Update on Nifty

Nifty hourly chart

Today's trading session was very volatile in recent times. First there was a sharp decline followed major pull back. At end of the day Nifty has closed with 59 points gain. Short term reversal of Nifty was closing below 5830 which didn't happen. So uptrend in Nifty is still intact. Yesterday Bank Nifty closes below 11800 because of which our trend indicators in daily chart indicated sell. But today's close above 12000 is a clear reversal of trend. Given the fact that buying interest is back in Financial services sector market is expected to be in positive bias and Nifty might touch 5970 in coming days.

Please note that all entry points will be based on closing basis. For example yesterday it was mentioned that ICICI will fall further if it closes below 1075 which didn't happen. There is a clear difference between trading below and closing below.

Nifty medium term trend

 

Trend	DOWN
Initiation Date	29-11-12
Initiated at	5761
Low since change	5692
Reversal if closes below	5990

 

Commodity update

 

We have initiated long in Lead as it has closed above Rs.121.40. In today's session Cardamom has started uptrend as it has closed above Rs.933. Stop loss will be at least Rs.60. This is usually not recommended unless trader has stomach to digest the risk. Potential loss will be at least Rs.6000 and another major risk is it can hit circuits. At the same time reward is also high. Interested traders can contact me for more details.

 Thought for the day

 

We are what we think.All that we are arises with our thoughts. With our thoughts we make our world. -Buddha

Like my face book page https://www.facebook.com/pages/Stock-Market-Trends/436322416450498

 

Updates on Bank Nifty , ICICI Bank and Lead

Bank Nifty weekly chart

Bank Nifty has seen significant amount of fall in past two days. In yesterday's post I had mentioned about reversal of short term trend if it closes below 11900. Today we have initiated short in Bank Nifty. In weekly chart BN has failed to sustain above the trend line which is one of the indications of possible correction and it is likely to test at least previous lows.

ICICI Bank

ICICI Bank is looking weak. If it closes below Rs.1075 it can fall further.

Lead

At this point of time lead is trading at Rs.122.20. If it closes above Rs.121.40 (which might happen today) it will start uptrend . More details for subscribers.

Nifty medium term trend

Trend	DOWN
Initiation Date	29-11-12
Initiated at	5761
Low since change	5692
Reversal if closes below	5990

Thought for the day

 

However many holy words you read,however many you speak,what good will they do you if you do not act on upon them?  - Buddha

Update on Bank Nifty and HDFC Bank

Bank Nifty daily chart

Bank Nifty is facing selling pressure from past two trading session. Now it has taken support at 20 DMA. If it closes below 20 DMA then that would be the first indication of weakness. However actual down trend will start if it closes below 11900. We have booked profit in Bank Nifty today and continued to hold long in Nifty and LIC.

HDFC Bank

HDFC Bank is trading within a bearish channel. It is forming lower highs and lower lows. Now it has tested the upper part of the channel and started correcting. If it closes below Rs. 641 then medium term down trend will start.

Commodity Trends

Many commodities are in medium down trend. Below are the reversal levels which can be used for considering long. Please note that commodity has to close above the mentioned levels.

Copper	431.5
Crude Oil	5060
Kapas	922.5
Lead	121.5
Nickel	931
Zinc	108.25

Nifty medium term trend

Trend	DOWN
Initiation Date	29-11-12
Initiated at	5761
Low since change	5692
Reversal if closes below	5990

Thought for the day

Nothing is so wretched or foolish as to anticipate misfortunes. What madness is it to be expecting evil before it comes - Seneca

If everyone else is doing it ......don't

Most traders find comfort and confidence knowing that he or she is doing the same thing as everyone else.

Remember that old saying we heard when we were a kid "if everyone jumped off the bridge...."? Our parents encouraged us to resist doing what our peers were doing if the only reason to do it was just because everyone else was. When we were children our parents encouraged us to be independent thinkers and to make our own decisions.

This is great advice for traders but is often forgotten.

Somewhere immersed in the reality of growing up and the real world, many traders forget about the importance of being independent thinkers and making their own trading decisions. Instead, some traders gain confidence from doing the same as what others are doing. However, there is truth to our parent's advice that is especially true as a trader. To be a successful trader you need to think for yourself.

RULE OF THUMB
My rule of thumb when selecting trades is....if everyone else is doing it....I won't. If you have heard of this great trade at a party, from your hairstylist, or a television show, chances are that it's not a good trade to take.

For example, most people will see a stock that gaps down and short it. Then after a few days the stock will move back up and continue its overall trend. People who placed that trade might ask why didn't the short work everyone else was doing it.

TRADE MATCHING
The reason is this; the market must have a buyer and seller for each trade. The market thrives on balance. When all retail traders short a stock, the market will become imbalanced so the natural gravity of the market must be restored. Eventually the short side will be absorbed and the stock will rebalance to its overall trend.

Thinking for yourself when executing trades can be harder than you realize. It's easy to get lulled in to the peer pressure of doing what everyone else is. But when you take a step back and critically evaluate each trade, you have to ask yourself if you found this trade on your own, would you have placed the trade? I would actually argue that if you looked at the trade on your own you would probably take the reverse side of what your "friends" are telling you. As a trader you need to develop a much more sophisticated approach to trading.

Now you may be asking yourself why on earth would I not be satisfied with knowing that many other traders want to place the same trade?

My reason is simple, if the masses are on the one side of trade, you have to remember there is always someone on the other side of that trade, and chances are the big guys (i.e. banks, market makers) are waiting in anticipation just like hungry crocodiles waiting to eat up that trade. I prefer to side with the crocodiles and eat with them, as opposed to being their dinner it's safer and a much more satisfying place to be.

Sara Potter

Updates on Nifty and LIC Hsg Fin

Nifty weekly chart

 

 

 

Nifty has started with a flat opening in the first trading session of this week. It is expected to continue its short term uptrend .

 

Above is the weekly chart of Nifty. After reaching a low of 5692 (spot) Nifty has bounced back. It is likely to test 6050 which is the trend line resistance. RSI is not over bought in daily chart so technically Nifty has potential to test 6050. Reversal of short term uptrend will be closing below 5840.

 

LIC Hsg Fin

 

 

 

LIC was in down trend from many weeks. On Friday's session it made a sharp bounce back . Closing above Rs.249 was the first indication of beginning of uptrend. It has closed above 20 DMA , MACD has indicated buy indication. We have initiated long in LIC Hsg Fin at Rs.251.50.

 

Update on Zinc

In last post I had mentioned about continuation of down trend if Zinc closes below Rs.107. Now it is trading around Rs.105. If it closes below Rs.107 traders should forget about buying Zinc. Sell on every rally as long as it is below Rs.107.

 

Nifty medium term trend

 

Trend	DOWN
Initiation Date	29-11-12
Initiated at	5761
Low since change	5692
Reversal if closes below	5990

 

Thought for the day

 

Only dumb people try to impress smart people. Smart people just do what they do - Chris Rock