Monday, March 10, 2014

Nifty - Technical Update


  1. This monthly chart of Nifty suggests a breakout price wise. But we all have seen our fair share of false and real breakouts. Which one is this?
  2. Well for starters we have not seen RSI cross the bear market resistance zone (65-70) yet, last time we were there in early 2010 we got resisted.
  3. So does that mean this is a false breakout, no not at all, we just need to observe what RSI does when it gets to that zone, which it so far hasn't.
  4. Last time we had a persistent up move, late 2003 to early 2008, the RSI shot from lower levels above the 65-70 zone, in on straight line, announcing the onset of a major trend, nothing of that sort so far. But lets just keep our eyes open. 
  5. Lets drill down to weekly chart, and try to fathom the market there.

  1. Same story all over again, we have been in the Bear Resistance (65-70) and Bull Support (35-30) zone for almost 3 years.
  2. One thing is for sure, though the Nifty has been volatile, it has been range bound too, so nothing wrong in anticipating a range extension.
  3. We are fast approaching the 65-70 zone on RSI, and it would be very interesting to see what Nifty does there, as it will be the deciding factor for trend in the near future.
  4. Though the trend has been laboring up, RSI has not yet crossed the Bear Resistance zone even once in last 3 years. So no indication of a big breakout yet, that does not mean we cannot get one, but the indicator has kept mum on that front so far.
  5. What does then the daily chart has to offer.


  1. Here is where things are getting interesting. First we have a clean breakout price wise and also RSI has crossed above the Bear Resistance zone, may be not in a straight line, but with sufficient confidence.
  2. Will this be the sign which everyone is waiting for, the signal of a persistent up move coming. Well if it is, then the enthusiasm should spill over to the weekly and monthly time frames, soon, unless that happens this spurt is likely to fizzle out.
  3. But should we see the weekly and monthly time frames joining in, then we most certainly will see a persistent up move, in coming days, weeks, months, years even.
  4. So what we need now, after the initial work has been put in place, is a follow through, that's what is going to decide the fate in the medium to near term for the markets. Until such time one is better served by being cautious.
  5. The early bulls, trend followers, system traders most likely have turned bullish early, for this last up leg, and must be having a nice cushion of profit to lean against. But fresh traders, investors who are looking at a possible breakout, it would be better to wait for a follow through, and then enter on small pull backs.
  6. Those chasing the trend during such times more often than not end up becoming the fuel for sharp reversals.
So have patience, markets are going to be there for a long long time, don't rush it, wait for the right opportunity, and then pull the trigger.
Also this post does not mean that I am bearish on markets, or bullish for that matter. I am a trader and can contribute only about 2 cents when discussing the long term picture. This post is just a peculiar observation, which I have put into words and pictures for people to get some perspective on markets and for experts to give their suggestions and critique.

Saturday, October 5, 2013

USDINR - Elliott Wave Update

  1. This is a chart for USDINR spot. 
  2. I trying to count a possible pattern of double three in this 2 and 1/2 yr up move in USDINR from early 40s.
  3. The first leg was a 3 wave move, followed by an [X] wave.
  4. The price pattern after the [X] wave may be counted as a neutral triangle (Courtesy Neowave).
  5. Which means wave [C] should be the longest of wave [A], [C] and [E].
  6. The wave [B] was a drawn out affair in time, but price wise it did not make an impact, where as the possible wave [D] is sharp so far, and may reach 58.74 odd levels, before it is done with, providing us with clear alternation in price, time and the pattern formed or construction.
  7. Wave [E] should be short and sweet, and a sharp down move should follow once it is done.
  8. Now I am only learning Neowave, and there may be mistakes in my analysis, which I will be glad to correct upon pointed out.
  9. But the purpose of this analysis is to provide us with a broad possibility, or a broad road map, to guide our trading activities on shorter fractals.

Friday, October 4, 2013

Nifty - Technical Update

  1. GAPS in prices are like windows of opportunities.
  2. Last time we were supported by the gap between 5738.50-5673.60, this demand zone propelled us upwards.
  3. Now we are approaching another gap at 6024.55-5989.00, this should act as a resistance zone for the prices.
  4. Price behavior near this zone will tell us whether we have placed a medium to long term bottom in place, or this rise is just a corrective rally.
  5. One cannot miss the falling TL which is now being approached by the prices, even if we BO from this TL, we have a gap resistance right above it.
  6. So a host of supply zones are immediately above us, will the markets break through them or we are going to get badgered down again, remains to be see.
  7. I think one should think about protecting what they have rather than thinking of what one could gain, at such junctures in price.
  8. I would tighten my SL, and look for reentry if all these supply zones are taken out.

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