Trade long unless closed below 5830. Panic below 5800!!

 Date: 25^th Feb 2013

We are heading for very important event of annual Budget this week. Let me take another opportunity to tell about my experience of trading such events. I have speculated a lot on guessing the outcomes by reading reports ahead of budget and studying them hard to only to burn my hands in the end. I am fan of affordability and let me assure you that trading on such days is very expensive business. One should stay away especially on the event day except he is very experienced professional with rigid system and rules. Other days will make you trade better.

Coming to P&F on Nifty, Have a look at charts with absolute box size of 10 (Figure 1 and 2). As told last week Nifty is trading at Anchor Point support levels of various charts. The anchor point zone shown in Figure 1 is suggesting 5800 – 5840 as a strong support area. It is also trading near lower band of 10 day Bollinger bands. Trading double top buy signal after lower band test is advisable pattern to buy. Don’t miss if it occurs from here.

10 box high-low chart (Figure 2) is indicating the toppish Head and shoulders pattern in prices. Neckline of the pattern is around 5830. There is also 45 degree internal line support coming around same level. One horizontal and vertical count activated target is around 5750. Achievement of that will be more bearish for the prices. Breach of entire formation suggests target around 5450.

Trend seems weak but near support levels. Taking fresh shorts around these levels does not seem affordable but close below 5800 might make bulls press panic. Bears should not miss the opportunity.

For fresh trades, longs seem more affordable from here than shorts. One can bet for this support zone to be taken for a while and trade with stop loss at 5830 on closing basis. Go short if 5800 is broken with same stop loss level on closing basis. On the higher side, 5930 – 5960 is tested band. But picture will be interesting if they are tested again.

    Figure 1: Nifty 10 x 3 cl Point and Figure Chart

    Figure 2: Nifty 10 x 3 hl Point and Figure Chart

-          - Prashant Shah

Disclaimer:
All information provided above is for general information purposes only and does not constitute any investment advice. Company or Author shall not be liable for loss or damage that may arise from use of information provided above. The report is purely for information purposes and does not construe to be investment recommendation/advice or an offer or solicitation of an offer to buy/sell any securities. The opinions expressed are current opinions as of the date appearing in the material and may be subject to change from time to time without notice. Investors should not solely rely on the information contained in this document and must make investment decisions based on their own investment objectives, risk profile and financial position. The readers of this material should take their own professional advice before acting on this information.

Trend is weak, Feed excited bids!!
Date: 18^th Feb 2013

Have a look at P&F charts of Nifty with absolute box size of 10 (Figure 1 and 2). I had to analyse 0.25% high low chart (Figure 3) also to examine bit longer term pattern. 

Nifty is trading at Anchor Point support levels of various charts. Price pattern has confirmed the inherent downtrend and several downtrend count is recently been activated.

Horizontal price pattern is also confirming the toppish pattern that has been formed. Bull ratio of 10 box horizontal pattern is 50%. This means that pattern has become flat and recent aggressive column of O has established the downtrend.

Nifty trend has become weak and we will see resistances at higher levels. Levels between 5830 - 5810 should act as a strong support for a while but testing them will also assure weakness in future. Strong resistance is around 5930 – 40 levels. Picture would turn quiet green if resistance is breached without testing recent support levels.

    Figure 1: Nifty 10 x 3 cl Point and Figure Chart

    Figure 2: Nifty 10 x 3 hl Point and Figure Chart

    Figure 3: Nifty 0.25 x 3 hl Point and Figure Chart

-         -   Prashant Shah

        Disclaimer:
All information provided above is for general information purposes only and does not constitute any investment advice. Company or Author shall not be liable for loss or damage that may arise from use of information provided above. The report is purely for information purposes and does not construe to be investment recommendation/advice or an offer or solicitation of an offer to buy/sell any securities. The opinions expressed are current opinions as of the date appearing in the material and may be subject to change from time to time without notice. Investors should not solely rely on the information contained in this document and must make investment decisions based on their own investment objectives, risk profile and financial position. The readers of this material should take their own professional advice before acting on this information.

Nifty set to witness some price consolidation
Date: 11^th Feb 2013

    

                                              Figure 1: 10 x 3 Cl Point and Figure Chart

Series of O that has recently formed in various P&F Nifty chart is surely indicating that uptrend is exhausted for a while. But short term indicators in Nifty chart suggests that down trend has taken prices to oversold territory and might want to breathe some.

  Figure 2: 10 x 3 HL Point and Figure Chart

Looking left in various Point and Figure charts suggests that some support zone exists around 5900 and between 5860 - 5830. Prices will need some strength if these levels are to be broken and so some stepping back move is quiet possible. It needs very bearish and aggressive news to breach these levels in one go. Traders can keep an eye around these levels to play some small bounces. Nifty resistance for the week seems around 5960 – 5970 levels.

I expect prices to consolidate from here with negative biased trend. Strategies of selling at resistances seem affordable for next few sessions.

-         -  Prashant Shah

        

        Disclaimer:
All information provided above is for general information purposes only and does not constitute any investment advice. Company or Author shall not be liable for loss or damage that may arise from use of information provided above. The report is purely for information purposes and does not construe to be investment recommendation/advice or an offer or solicitation of an offer to buy/sell any securities. The opinions expressed are current opinions as of the date appearing in the material and may be subject to change from time to time without notice. Investors should not solely rely on the information contained in this document and must make investment decisions based on their own investment objectives, risk profile and financial position. The readers of this material should take their own professional advice before acting on this information.

Nifty to test 5900
Date: 4^th Feb 2013

   Figure 1: 10 x 3 Cl Point and Figure Chart

Nifty has closed below 6000 for second consecutive day today. The event is triggering some consolidation to form over next few trading sessions. Have a look at 3 box reversal chart shown above of Nifty of 10 box value.

Chart is trading above 45 degree trend and long term charts are suggesting upward direction with various counts being open. Short term formation has generated double bottom sell signal after some recent bear traps in the up run. This is making prominent short term topping formation.

Short term supports on chart above is clustering around 5900 with 45 degree internal line, anchor points and a vertical count that is been activated recently. This makes me bet atleast for 5900 for short term traders.

    Figure 2: 10 x 3 HL Point and Figure Chart

Chart shown above is high low chart to analyse horizontal patterns and short term price move. A bull trap pattern that has formed recently is signaling some cooling for prices as well. This is confirming the view of short term weakness in prices.

Short term traders should remain short with stop loss at 6030 on closing basis and investors should wait for the opportunity to find the value.

-          - Prashant Shah

      

        Disclaimer:
All information provided above is for general information purposes only and does not constitute any investment advice. Company or Author shall not be liable for loss or damage that may arise from use of information provided above. The report is purely for information purposes and does not construe to be investment recommendation/advice or an offer or solicitation of an offer to buy/sell any securities. The opinions expressed are current opinions as of the date appearing in the material and may be subject to change from time to time without notice. Investors should not solely rely on the information contained in this document and must make investment decisions based on their own investment objectives, risk profile and financial position. The readers of this material should take their own professional advice before acting on this information.