Market update for 24/07/2012

Nifty hourly chart

Nifty has showed a large movement after a long time of consolidation. Nifty has closed at 5117 down by 87 points. It has closed below 5190 and so the significance of this breakout is very high. Almost all sectors were weak today. Banks , Metals , Automobiles were the major losers.

What next?

The short term trend remains down. Reversal can happen only if Nifty closes above 5200. On the above chart you can see that Nifty has taken an intermediary support at a sloping trend line. This trend was acting as resistance and now it will be support. Further fall in Nifty can be expected only if Nifty sustains below 5100.

Nifty daily chart

Nifty has turned bearish before a week when the raising wedge was broken. This sharp fall is only the continuation of the trend. Now Nifty has taken support at 200 DMA which is at 5100. Once Nifty closes below this level the trend will remain down from short term to medium term perspective.

Bank Nifty  

The regular readers of this blog might recall that before few days that we had indicated a sell on Bank Nifty  if  it closes below 10500. On Friday we have initiated sell on Bank Nifty aug fut . We are expecting a target of 10100 and much below.

Open Positions

Scrip	Type	Qty	Price	CMP	P/L
Bank Nifty Aug	short	25	10531	10315	5400
Bank Nifty Aug 10500 CE	long	25	225	211	-350
Minifty Aug fut	short	20	5216	5145	1450

Today's Trade 

Scrip	Qty	Buy Price	Sell Price	P/L
JSW Steel	60	691	695	240
SBI	20	2097	2105	160

Nifty Medium Term trend

Trend	Up
Initiation Date	12/06/2012
Initiated at	5116
High since change	5345
Reversal if closes below	5080

Thought for the day

Wanting to reform the whole world without discovering ones true self is like trying to cover the world with leather to avoid the pain of walking on stones and thrones. It is much simpler to wear shoes. Sri Ramana Maharshi

People can learn a lot about life by observing nature's creatures, observations that can benefit every aspect of someone's life. Let us examine a cougar and how it hunts for prey. The cougar is one of nature's fiercest creatures. When hunting for prey, a cougar is strategic. If a cougar fInds a herd of deer, it will wait patiently observing the entire herd looking for the weakness within the herd. The reason for this is that the cougar can only run at top speed for short distances. Therefore, it is imperative to get as close to its prey as possible before making a killing strike. Otherwise, the opportunity will be lost and it may be some time before the next one appears.

The more days that the cougar goes without food, the slower it will be able to run, thus making it harder and harder to attack its prey.

So why are we talking about cougars?

Playing the market is very much like the cougar's hunt for prey. Whether you are trading the Forex market, the Futures market, the Options market, the Equities market, and so forth, you must have a plan before entering each trade. If you do not, it will be harder and harder to find Opportunities because each lost opportunity will take a toll mentally, physically, and psychologically on your well-being.

Therefore, you must observe the instrument greatly before executing a trade. A trader observes the instrument patiently until an opportunity is seen. Once an opportunity is present, a plan is executed. Someone once told me "Trading is neither logical nor predictable." After years of trading, I can honestly say that statement is completely true. It is a probability game, You have to have a system to help increase your probability of success or you are just gambling. By rolling a dice, a person has a probability of 50 percent on the desired outcome. Therefore, one of our goals is to trade with a higher probability of success than 50 percent. How do you do that? This can be achieved by creating a trading system that maximizes profits when you are right and minimizes losses when you are wrong (i.e., play trends instead of consolidation patterns). A trend is when price goes in a certain direction for a long period of time whereas a consolidation pattern is where price goes "back and forth" among a range of prices. As told by Manish Patel in his book Ichimoku trading system

Market update for 20/07/2012

Nifty hourly chart

Today's trading session is a range bound session. We are still in a tight range of 5190-5260. Nifty spot made a day high of 5258 but was not able to cross 5260. Option buyers should be cautious as there are very few trading sessions left before expiry. Maruti , SBI , Hero Moto , Kotak Bank were the major losers among the index stocks. Maruti is a falling knife don't try to catch it. Most of us try to buy those which are falling continuously assuming that it will bounce back which may not happen immediately.

Long positions in Nifty can be entered if Nifty sustains above 5260 minimum target is 5300 . Stop loss below 5190.(Spot levels).

Chart of the day

JSW Steel

Today metal sector was one of the top gainer. Stocks like JSW steel , Sesa Goa , Tata Steel have performed well. The prices of base metals in international market has increased which is positive for metal stocks.

JSW steel has taken support at 200 DMA as well as an ascending trend line and today stock has bounced back. JSW steel closed at Rs.689.50 up by 2.5%.Stochastics is in oversold region indicating that downside is limited. This stock has the potential to reach Rs.720 .

Open Positions

Scrip	Type	Qty	Price	CMP	P/L
JSW Steel	Long	60	691	689	-120
Bajaj Auto	Long	20	1491	1548	1140
Minifty Aug fut	short	20	5216	5280	-1280

Today's Trade

Scrip	Qty	Buy Price	Sell Price	P/L
LT 1400 CE	250	37	22.35	-3662
Bajaj Auto	20	1491	1559	1360
Tata Mot 230 CE	1000	2.05	2.4	-350

Nifty Medium term trend

Trend	Up
Initiation Date	12/06/2012
Initiated at	5116
High since change	5345
Reversal if closes below	5120

Thought for the day

In order for you to succeed,  your desire for success should be greater  than your fear of failure.

Market update for 19/07/2012

Nifty hourly chart

Today's trading session was volatile one. Nifty made a day low of 5170 and sustained for some time. But closing happened at 5216 up by 23 points which has trapped the bears. Unless Nifty closes below 5190 we cannot expect further fall in the market. 5190-5260 will be short term range and we may not notice a sustainable breakout in this series.

Chart of the day

 

Bank Nifty

Bank Nifty is taking a trend line support . If Bank Nifty closes below 10500 then short position can be initiated.Otherwise we can expect a bounce back.

Open Positions 

Scrip	Type	Qty	Price	CMP	P/L
LT 1400 PE	Short	250	22.35	28.7	-1587
Tata Mot 230 CE	Short	1000	2.05	1.75	300
Bajaj Auto	Long	40	1491	1521	1200
Minifty Aug fut	short	20	5216	5245	-580

Today's Trade

Scrip	Qty	Buy Price	Sell Price	P/L
Minifty Aug fut	20	5216
Bajaj Auto	40	1491

Medium term trend

Trend	Up
Initiation Date	12/06/2012
Initiated at	5116
High since change	5345
Reversal if closes below	5120

Thought for the day

Care about what other people think  and you will always be their prisoner - Lao Tzu