs. 735-748 and above. Stop loss below Rs.700.

 Open Positions

Scrip	Type	Qty	Price	CMP	P/L
Yes Bank	Long	65	340.5	344.4	253.5
Tata Mot	Long	100	245.5	238	-750
SBIN	Long	40	2185	2181	-160

 

Today's Trade

Scrip	Qty	Buy Price	Sell Price	P/L
Hero Motoco	65	2127	2130	195
SBIN	40	2185
Jubl Food	66	1184	1216	2112

 

Nifty Medium Term Trend

Trend	Up
Initiation Date	12/06/2012
Initiated at	5116
High since change	5280
Reversal if closes below	5020

Thought for the day

"Risk comes from not knowing what you're doing." - Warren Buffett

 

Market updates for 02/07/2012

Nifty Hourly chart

Finally an expected and long awaited breakout has happened in the market. Nifty has come out of the trading range 5094-5191 and this rally is expected to continue for some more time. The immidiate target is 5300 and Nifty has every potential to reach upto 5400. Ride the tide and don't worry about Why? How? When? because for a trader  WHAT?? is more important.

Many people talk about a theory called filling of the GAP. Whenever market makes a gap or gap down open that gap will be filled within a few trading session thereby trapping the long positions . There are atleast four types of gaps. Today we will look into two types of gaps

 1. Common gap 2.Breakaway gap

Common gaps will happen within a trading range or formation and they are filled in next few trading sessions. But breakaway gaps happen after a long period of consolidation and it is not necessary that this kind of gap should be filled. The gap up open which we witnessed on Friday is a breakaway gap and for the time being let us not think about filling the gap.

Nifty Daily Chart

Nifty has closed above 100 DMA at 5200 which is a bullish sign.50% retracement of the fall from 5624 levels is at 5297 and once Nifty sustains above that level next target will be 5440.

Nifty Monthly Chart

Traders should be very careful at 5400  because there are multiple resistance at this level. As soon as Nifty reaches around 5400 (Not exactly 5400). Exit a major part of holdings and sit with cash to encash the opportunities.

Top Pick of the week

IDFC : Buy around Rs.136-140 for a target of Rs.150-160. Reversal is closing below Rs.130 Time frame could be one month. Untill it is above Rs.130 bulls have upper hand.

Trade as per risk tolerence but not as per expectations.

Open Positions

Scrip	Type	Qty	Price	CMP	P/L
Yes Bank	Long	65	340.5	339	-97.5
Tata Mot	Long	100	245.5	242.5	-300
Hero Motoco	Long	65	2127	2150	1495

Today's Trade

Scrip	Qty	Buy Price	Sell Price	P/L
Hero Motoco	65	2127

Nifty Medium Term View

Trend	Up
Initiation Date	12/06/2012
Initiated at	5116
High since change	5280
Reversal if closes below	5020

One of the traderswas complaining that I am defensive and I need to be aggressive to earn more money in market. I am defensive and I will be defensive for ever. I give highest importance for protecting the capital because money doesnt come for free. If you have capital you will earn profit. You will get nothing out of nothing.

I am not an aggressive day trader and I prefer swing trading (2-3 days) and trend trading (more than a week). I also don't try to double money overnight and my basic objective is to earn smaller but consistentprofit. Because I consider trading as a business but not as a casino. What about you??

Thought for the day

Buy that which is showing strength – sell that which is showing weakness. The public continues to buy when prices have fallen. The professional buys because prices have rallied. This difference may not sound logical, but buying strength works. The rule of survival is not to “buy low, sell high”, but to “buy higher and sell higher”. Furthermore, when comparing various stocks within a group, buy only the strongest and sell the weakest.

 3 simple rules of trading by Alen Hull

They look simple but following them is difficult for most of us and these are the rules which are frequently violated by most of the traders.

1 Buy a rising share - sell a falling share

2 Always use a stop loss that moves up with price activity

3 Never risk more than 2% of total capital on any individual trade

Buy a rising share - sell a falling share

This rule is often confused with 'buy low - sell high' which has 85% of share traders buying shares that are going down in price in the hope that they will immediately turn around and start going up. This mistake leads to the sad statistic that 85% of share traders lose money.

'Buy a rising share - sell a falling share' is all about buying into markets that are already rising, which is so painfully obvious that the majority of share traders, ie. 85% of them, don't do it. The reason for this is simple and psychological; human beings are counter-intuitive by nature. So in order to be successful we must be prepared to stop thinking like everybody else.

Always use a stop loss that moves up with price activity

An initial stop loss is a price level that defines the point at which we are ready to admit that the market is not behaving as we would expect and we are prepared to sell. In other words this is the point where we admit that the trade is a failure. All share traders have losing trades and the only fatal failure in the marketplace is the failure to execute one's stop losses. When the market moves in the direction we expect it to then the price at which we are prepared to sell should move with it, locking in profits. If our stop loss has moved beyond our entry price (the point at which we bought into the market) and we fail to sell if it is triggered, then we are being greedy; this will also prove fatal.

Never risk more than 2% of total capital on any individual trade

The game of coin toss is a fair game of chance where no participant should expect to win or lose over the long term. As global equity markets have risen by an average of 9% per annum for the past 100 years, all share traders should expect to profit by an average of 9% per annum. So why do only 15% of share traders make money? Answer…the ability to survive.If a participant wishes to remain in a game of coin toss for the long term then they would have to be able to sustain a string of up to 8 consecutive losses. This is because a string of 8 consecutive losses is likely to occur in a game where there are 2 equally possible outcomes. The same logic applies to the Stock market where the majority of share traders in the U.S. in the 1990s had an average life expectancy of only 8 trades. So in order to survive in the marketplace long enough to enjoy the average return of 9% per annum over the long term, it is essential that share traders can sustain an extended string of losses. By only risking 2% of total capital on any individual trade, a share trader can sustain up to 194 consecutive losses.