CYCLICAL NATURE OF MARKETS: A TECHNICAL ANALYSIS OF NIFTY
Every stock or index moves as per laws of vibration or like a sinusoidal wave which is clearly seen on any oscillator like RSI or stochastic. The drop of NIFTY started in Oct 21 which can be easily seen RSI monthly chart, the move down happens like a ball bounce where first bounce came at Dec 21 which was evident on daily RSI levels between 40 and 30, the bounce rose till Jan 22 and like wise the drop and bounce can be seen till date. The down trend on monthly chart is evident and can be captured easily if the drop and bounce concept is understood. The bounces are erratic and brings in counter trends. Most lose money in capturing the counter trend. If one has to analyse the current situation market though in downtrend is preparing itself for a bounce. The basing on weekly charts is visible both on price and RSI. The basing structure which has to emerge is of double bottom or W on lower TF charts.
How far is going to be bounce? With every successive bounce the energy of stock gets dissipated and bounce levels should reduce as per laws of vibrations. The Feb bounce was of 900 points, March bounce was of 500 points. Once the price reach the pivot or previous base it should temporarily act as a spring base to infuse some energy in the bounce before the final drop takes place. So likely bounce is expected to be of thousand points forming a price pattern of head and shoulders. The evolution of price patterns can be correlated with vibration and ball bounce which can further be traced to human psychology. Why select price patterns are formed and repeated can be easily be forecasted, which was a major study of WD Gann. If one can build on his writings and study charts diligently one can easily crack the code. The so called irrationality of markets is not that wayward as it is assumed. If one can get in sync with the vibration and rhyme with the markets the world will be yours.
The entire move Oct 21 onwards can be encapsulated in a box and it is seen that there should be at least two touch bases before the price moves out of the box. I think Nicholas Darvas also betted on these boxes. Sometimes based on other extraneous factors price may come only half way and doesn't touch the base and moves up. Till the price is in the box its either in accumulation or distribution mode. If the price moves downward of the box one can say we are in recession and more pain is awaited. If it remains in consolidation for longer time with 2 or 3 touch base an explosive up move is contemplated. I feel that this consolidation should last till this year end unless there are some good geo political economic triggers.
If 15200 levels are violated then it will be mayhem as seen during COVID times. But all these violations are good buying opportunities. Every touch base is a buying or accumulating opportunity. The whole aim is to get the time and price cycle correct. One concentrates more on price cycle than on time cycle. One should go the dictum
To every thing there is a season,
and a time to every purpose under the heaven:
A time to be born, a time to die;
a time to plant, and a time to pluck up that which is planted;
A time to kill, and a time to heal;
a time to break down, and a time to build up;
A time to weep, and a time to laugh;
a time to mourn, and a time to dance;
A time to cast away stones, and a time to gather stones together;
a time to embrace, and a time to refrain from embracing;
A time to get, and a time to lose;
a time to keep, and a time to cast away;
A time to rend, and a time to sew;
a time to keep silence, and a time to speak;
A time to love, and a time to hate;
A time of war, and a time of peace.
How far is going to be bounce? With every successive bounce the energy of stock gets dissipated and bounce levels should reduce as per laws of vibrations. The Feb bounce was of 900 points, March bounce was of 500 points. Once the price reach the pivot or previous base it should temporarily act as a spring base to infuse some energy in the bounce before the final drop takes place. So likely bounce is expected to be of thousand points forming a price pattern of head and shoulders. The evolution of price patterns can be correlated with vibration and ball bounce which can further be traced to human psychology. Why select price patterns are formed and repeated can be easily be forecasted, which was a major study of WD Gann. If one can build on his writings and study charts diligently one can easily crack the code. The so called irrationality of markets is not that wayward as it is assumed. If one can get in sync with the vibration and rhyme with the markets the world will be yours.
The entire move Oct 21 onwards can be encapsulated in a box and it is seen that there should be at least two touch bases before the price moves out of the box. I think Nicholas Darvas also betted on these boxes. Sometimes based on other extraneous factors price may come only half way and doesn't touch the base and moves up. Till the price is in the box its either in accumulation or distribution mode. If the price moves downward of the box one can say we are in recession and more pain is awaited. If it remains in consolidation for longer time with 2 or 3 touch base an explosive up move is contemplated. I feel that this consolidation should last till this year end unless there are some good geo political economic triggers.
If 15200 levels are violated then it will be mayhem as seen during COVID times. But all these violations are good buying opportunities. Every touch base is a buying or accumulating opportunity. The whole aim is to get the time and price cycle correct. One concentrates more on price cycle than on time cycle. One should go the dictum
To every thing there is a season,
and a time to every purpose under the heaven:
A time to be born, a time to die;
a time to plant, and a time to pluck up that which is planted;
A time to kill, and a time to heal;
a time to break down, and a time to build up;
A time to weep, and a time to laugh;
a time to mourn, and a time to dance;
A time to cast away stones, and a time to gather stones together;
a time to embrace, and a time to refrain from embracing;
A time to get, and a time to lose;
a time to keep, and a time to cast away;
A time to rend, and a time to sew;
a time to keep silence, and a time to speak;
A time to love, and a time to hate;
A time of war, and a time of peace.
Comment:
how to add a fresh chart to current thread, can anyone guide please. Or do we have to start a new thread
Comment:
RANDOM THOUGHTS ON BEING A SUCCESSFUL TRADER
The other day I had posted a message on one of the Whatsapp group to what constitutes being a successful trader. Pondering on the subject and on gathering the thoughts I have been able to zone on the following:-
A brilliant General is the one who has been able to execute a successful withdrawal or retreat operation amongst other ones. Being from Armed Forces fraternity I preferred that analogy so as to define a successful trader.
Bottom line – A successful trader has to be profitable. However success in trading can be illustrated on different levels.
- At metaphysical levels, some one can term it weird however markets teach you to dive within to such realms that a stage comes when money is just a manifestation of your being yourself. A deep introspection of yourself and markets bring you in such synchronisation that you can call it a torrid love affair. Market tells you who you are and what you are going to be.
- At emotional levels, it’s a tryst with yourself as there are no friends or enemies but just you and market both doing duo job to ascertain yourself. I never thought that mind can be so fickle especially if you are doing intraday. Instead of red and green candles communicating to you, they capture your imagination and play hide and seek nasty games.
- At mental levels it is so taxing that it tests your patience to the hilt with its erratic movements. Sometimes your view is correct but the market does its own thing only to abide by your thinking when time is right. That brings in the most important time element in your trading.
- At physical level, it is the manifestation of all above three levels in a very exemplified manner. May be good/brilliant or grotesque/gross manner. But there is a silver lining too, when market goes your way, I found myself whistling a good song. There is no thrill in life as comparable when market swings your way and all that hard work pays.
- Market and me both are great lovers.
Defining being a successful trader
- After deep introspection, I found that a successful trader is the one who is profitable both in bull and bear markets. It entails first getting the understanding of whether the market is bull and bear. There are multiple indicators but Dow Jones did a great research to find primary, secondary and minor trends. Simple theory of higher high and higher lows and vice a versa defines a trend. Understanding market structure and geometry is the key to be the successful trader.
- A successful trader is the one who can trade all assets classes that is equity, derivatives, currency, commodity and cryptos, etc if there are others too. Every asset has a personality and a behaviour. Its trader’s skill to decipher the same as displayed over a time. WD Gann too mentioned of personality of stocks. Every stock is assumed to have life wherein they vibrate at certain frequency. The skill of successful trader is to understand these frequencies and play them. The movement of stock markets is like a musical notation trying to make a symphony out of it.
- A successful trader is the one who can trade all time frames or alternatively be profitable being a scalper, intraday guy, swing, positional or investment types. Its not easy to be all, only if you are superhuman. Every trader has a DNA, the skill is in understanding your genome code and how you are wired. The other side of hill may seem green but it may be red for your neural networks. Mental mobility is the key to being successful trader, easier said than done. Adapting to markets is the fight between market and your ego or pride. Most of time pride and ego make you lose your capital both emotional and physical. Physical capital can be regained but losing emotional capital makes you a nervous wreck. Beware and flag it. Its only the brave who trade and earn, rest of them push files in office.
- Consistency is more important than accuracy. Biggest deterrence to same is ego and pride. I have seen my ego and pride bringing me to my knees by the markets. However it is required to build a successful trader. You only rise when you hit the bottom. Rock bottom! I will write separately on rock bottom from my daily diary. I am still a student learning with all trials and tribulations. I am sure the trading community can understand these feelings I am sharing.
- In loose technical terms - A successful trader is not the one who captures top or bottom but captures the majority of move through his setup.
- However successful trader is the one like ‘Scarlett O hara’ from ‘Gone with the Wind’, tomorrow is another day. There is no time to brood over the past failures but just lessons to be catered for in the future. The greatness of the trader is how he deals with losses, if he takes that’s personal or consider it as cost of doing business. It is the development of candidness to admit ‘I was wrong’ that defines the great trader.
- It is those rising or falling GREEN or RED candles in the background and booking of profits or cutting the losses that defines a successful trader.
I salute to all those who have selected trading and investing as their terra forte and wish them a good luck and great profits. I assure if you desire to make markets as your profession and are willing to surrender yourself to GOD or stock market in instant case the profits will just flow in for you will be unable handle profits.
Regards
The other day I had posted a message on one of the Whatsapp group to what constitutes being a successful trader. Pondering on the subject and on gathering the thoughts I have been able to zone on the following:-
A brilliant General is the one who has been able to execute a successful withdrawal or retreat operation amongst other ones. Being from Armed Forces fraternity I preferred that analogy so as to define a successful trader.
Bottom line – A successful trader has to be profitable. However success in trading can be illustrated on different levels.
- At metaphysical levels, some one can term it weird however markets teach you to dive within to such realms that a stage comes when money is just a manifestation of your being yourself. A deep introspection of yourself and markets bring you in such synchronisation that you can call it a torrid love affair. Market tells you who you are and what you are going to be.
- At emotional levels, it’s a tryst with yourself as there are no friends or enemies but just you and market both doing duo job to ascertain yourself. I never thought that mind can be so fickle especially if you are doing intraday. Instead of red and green candles communicating to you, they capture your imagination and play hide and seek nasty games.
- At mental levels it is so taxing that it tests your patience to the hilt with its erratic movements. Sometimes your view is correct but the market does its own thing only to abide by your thinking when time is right. That brings in the most important time element in your trading.
- At physical level, it is the manifestation of all above three levels in a very exemplified manner. May be good/brilliant or grotesque/gross manner. But there is a silver lining too, when market goes your way, I found myself whistling a good song. There is no thrill in life as comparable when market swings your way and all that hard work pays.
- Market and me both are great lovers.
Defining being a successful trader
- After deep introspection, I found that a successful trader is the one who is profitable both in bull and bear markets. It entails first getting the understanding of whether the market is bull and bear. There are multiple indicators but Dow Jones did a great research to find primary, secondary and minor trends. Simple theory of higher high and higher lows and vice a versa defines a trend. Understanding market structure and geometry is the key to be the successful trader.
- A successful trader is the one who can trade all assets classes that is equity, derivatives, currency, commodity and cryptos, etc if there are others too. Every asset has a personality and a behaviour. Its trader’s skill to decipher the same as displayed over a time. WD Gann too mentioned of personality of stocks. Every stock is assumed to have life wherein they vibrate at certain frequency. The skill of successful trader is to understand these frequencies and play them. The movement of stock markets is like a musical notation trying to make a symphony out of it.
- A successful trader is the one who can trade all time frames or alternatively be profitable being a scalper, intraday guy, swing, positional or investment types. Its not easy to be all, only if you are superhuman. Every trader has a DNA, the skill is in understanding your genome code and how you are wired. The other side of hill may seem green but it may be red for your neural networks. Mental mobility is the key to being successful trader, easier said than done. Adapting to markets is the fight between market and your ego or pride. Most of time pride and ego make you lose your capital both emotional and physical. Physical capital can be regained but losing emotional capital makes you a nervous wreck. Beware and flag it. Its only the brave who trade and earn, rest of them push files in office.
- Consistency is more important than accuracy. Biggest deterrence to same is ego and pride. I have seen my ego and pride bringing me to my knees by the markets. However it is required to build a successful trader. You only rise when you hit the bottom. Rock bottom! I will write separately on rock bottom from my daily diary. I am still a student learning with all trials and tribulations. I am sure the trading community can understand these feelings I am sharing.
- In loose technical terms - A successful trader is not the one who captures top or bottom but captures the majority of move through his setup.
- However successful trader is the one like ‘Scarlett O hara’ from ‘Gone with the Wind’, tomorrow is another day. There is no time to brood over the past failures but just lessons to be catered for in the future. The greatness of the trader is how he deals with losses, if he takes that’s personal or consider it as cost of doing business. It is the development of candidness to admit ‘I was wrong’ that defines the great trader.
- It is those rising or falling GREEN or RED candles in the background and booking of profits or cutting the losses that defines a successful trader.
I salute to all those who have selected trading and investing as their terra forte and wish them a good luck and great profits. I assure if you desire to make markets as your profession and are willing to surrender yourself to GOD or stock market in instant case the profits will just flow in for you will be unable handle profits.
Regards
Comment:
views welcome
Comment:
LAW OF VIBRATION (CONTINUED) - MEAN REVERSION
To a layman as the word suggests vibration is a continuous process around the mean, for example in a sine wave the value oscillates around the mean. In stock market the price moves around the mean.
The classical mean reversion is seen during range bound phase or during accumulation or distribution phase. As seen from the chart of Reliance it is moving approximately in between upper range 2856 and lower range 2203. Price is expected to react from the demand zone.
in.tradingview.com/chart/Fr8CA32T/
Is mean reversion seen only in range bound markets? No, mean reversion can also be seen in trending markets. For example Bharti Airtel:-
in.tradingview.com/chart/wtn3PLZX/
It is seen that price is oscillating between 0.382 levels in the lower band of the pitchfork.
The structure of mean reversion for move from the bottom to top & vice versa is witnessed by the way of formation of a divergence followed by a double bottom/top on one lower time frame chart in instant case the daily or lower time frame charts. As of now both in Reliance & Bharti on daily charts double bottom has been formed. There have been instances where triple bottom is also seen.
It’s a W shape wherein the next week last leg of W should be formed. The confirmation of the pattern is only when price moves above the wedge.
The psychology of double bottom is that the huge orders of institutions don’t get filled in one go, hence they move the price higher and again bring it to lower price (demand zone) to fill their balance orders and thereafter move the price higher to its fair value.
Drawing boxes on the price of range bound markets and instance of price breaking out from the box is followed by another box on top of the lower box. Classic example is that of silver
in.tradingview.com/chart/FltaVt41/
In Each box, price is doing mean reversion to move to next box and so on. Trading mean reversion is about understanding the range or consolidation. It may not always be touch top or bottom but can also move in between or around the mean without touching the edges.
The structure of mean also has a correlation with NIFTY, one can find weekly highs and lows matching with some times stock outperforming the index and otherwise too. When NIFTY itself is in the box and moving about mean the broader market and stocks too find itself in similar mode. The vibration of NIFTY is contagious to its constituents.
Correlation of vibration between price chart and RSI chart. RSI chart gives the clear picture and importance of levels of 30/40 & 60/70 can not be ignored. The reaction from these levels and mean reversion on RSI charts is also a matter of study. More of it next.
To a layman as the word suggests vibration is a continuous process around the mean, for example in a sine wave the value oscillates around the mean. In stock market the price moves around the mean.
The classical mean reversion is seen during range bound phase or during accumulation or distribution phase. As seen from the chart of Reliance it is moving approximately in between upper range 2856 and lower range 2203. Price is expected to react from the demand zone.
in.tradingview.com/chart/Fr8CA32T/
Is mean reversion seen only in range bound markets? No, mean reversion can also be seen in trending markets. For example Bharti Airtel:-
in.tradingview.com/chart/wtn3PLZX/
It is seen that price is oscillating between 0.382 levels in the lower band of the pitchfork.
The structure of mean reversion for move from the bottom to top & vice versa is witnessed by the way of formation of a divergence followed by a double bottom/top on one lower time frame chart in instant case the daily or lower time frame charts. As of now both in Reliance & Bharti on daily charts double bottom has been formed. There have been instances where triple bottom is also seen.
It’s a W shape wherein the next week last leg of W should be formed. The confirmation of the pattern is only when price moves above the wedge.
The psychology of double bottom is that the huge orders of institutions don’t get filled in one go, hence they move the price higher and again bring it to lower price (demand zone) to fill their balance orders and thereafter move the price higher to its fair value.
Drawing boxes on the price of range bound markets and instance of price breaking out from the box is followed by another box on top of the lower box. Classic example is that of silver
in.tradingview.com/chart/FltaVt41/
In Each box, price is doing mean reversion to move to next box and so on. Trading mean reversion is about understanding the range or consolidation. It may not always be touch top or bottom but can also move in between or around the mean without touching the edges.
The structure of mean also has a correlation with NIFTY, one can find weekly highs and lows matching with some times stock outperforming the index and otherwise too. When NIFTY itself is in the box and moving about mean the broader market and stocks too find itself in similar mode. The vibration of NIFTY is contagious to its constituents.
Correlation of vibration between price chart and RSI chart. RSI chart gives the clear picture and importance of levels of 30/40 & 60/70 can not be ignored. The reaction from these levels and mean reversion on RSI charts is also a matter of study. More of it next.
Comment:
RULES FOR MEAN REVERSION
1. FORMATION OF A RANGE. A stock has completed its move and thereafter formed a high and low. A higher low formation on a higher time frame chart ie weekly TF.
2. Draw a parallel channel from high to low.
3. Watch price move bouncing off the top and bottom forming demand and supply zones.
4. Violation of Zones. Sometimes demand and supply zones are violated as everyone is watching the same chart and taking the same trade, hence sometimes it gets broken for approx 10-15% again to resume the ping pong.
5. Common ground. Price at every move touches the median everytime.
6. Price Box. The highs and lows can be encapsulated in the box. Breaking of box to at least 50 % levels give a trend which if not continued again falls into new box where mean reversion can be traded.
Views Welcome
1. FORMATION OF A RANGE. A stock has completed its move and thereafter formed a high and low. A higher low formation on a higher time frame chart ie weekly TF.
2. Draw a parallel channel from high to low.
3. Watch price move bouncing off the top and bottom forming demand and supply zones.
4. Violation of Zones. Sometimes demand and supply zones are violated as everyone is watching the same chart and taking the same trade, hence sometimes it gets broken for approx 10-15% again to resume the ping pong.
5. Common ground. Price at every move touches the median everytime.
6. Price Box. The highs and lows can be encapsulated in the box. Breaking of box to at least 50 % levels give a trend which if not continued again falls into new box where mean reversion can be traded.
Views Welcome
Comment:
Price Action, Oscillators and Error of Judgement
Price action is the king, if you can really understand its language you don’t require oscillators. However it takes years of training your eyes to understand the market cycles if one is doing it without oscillators. Al brooks have written comprehensive books on price action but it takes patience to read it.
One caveat is anyone can describe price action on the left side of the chart, however skill is to forecast future move based on market cycles. It’s not that easy as for human psychology is the biggest detriment to all studies on price action.
Forming of view based on numerous inputs everyone in his studies forms a view of where market is headed with EMA, Elliot Wave, Fib levels, oscillators, indicators, etc. If one understands the market structure and stages of market one can predict the future.
Oscillators are not leading indicators as they lag to price. However its useful for swing and positional trading for you can guage the upcycle or downcycle both with price action and oscillator. Monthly oscillator is the master timeframe and all other timeframes are the subset of monthly charts. A swing or positional trades can be taken based on weekly and monthly charts where you can capture the major moves though not the top or bottom.
Extrapolation of past for modelling on future is just a guideline to elaborate behavioural patterns of each stock or index, however these are not exactly replicated and that gives a large margin for error of judgement. With definitive rules both for price and oscillators the error of judgement can be reduced drastically.
Error of Judgement is going to be experienced by all traders at some point of trading and trading decisions largely affected by the same. Many a traders have experienced at least in the initial part of trading career that price rise when you sell and price drops when you buy. I used to wonder how exactly market could read my mind and believed that market had extra sensory perception about my mind.
Instead of fighting error of judgement and trying to be accurate, give a benefit of margin to adjust the error. How much margin? Say till next HH/HL or LL/LH. It then takes guts to admit you are wrong and cut the losses.
How much time should you give for error of judgement? Its based on market conditions and location of price and location of RSI on the chart. One has to develop that skills over a period to timely square off the losing positions. It takes more patience and guts to hold a winning position for previous experience of losses affects human psychology to play safe.
Every trader at some point too have experienced seeing his winning trade turn into a loser so the scars of such episodes leave deep effect on the subconscious. It takes training of mind to understand price, time and movement.
A solid setup should give leeway for error of judgement to be obviated, one also need patience in terms of time to see the formed view unfold, then the guts to cut or hold the trade and then book profits.
Price action is the king, if you can really understand its language you don’t require oscillators. However it takes years of training your eyes to understand the market cycles if one is doing it without oscillators. Al brooks have written comprehensive books on price action but it takes patience to read it.
One caveat is anyone can describe price action on the left side of the chart, however skill is to forecast future move based on market cycles. It’s not that easy as for human psychology is the biggest detriment to all studies on price action.
Forming of view based on numerous inputs everyone in his studies forms a view of where market is headed with EMA, Elliot Wave, Fib levels, oscillators, indicators, etc. If one understands the market structure and stages of market one can predict the future.
Oscillators are not leading indicators as they lag to price. However its useful for swing and positional trading for you can guage the upcycle or downcycle both with price action and oscillator. Monthly oscillator is the master timeframe and all other timeframes are the subset of monthly charts. A swing or positional trades can be taken based on weekly and monthly charts where you can capture the major moves though not the top or bottom.
Extrapolation of past for modelling on future is just a guideline to elaborate behavioural patterns of each stock or index, however these are not exactly replicated and that gives a large margin for error of judgement. With definitive rules both for price and oscillators the error of judgement can be reduced drastically.
Error of Judgement is going to be experienced by all traders at some point of trading and trading decisions largely affected by the same. Many a traders have experienced at least in the initial part of trading career that price rise when you sell and price drops when you buy. I used to wonder how exactly market could read my mind and believed that market had extra sensory perception about my mind.
Instead of fighting error of judgement and trying to be accurate, give a benefit of margin to adjust the error. How much margin? Say till next HH/HL or LL/LH. It then takes guts to admit you are wrong and cut the losses.
How much time should you give for error of judgement? Its based on market conditions and location of price and location of RSI on the chart. One has to develop that skills over a period to timely square off the losing positions. It takes more patience and guts to hold a winning position for previous experience of losses affects human psychology to play safe.
Every trader at some point too have experienced seeing his winning trade turn into a loser so the scars of such episodes leave deep effect on the subconscious. It takes training of mind to understand price, time and movement.
A solid setup should give leeway for error of judgement to be obviated, one also need patience in terms of time to see the formed view unfold, then the guts to cut or hold the trade and then book profits.
Comment:
WEEKLY TECHNICAL ANALYSIS OF NIFTY
1. The weekly OHLC values
Open – 17066
High – 17207
Low – 16828
Close – 16945
Total Range of current week (H-L) - 621 pts
Total Range of previous week(H-L) – 679 points
Change from Previous close (17000 - 16945) - 55 points
2. Description of Location of Price
-Demand Zone Range - 16862 to 16600
-Status - Currently taken support from demand zone
-Distance from Trendline – at straight 90 degree – 17645 – 16945 = 700 points
-Distance from Trendline at 45 degree – 17427 – 16945 = 482 points
-Analysis – Likely retracement of approx. 500 points
-Pitchfork Status – Price at the lowermost line of pitchfork
-Analysis - Likely reaction from bottom as it is also confluence of demand zone & pitchfork line
-20 EMA status – EMA line tilting downwards, distance of approx. 645 point from EMA line
-Analysis – Far away from EMA line, suggesting mean reversion.
-Basing structure on lower time frame ie daily time frame
-Status - double bottom being formed, last leg of W yet pending.
-Analysis – Basing structure takes time as previous swing low basing structure took nearly three weeks for commencement of upmove. Considering the banking collapse and loss of confidence amongst the trading community the sentiment is negative which gives probability of violation of demand zone. Coming week we can see an up move or a destructive week forming minor lower low. It would be followed with a explosive upmove.
Monthly candle analysis. Currently there are four continuous red candles which are being formed on monthly charts which is rare phenomenon.
Status – Oversold
Analysis – Reaction expected either this week or the next ie April first week.
3. RSI Analysis
-Current RSI value on weekly charts – 38.82
-Precedent – Whenever RSI crosses 40 there has been a reaction.
- There is a divergence on RSI daily charts. The pattern which is generally followed is divergence on daily and weekly charts ie 28 Feb and 14 Mar clear divergence as RSI was flat but price moved from 17300 to 16900.
-The divergence is generally followed by an upmove and retracement (.382 or .236) which was clearly seen in Friday session.
-Analysis – Confirmation can only be seen if RSI crosses above 40 on weekly charts and price moves and sustains above 17200.
4. Overall Analysis – As per DOW theory, even for a bear market the structure of LL/LH has to be formed. Current confluence of factors favours retracement. However the banking collapse in conjunction with Fed rate hike can become a black swan event with panic selling and price violating the demand zone violently.
If market retrace we can see a 500 relief rally till the trendline.
Que sera sera. Lets see.
Views Welcome
Regards
1. The weekly OHLC values
Open – 17066
High – 17207
Low – 16828
Close – 16945
Total Range of current week (H-L) - 621 pts
Total Range of previous week(H-L) – 679 points
Change from Previous close (17000 - 16945) - 55 points
2. Description of Location of Price
-Demand Zone Range - 16862 to 16600
-Status - Currently taken support from demand zone
-Distance from Trendline – at straight 90 degree – 17645 – 16945 = 700 points
-Distance from Trendline at 45 degree – 17427 – 16945 = 482 points
-Analysis – Likely retracement of approx. 500 points
-Pitchfork Status – Price at the lowermost line of pitchfork
-Analysis - Likely reaction from bottom as it is also confluence of demand zone & pitchfork line
-20 EMA status – EMA line tilting downwards, distance of approx. 645 point from EMA line
-Analysis – Far away from EMA line, suggesting mean reversion.
-Basing structure on lower time frame ie daily time frame
-Status - double bottom being formed, last leg of W yet pending.
-Analysis – Basing structure takes time as previous swing low basing structure took nearly three weeks for commencement of upmove. Considering the banking collapse and loss of confidence amongst the trading community the sentiment is negative which gives probability of violation of demand zone. Coming week we can see an up move or a destructive week forming minor lower low. It would be followed with a explosive upmove.
Monthly candle analysis. Currently there are four continuous red candles which are being formed on monthly charts which is rare phenomenon.
Status – Oversold
Analysis – Reaction expected either this week or the next ie April first week.
3. RSI Analysis
-Current RSI value on weekly charts – 38.82
-Precedent – Whenever RSI crosses 40 there has been a reaction.
- There is a divergence on RSI daily charts. The pattern which is generally followed is divergence on daily and weekly charts ie 28 Feb and 14 Mar clear divergence as RSI was flat but price moved from 17300 to 16900.
-The divergence is generally followed by an upmove and retracement (.382 or .236) which was clearly seen in Friday session.
-Analysis – Confirmation can only be seen if RSI crosses above 40 on weekly charts and price moves and sustains above 17200.
4. Overall Analysis – As per DOW theory, even for a bear market the structure of LL/LH has to be formed. Current confluence of factors favours retracement. However the banking collapse in conjunction with Fed rate hike can become a black swan event with panic selling and price violating the demand zone violently.
If market retrace we can see a 500 relief rally till the trendline.
Que sera sera. Lets see.
Views Welcome
Regards
Comment:
Laws of Vibration (Continued)
Price and Time Correction
A chart of any index or stock is generally plotted on X & Y axis, X axis is the horizontal axis which is depicted by time and Y axis is the vertical one which displays price.
The movement of stock generally alternates between price movements followed by a time lapse or time correction. This happens in varying degrees. It is alike to compression and rarefaction of a sound wave. Price correction is like compression and time correction is like rarefaction. Explosive moves happen in shorter duration of time and which followed by extensive time correction where price just spends time to complete its time cycle. It follows the laws of vibration.
The skill is to understand that stock is currently in which cycle ( Price or Time). An investor should buy at the end of time cycle (How to predict end of time cycle, I will cover it separately), A trader should buy on commencement of price cycle. Eg NIFTY is currently in time correction mode encapsulated in a box. Its best to sit out in time correction mode or do systemic (SIP) buying or accumulation on every dip.
However it is found that time of explosive price movement is always for less period of time than the following or preceding time correction. There is study done wherein it is found that Nifty is trending 20-25% of time and balance time its non trending or in time correction mode.
Explosive price movement happens from basing at EMA, pitch fork, trendline or from Demand and Supply Zones. Price moves away from base and come back to EMA, pitch fork lines or trendline to form a next base and prepare for next move. Price correction are prominently visible on the charts with HH/HL or LL/LH structures.
Price movement can be calibrated by fib levels, pitchforks, trendlines, parallel channel, box heights, ABCD or XABCD harmonic levels or Elliot waves (12345), etc. Price movement is also seen through various price patterns like double bottom/top, cup and handle, triangles, flag and pennant, etc. These price patterns also have the inherent geometry to give the future price predictions for booking of profits. Completion of price cycles can be predicted on oscillators and guiding NIFTY or sector cycles. Its also related to human psychology.
After the price movement it is followed by time correction. Time corrections are tricky for one at times misinterpret times correction as part of price correction and gets stuck in a trade. First indication of commencement of time cycle is divergence on oscillators. Thereafter the confirmation of time cycle is when price just lingers or start making LL/LH structures in bullish market and vice versa. Or price starts moving top to bottom or vice versa on RSI or any other oscillator. In a bullish cycle If RSI completes it cycle from top to bottom and price doesn’t break the previous low the same can be taken as classic time correction cycle.
-Time correction It has several connotations as given below:-
-No significant price movement but price lingers around 20 EMA for some time and then its next movement commences.
-Price retraces partly. Part retracement is generally seen in time correction where price falls to 0.382 or 0.286 levels. This time correction can be extended over a period of time, for eg Silver after making a high in May 2011 retraced to 0.382 levels in March 2020, so it was an extended 9 year retracement. However previous swing low on higher time frame charts is not broken.
-Full retracement or more is seen wherein there is a trend reversal. Wherein it breaks the previous swing low in bullish cycle on weekly or monthly charts.(We will discuss it separately) It includes distribution and mark down stage.
- Four Touch Principle. Silver after making a life time high in May 2011 started it retracement journey along the basic trendline which had four touches, first in September 2012, Second in August 2014, third in may 2015 and in Oct 2015. It broke out from trendline in March 2016.
-I have found a four touch trendline pattern ie first touch is generally the divergence, second touch is reaction from a demand or supply zone. Post second touch a triangle structure is seen to be forming. Third touch happens after extensive basing activity or consolidation and price breaks the box only to touch the trendline and retrace. Buyer’s are still not ready to break the trendline. It then completes the next touch on the triangle. From here it goes for fourth touch or breakout. It may have minor reaction on fourth touch and finally give a confirmed break out on fifth attempt. It is mostly seen on all time frames, however larger the time frame more authentic the break out. Sometimes there are exceptions too.
-Twin Trendline Concept. Price generally moves from basic trendline to extended trendline only to resume the original retracement. In instant case it made the first touch point on extended trendline in May 2016 to make a bottom in Oct 2018. (I will dwell on this concept separately)
-Basing Structure. This was the commencement of the basing structure or part of consolidation structure. Basing happens after time correction (Price doesn’t violate previous swing high or low). Base can be framed in a rectangle or a box. It can have price to have three or four touch base point and two or three ceiling touch points.
-Boxes . Price breaks out of the box only to form another box on top of previous box. The next box may be just above the previous one or could just be overlapping one. There is no black and white in market the method in madness is only found through shades of grey. Hence its not a science but an art.
The evolving pattern in a bullish structure can be : -
Price and time corrections – Twin Trendline concept – Price peaks or price cycle complete- Divergence- Basic counter trendline – Extended counter Trendline- Basing structure-Ovelapping Boxes- Formation of basic bullish trendline – formation of extended bullish trendline and cycle continues. This is how vibration on stock market could be seen.
Well these all are observations done after countless hours of observing different charts on different time frames. People do star gazing as hobby, I am hooked onto chart gazing and try to understand what each chart, each candle is wanting to communicate with me. Left hand side of the chart is the mirror to reflect the right hand side. If only we can understand and decipher the market's language.
Price and Time Correction
A chart of any index or stock is generally plotted on X & Y axis, X axis is the horizontal axis which is depicted by time and Y axis is the vertical one which displays price.
The movement of stock generally alternates between price movements followed by a time lapse or time correction. This happens in varying degrees. It is alike to compression and rarefaction of a sound wave. Price correction is like compression and time correction is like rarefaction. Explosive moves happen in shorter duration of time and which followed by extensive time correction where price just spends time to complete its time cycle. It follows the laws of vibration.
The skill is to understand that stock is currently in which cycle ( Price or Time). An investor should buy at the end of time cycle (How to predict end of time cycle, I will cover it separately), A trader should buy on commencement of price cycle. Eg NIFTY is currently in time correction mode encapsulated in a box. Its best to sit out in time correction mode or do systemic (SIP) buying or accumulation on every dip.
However it is found that time of explosive price movement is always for less period of time than the following or preceding time correction. There is study done wherein it is found that Nifty is trending 20-25% of time and balance time its non trending or in time correction mode.
Explosive price movement happens from basing at EMA, pitch fork, trendline or from Demand and Supply Zones. Price moves away from base and come back to EMA, pitch fork lines or trendline to form a next base and prepare for next move. Price correction are prominently visible on the charts with HH/HL or LL/LH structures.
Price movement can be calibrated by fib levels, pitchforks, trendlines, parallel channel, box heights, ABCD or XABCD harmonic levels or Elliot waves (12345), etc. Price movement is also seen through various price patterns like double bottom/top, cup and handle, triangles, flag and pennant, etc. These price patterns also have the inherent geometry to give the future price predictions for booking of profits. Completion of price cycles can be predicted on oscillators and guiding NIFTY or sector cycles. Its also related to human psychology.
After the price movement it is followed by time correction. Time corrections are tricky for one at times misinterpret times correction as part of price correction and gets stuck in a trade. First indication of commencement of time cycle is divergence on oscillators. Thereafter the confirmation of time cycle is when price just lingers or start making LL/LH structures in bullish market and vice versa. Or price starts moving top to bottom or vice versa on RSI or any other oscillator. In a bullish cycle If RSI completes it cycle from top to bottom and price doesn’t break the previous low the same can be taken as classic time correction cycle.
-Time correction It has several connotations as given below:-
-No significant price movement but price lingers around 20 EMA for some time and then its next movement commences.
-Price retraces partly. Part retracement is generally seen in time correction where price falls to 0.382 or 0.286 levels. This time correction can be extended over a period of time, for eg Silver after making a high in May 2011 retraced to 0.382 levels in March 2020, so it was an extended 9 year retracement. However previous swing low on higher time frame charts is not broken.
-Full retracement or more is seen wherein there is a trend reversal. Wherein it breaks the previous swing low in bullish cycle on weekly or monthly charts.(We will discuss it separately) It includes distribution and mark down stage.
- Four Touch Principle. Silver after making a life time high in May 2011 started it retracement journey along the basic trendline which had four touches, first in September 2012, Second in August 2014, third in may 2015 and in Oct 2015. It broke out from trendline in March 2016.
-I have found a four touch trendline pattern ie first touch is generally the divergence, second touch is reaction from a demand or supply zone. Post second touch a triangle structure is seen to be forming. Third touch happens after extensive basing activity or consolidation and price breaks the box only to touch the trendline and retrace. Buyer’s are still not ready to break the trendline. It then completes the next touch on the triangle. From here it goes for fourth touch or breakout. It may have minor reaction on fourth touch and finally give a confirmed break out on fifth attempt. It is mostly seen on all time frames, however larger the time frame more authentic the break out. Sometimes there are exceptions too.
-Twin Trendline Concept. Price generally moves from basic trendline to extended trendline only to resume the original retracement. In instant case it made the first touch point on extended trendline in May 2016 to make a bottom in Oct 2018. (I will dwell on this concept separately)
-Basing Structure. This was the commencement of the basing structure or part of consolidation structure. Basing happens after time correction (Price doesn’t violate previous swing high or low). Base can be framed in a rectangle or a box. It can have price to have three or four touch base point and two or three ceiling touch points.
-Boxes . Price breaks out of the box only to form another box on top of previous box. The next box may be just above the previous one or could just be overlapping one. There is no black and white in market the method in madness is only found through shades of grey. Hence its not a science but an art.
The evolving pattern in a bullish structure can be : -
Price and time corrections – Twin Trendline concept – Price peaks or price cycle complete- Divergence- Basic counter trendline – Extended counter Trendline- Basing structure-Ovelapping Boxes- Formation of basic bullish trendline – formation of extended bullish trendline and cycle continues. This is how vibration on stock market could be seen.
Well these all are observations done after countless hours of observing different charts on different time frames. People do star gazing as hobby, I am hooked onto chart gazing and try to understand what each chart, each candle is wanting to communicate with me. Left hand side of the chart is the mirror to reflect the right hand side. If only we can understand and decipher the market's language.
Comment:
A standard disclaimer which I would like to give, all these ideas and writing are for educational purposes only.
Comment:
Views welcome
Regards
Regards
Comment:
WEEKLY TECHNICAL ANALYSIS OF NIFTY
Weekly range of +468 points. Nifty as expected has taken support from the demand zone and has given a rally of 279 points in the Friday session.
What to expect of NIFTY in next week and month? Next week is truncated owing to holidays on 04 and 07 Apr.
Price Action on daily charts. Breaking of wedge of W by a strong bullish candle is beautifully seen on daily charts giving clear indication of a rally. The strong bullish candle on weekly charts is a sign of rally coming in the month. The trendline is just 150 points away which likely to be touched on Monday session. On SGX Nifty the trendline has already been touched.
EMA. It is around 250 points away from 20 EMA. Both trendline and EMA are likely to offer resistance and some reaction or retracement is likely.
DJI. The rally on Friday of 415 points and its likely hood of touching the secondline at 34000 is very strong as per momentum seen on charts. DJI likely to go for touch of the top of box of 37000. Surprisingly market structures of both DJI & NIFTY are at variance but in given situation the trajectory of both is Northward.
Nifty Likelyhood. There are two scenarios:-
Scenario 1. Nifty touching the pitchfork levels of 0.618 at around 17900 levels.
Scenario 2. Nifty going for top of the box at 0.382 for 18700 levels.
The current touch point will be fourth touch point and there will be some reaction at the trendline before it is breached. It may take 2-3 weeks to reach around 17900 levels and may be month of May to reach top of box at 18700 levels.
Law of Vibration. Like a bouncing ball Nifty descended in steps from Nov 22 to Mar 23 a drop of around 2000 points. If you see that Nifty reverberated like a string being shaken around its mean on daily charts.
Now at the support or demand zone new energy has been infused in the ball to take the role of arrow so as to shoot up.
RSI Analysis. Rsi has taken support from 40 levels and is at 46 levels. It may sustain some resistance at 50 levels for move up to 60 levels on weekly charts.
Overall Analysis. We are awaiting a rally. Reaction at trendline is good time to buy both index and stocks. Select the correct sectors and leaders. FPI monitor gives clear indication of which sectors money is flowing in as compared to previous time period. From the charts one can easily find the smart money flow for one to swim along.
Spoil sport. Market is known to have played difficult and the reaction from trendline wouldn't be minor and at times can be major reaction. So one needs to be careful.
So friends happy hunting and hope one is like a humble student to learn from markets who is always a teacher.
Views Welcome
Regards
Weekly range of +468 points. Nifty as expected has taken support from the demand zone and has given a rally of 279 points in the Friday session.
What to expect of NIFTY in next week and month? Next week is truncated owing to holidays on 04 and 07 Apr.
Price Action on daily charts. Breaking of wedge of W by a strong bullish candle is beautifully seen on daily charts giving clear indication of a rally. The strong bullish candle on weekly charts is a sign of rally coming in the month. The trendline is just 150 points away which likely to be touched on Monday session. On SGX Nifty the trendline has already been touched.
EMA. It is around 250 points away from 20 EMA. Both trendline and EMA are likely to offer resistance and some reaction or retracement is likely.
DJI. The rally on Friday of 415 points and its likely hood of touching the secondline at 34000 is very strong as per momentum seen on charts. DJI likely to go for touch of the top of box of 37000. Surprisingly market structures of both DJI & NIFTY are at variance but in given situation the trajectory of both is Northward.
Nifty Likelyhood. There are two scenarios:-
Scenario 1. Nifty touching the pitchfork levels of 0.618 at around 17900 levels.
Scenario 2. Nifty going for top of the box at 0.382 for 18700 levels.
The current touch point will be fourth touch point and there will be some reaction at the trendline before it is breached. It may take 2-3 weeks to reach around 17900 levels and may be month of May to reach top of box at 18700 levels.
Law of Vibration. Like a bouncing ball Nifty descended in steps from Nov 22 to Mar 23 a drop of around 2000 points. If you see that Nifty reverberated like a string being shaken around its mean on daily charts.
Now at the support or demand zone new energy has been infused in the ball to take the role of arrow so as to shoot up.
RSI Analysis. Rsi has taken support from 40 levels and is at 46 levels. It may sustain some resistance at 50 levels for move up to 60 levels on weekly charts.
Overall Analysis. We are awaiting a rally. Reaction at trendline is good time to buy both index and stocks. Select the correct sectors and leaders. FPI monitor gives clear indication of which sectors money is flowing in as compared to previous time period. From the charts one can easily find the smart money flow for one to swim along.
Spoil sport. Market is known to have played difficult and the reaction from trendline wouldn't be minor and at times can be major reaction. So one needs to be careful.
So friends happy hunting and hope one is like a humble student to learn from markets who is always a teacher.
Views Welcome
Regards
Comment:
Update
A word of caution in May 22 a similar situation had been there where NIFTY rose only to fall later in Jun 22 ie Ukraine war and thereafter the upmove commenced on weekly charts. So we need to observe the reaction at trendline/EMA, take trade if only after confirmation.
A word of caution in May 22 a similar situation had been there where NIFTY rose only to fall later in Jun 22 ie Ukraine war and thereafter the upmove commenced on weekly charts. So we need to observe the reaction at trendline/EMA, take trade if only after confirmation.
Comment:
EVOLUTION OF TRADE SETUP AND PSYCHOLOGY
Mark Miniverni in one of his workshops taught his entire skills to the batch and then asked " How many are ready to make money in stock market?"
Only one or two of them raised their hands. He was aghast and felt he wasted his time.
Going more deeper I realised that one can't cut copy paste a trade setup of the legends and become like them.
For two individuals are different and their mental makeup is also different. Otherwise there are thousands of books with hundreds of ways elucidated to earn money from markets. But human psychology doesn't work that way unless you become a robot and execute it with almost discipline.
Human factors be it war or markets are unfathomable.
So what should one do?
One should evolve a system oneself suiting ones DNA. The basic factor is you must know yourself and find out what style of trading suits yourself.
A mentor would assist you in evolution of system but cardinal rule you have to work yourself up with what works and what doesn't?
This is one journey you have to initiate yourself.
There are multiples setups based on price action, indicators, different theories Dow Elliot wave, volume and market profiles, laws of vibration, cause and effect, newton's laws of movement. I have found that all these have worked for some, hence are being propounded and are valid.
Like Bruce Lee said its not hundred kicks you know but the one kick you have practised hundred times.
Evolve a setup, work on it relentlessly, draw its rules and exceptions. And practice it ruthlessly.
Do mid course corrections and keep refining it with different markets.
Trading is an inward journey with outward manifestations. Attending workshops, seminars, reading books, watching YouTube videos are good to broaden your horizon .
But first you have to formulate your own horizon.
Views welcome
Mark Miniverni in one of his workshops taught his entire skills to the batch and then asked " How many are ready to make money in stock market?"
Only one or two of them raised their hands. He was aghast and felt he wasted his time.
Going more deeper I realised that one can't cut copy paste a trade setup of the legends and become like them.
For two individuals are different and their mental makeup is also different. Otherwise there are thousands of books with hundreds of ways elucidated to earn money from markets. But human psychology doesn't work that way unless you become a robot and execute it with almost discipline.
Human factors be it war or markets are unfathomable.
So what should one do?
One should evolve a system oneself suiting ones DNA. The basic factor is you must know yourself and find out what style of trading suits yourself.
A mentor would assist you in evolution of system but cardinal rule you have to work yourself up with what works and what doesn't?
This is one journey you have to initiate yourself.
There are multiples setups based on price action, indicators, different theories Dow Elliot wave, volume and market profiles, laws of vibration, cause and effect, newton's laws of movement. I have found that all these have worked for some, hence are being propounded and are valid.
Like Bruce Lee said its not hundred kicks you know but the one kick you have practised hundred times.
Evolve a setup, work on it relentlessly, draw its rules and exceptions. And practice it ruthlessly.
Do mid course corrections and keep refining it with different markets.
Trading is an inward journey with outward manifestations. Attending workshops, seminars, reading books, watching YouTube videos are good to broaden your horizon .
But first you have to formulate your own horizon.
Views welcome
Comment:
BASING STRUCTURE
All trends start from a base. Bases are easily discernible on weekly charts.
Bases as seen are extended time spent at a price zone gathering critical mass. In nuclear physics, the minimum amount of a given fissile material necessary to achieve a self-sustaining fission chain reaction under stated conditions. laser too works on principle of external stimulation.
Once critical has been gained then a trial move commence only to ascertain the resistance at higher levels. That is to say that once institutions fill their orders they move the price just higher so as to breach the resistance. Later making it fall back in the zone or at times violate the price zone creating a zone below the original basing zone.
This at times is a trap for those who mistake this pin prick as commencement of trending move. Thus even after rising, price collapses only to form a new low and simultaneously cause divergence on oscillator.
This divergence is also part of basing Structure wherein final confirmation is attained for commencement of a trend.
Sometimes it's agonising to see after divergence price moves up only to retrace back 0.382 or 0.236 levels thereby extending the basing to few weeks or months.
There have been one candle reversals too negating longish time correction. Usually they are event or news based movements.
Option selling is best during such consolidation for market is range bound.
The next phase of mark up is the phase which makes you rich. Hence basing, consolidation and stage analysis is important in markets.
Views welcome
All trends start from a base. Bases are easily discernible on weekly charts.
Bases as seen are extended time spent at a price zone gathering critical mass. In nuclear physics, the minimum amount of a given fissile material necessary to achieve a self-sustaining fission chain reaction under stated conditions. laser too works on principle of external stimulation.
Once critical has been gained then a trial move commence only to ascertain the resistance at higher levels. That is to say that once institutions fill their orders they move the price just higher so as to breach the resistance. Later making it fall back in the zone or at times violate the price zone creating a zone below the original basing zone.
This at times is a trap for those who mistake this pin prick as commencement of trending move. Thus even after rising, price collapses only to form a new low and simultaneously cause divergence on oscillator.
This divergence is also part of basing Structure wherein final confirmation is attained for commencement of a trend.
Sometimes it's agonising to see after divergence price moves up only to retrace back 0.382 or 0.236 levels thereby extending the basing to few weeks or months.
There have been one candle reversals too negating longish time correction. Usually they are event or news based movements.
Option selling is best during such consolidation for market is range bound.
The next phase of mark up is the phase which makes you rich. Hence basing, consolidation and stage analysis is important in markets.
Views welcome
Comment:
WEEKLY TECHNICAL UPDATE
Location of price on weekly charts - At the trendline, at 20 EMA, near 0.786 levels on pitchfork
What to expect?
Scenario no 1. Reaction at trendline, already happened once on Thursday because of trendline profit booking syndicate. The battle between bulls and bears will continue in coming week with bulls wanting to break the trendline and bears resisting. So one can expect volatality with wide swing moves unless:-
Massive Gap up opening with clear break of trendline and market retraces back and thereafter the upmove continues. (Best Case Scenario)
Massive Gap Down with market climbing back to 17500-600 levels on to break the trendline.
Scenario No 2. Price continues its downward trend with journey towards bottom of the box first target 16000 followed upto 15200.
Scenario 3. Price retrace till 17300 previous support and continues its northward journey.
Recommendation. Wait and watch for next week it will clear where market is heading.
Views Welcome
Regards
WEEKLY TECHNICAL UPDATE
Location of price on weekly charts - At the trendline, at 20 EMA, near 0.786 levels on pitchfork
What to expect?
Scenario no 1. Reaction at trendline, already happened once on Thursday because of trendline profit booking syndicate. The battle between bulls and bears will continue in coming week with bulls wanting to break the trendline and bears resisting. So one can expect volatality with wide swing moves unless:-
Massive Gap up opening with clear break of trendline and market retraces back and thereafter the upmove continues. (Best Case Scenario)
Massive Gap Down with market climbing back to 17500-600 levels on to break the trendline.
Scenario No 2. Price continues its downward trend with journey towards bottom of the box first target 16000 followed upto 15200.
Scenario 3. Price retrace till 17300 previous support and continues its northward journey.
Recommendation. Wait and watch for next week it will clear where market is heading.
Views Welcome
Regards
Comment:
WEEKLY UPDATE - TECHNICAL ANALYSIS OF NIFTY
After nearly four months of drop, Nifty has violently moved up for past three weeks. It broke trendline with little or no reaction.
Currently Nifty is a resistance and strong supply zone. It is expected that a reaction to be seen to 17600 levels. If Nifty has to move till the top of the box there is a requirement of reaction.
If NIFTY doesn't react and move to 18000 levels we can expect a sharp reaction thereafter and NIFTY may fall down to the bottom of pitchfork or even below eventually.
Dollar index is falling and is in downcycle and is around the mean, there may be some reaction around the mean. Silver and Gold to gain till the reaction.
DJI with fed likely to ease rate hike cycle there may be up move till the top of box of DJI. There is a variance of market cycle DJI is in upcycle while Nifty is in downcycle on monthly charts. We only hope that DJI pulls up world indexes.
Much against willful thinking I think Option 2 (as shown in the chart above) will play up in the future.
Views welcome
regards
WEEKLY UPDATE - TECHNICAL ANALYSIS OF NIFTY
After nearly four months of drop, Nifty has violently moved up for past three weeks. It broke trendline with little or no reaction.
Currently Nifty is a resistance and strong supply zone. It is expected that a reaction to be seen to 17600 levels. If Nifty has to move till the top of the box there is a requirement of reaction.
If NIFTY doesn't react and move to 18000 levels we can expect a sharp reaction thereafter and NIFTY may fall down to the bottom of pitchfork or even below eventually.
Dollar index is falling and is in downcycle and is around the mean, there may be some reaction around the mean. Silver and Gold to gain till the reaction.
DJI with fed likely to ease rate hike cycle there may be up move till the top of box of DJI. There is a variance of market cycle DJI is in upcycle while Nifty is in downcycle on monthly charts. We only hope that DJI pulls up world indexes.
Much against willful thinking I think Option 2 (as shown in the chart above) will play up in the future.
Views welcome
regards
Comment:
Refer to chart above it seems NIFTY is taking the Option 1 , if so than first target 18000 and then we see the price action to ascertain its movement
Views Welcome
Regards
Views Welcome
Regards
Comment:
Weekly Update - Technical Analysis of NIFTY
Nifty as expected took Option 1 as stated above and reached the levels of 18000 and at 0.618 levels of pitchfork. It has given a rally of over 1000 points.
What can be contemplated in coming months or weeks>
If we go by previous trends in may & jun 2018 as also in Dec2018 to Feb 2019, the index went side ways (as shown on the sketch). It is also logical that after a move of over 1000 points Nifty may take a breather for 2/3 months.
The location of price is just above 20 EMA.
Nifty may linger between the narrow range of 18150 - 17800 for next two months before making a move to the top of the box.
RSI structure. Rsi may cross the EMA and stall which implies there is still a hundred points upmove pending for RSI to close above the EMA.
RSI structure however suggests a contrarian view to price structure! The RSI suggests a little upmove followed by the move down, however price suggests consolidation followed by upmove till the top of the box. Thereafter creation of divergence between price and RSI IS LIKELY.
For choice between price and RSI, price being a leading indicator will always take the sway.
Recommendations. Being range bound it will be option sellers markets, option buyers should look for scalping or booking early profits. Stock specific moves based on earnings season will see some trending moves. Volatility will increase with simultaneous sharp up and down moves.
Old American saying "Sell in May and Go Away" stands good.
Views Welcome
Regards
Weekly Update - Technical Analysis of NIFTY
Nifty as expected took Option 1 as stated above and reached the levels of 18000 and at 0.618 levels of pitchfork. It has given a rally of over 1000 points.
What can be contemplated in coming months or weeks>
If we go by previous trends in may & jun 2018 as also in Dec2018 to Feb 2019, the index went side ways (as shown on the sketch). It is also logical that after a move of over 1000 points Nifty may take a breather for 2/3 months.
The location of price is just above 20 EMA.
Nifty may linger between the narrow range of 18150 - 17800 for next two months before making a move to the top of the box.
RSI structure. Rsi may cross the EMA and stall which implies there is still a hundred points upmove pending for RSI to close above the EMA.
RSI structure however suggests a contrarian view to price structure! The RSI suggests a little upmove followed by the move down, however price suggests consolidation followed by upmove till the top of the box. Thereafter creation of divergence between price and RSI IS LIKELY.
For choice between price and RSI, price being a leading indicator will always take the sway.
Recommendations. Being range bound it will be option sellers markets, option buyers should look for scalping or booking early profits. Stock specific moves based on earnings season will see some trending moves. Volatility will increase with simultaneous sharp up and down moves.
Old American saying "Sell in May and Go Away" stands good.
Views Welcome
Regards
Comment:
EVERTHING WORKS IN THE MARKET AND NOTHING WORKS! (FINDING KEY TO MARKET
In this journey to trading and investing one had dived deep with all resources at hand like books written by legends on their successes and riches in the stock market. There are other sources too like youtube videos, seminars, workshops, webinars, etc. Everything works and nothing works(I will deliberate it a little later).
The left side of the chart looks so lucrative and easy, however real thing is on the developing right side of chart. That where its a skill of both science and arts. I think it more of matter of art for otherwise these algos and AI would have made everyone rich. Being art its more feminine and that's why its difficult to understand.
The journey of trader is through different phases which can be progressively listed in order as that of euphoria, despair and angst, learning curve, breakout point and then to riches. Find your location as per mark points above. Some have natural instincts but others can develop too. I lacked the natural ways but with sheer determination one can acquire one.
The path was like re-discovery wherein greats like Jesse Livermore, Gann, Elliot and many others have given their journey in their respective books. Each of them having a different journey however to the same destination. (Sounds like an dictum in Bhagwadgeeta)
Were there any secrets that they had unravelled. The secret is that there is no secret. The secret is they found themselves and their own way of decoding the markets. Everyone at the end realised that its a simple path and scaled heights with riches.
Why is it difficult to just follow their path, its so because everyone is a different personality and have varied mental and emotional setup, that's why you can't just replicate someone else's formula.
What market wants you to do is to discover your own path and then follow it religiously or rather ruthlessly with discipline. No amount of books, reading, youtube videos or any other material is goiing to help for you have to discover your own path. Till then market will give you some profits and then take it away too. Consider it as cost of doing business if you are a serious player or bear it as losses.
I consider losses as investment for they give you insight into language of stock market. Its important to taste both red apples and green chilles however the pleasures you will get are converse in markets. Green candles will give you goosebumps however red ones will make it sour.
Why knowledge or methods given by wizards don't work with you? Its like reading a manual on driving a car or how to swim, in both cases no amount of theory can give you a perspective of what to do when you are actually in driver seat or water. Its only when you dive deep, hands on the job and ear to the ground that you get a real feel.
All methods work in the market, all indicators too work for they are in vogue because someone was successful using them. Different theories of markets, wave theory, oscillators, harmonics, gann cycles of price and time all work for at least they worked for their originators. All of them shared their knowledge and internet as medium made them viral.
As you as a practice duplicator you didn't really go deep in the minds of these pioneers to understand the nuances of the theory and its applications and also didn't have patience and perseverance of those who invented it. Hence with small disappointments you came to conclusion that it doesn't work. That's the reason why everything works and nothing works.
With all trials and tribulations finally with lots of experimentation you find your way and see light at the end of tunnel. Well its like awakening only to realise that it was such a simple path. What makes the journey interesting is that find yourself or rediscover yourself and of course the riches that follow are a byproduct.
In this journey to trading and investing one had dived deep with all resources at hand like books written by legends on their successes and riches in the stock market. There are other sources too like youtube videos, seminars, workshops, webinars, etc. Everything works and nothing works(I will deliberate it a little later).
The left side of the chart looks so lucrative and easy, however real thing is on the developing right side of chart. That where its a skill of both science and arts. I think it more of matter of art for otherwise these algos and AI would have made everyone rich. Being art its more feminine and that's why its difficult to understand.
The journey of trader is through different phases which can be progressively listed in order as that of euphoria, despair and angst, learning curve, breakout point and then to riches. Find your location as per mark points above. Some have natural instincts but others can develop too. I lacked the natural ways but with sheer determination one can acquire one.
The path was like re-discovery wherein greats like Jesse Livermore, Gann, Elliot and many others have given their journey in their respective books. Each of them having a different journey however to the same destination. (Sounds like an dictum in Bhagwadgeeta)
Were there any secrets that they had unravelled. The secret is that there is no secret. The secret is they found themselves and their own way of decoding the markets. Everyone at the end realised that its a simple path and scaled heights with riches.
Why is it difficult to just follow their path, its so because everyone is a different personality and have varied mental and emotional setup, that's why you can't just replicate someone else's formula.
What market wants you to do is to discover your own path and then follow it religiously or rather ruthlessly with discipline. No amount of books, reading, youtube videos or any other material is goiing to help for you have to discover your own path. Till then market will give you some profits and then take it away too. Consider it as cost of doing business if you are a serious player or bear it as losses.
I consider losses as investment for they give you insight into language of stock market. Its important to taste both red apples and green chilles however the pleasures you will get are converse in markets. Green candles will give you goosebumps however red ones will make it sour.
Why knowledge or methods given by wizards don't work with you? Its like reading a manual on driving a car or how to swim, in both cases no amount of theory can give you a perspective of what to do when you are actually in driver seat or water. Its only when you dive deep, hands on the job and ear to the ground that you get a real feel.
All methods work in the market, all indicators too work for they are in vogue because someone was successful using them. Different theories of markets, wave theory, oscillators, harmonics, gann cycles of price and time all work for at least they worked for their originators. All of them shared their knowledge and internet as medium made them viral.
As you as a practice duplicator you didn't really go deep in the minds of these pioneers to understand the nuances of the theory and its applications and also didn't have patience and perseverance of those who invented it. Hence with small disappointments you came to conclusion that it doesn't work. That's the reason why everything works and nothing works.
With all trials and tribulations finally with lots of experimentation you find your way and see light at the end of tunnel. Well its like awakening only to realise that it was such a simple path. What makes the journey interesting is that find yourself or rediscover yourself and of course the riches that follow are a byproduct.
Comment:
SCENARIO BUILDING!
Which scenario will play out, any guesses
Regards
SCENARIO BUILDING!
Which scenario will play out, any guesses
Regards
Comment:
HOW TO DISCERN WHETHER DAY WILL BE TRENDING OR OTHERWISE?
Am posting three Nifty charts on
On daily charts a loose triple top is seen which is peculiar during trend reversals.
On hourly charts M is clearly seen
On 15 minute chart 4 th leg can be clearly seen.
A day is going to be trending when 4th leg of M converge on daily, hourly and 15 minutes time frame. The length of 4th leg can be easily drawn through fib extension or use of parallel channel or trendlines.
The phenomenon of turning of trendlines is another indication of trend reversal. The angle of turning can only be ascertained after completion of retracement which may happen within next few hours or days. The angle also indicates whether move is going to be destructive or slow in nature. Any violent move is always followed by equal reaction ( As per Newtons Third Law)
Convergence of both 20 EMA and trendline touch point is also a start point of an explosive move. Any move emanating from this convergence is going to be a trending move which can be taken as another clue.
Views Welcome.
Regards
Disclaimer - These contents are only for educational purposes only
Am posting three Nifty charts on
On daily charts a loose triple top is seen which is peculiar during trend reversals.
On hourly charts M is clearly seen
On 15 minute chart 4 th leg can be clearly seen.
A day is going to be trending when 4th leg of M converge on daily, hourly and 15 minutes time frame. The length of 4th leg can be easily drawn through fib extension or use of parallel channel or trendlines.
The phenomenon of turning of trendlines is another indication of trend reversal. The angle of turning can only be ascertained after completion of retracement which may happen within next few hours or days. The angle also indicates whether move is going to be destructive or slow in nature. Any violent move is always followed by equal reaction ( As per Newtons Third Law)
Convergence of both 20 EMA and trendline touch point is also a start point of an explosive move. Any move emanating from this convergence is going to be a trending move which can be taken as another clue.
Views Welcome.
Regards
Disclaimer - These contents are only for educational purposes only
Comment:
TECHNICAL ANALYSIS OF NIFTY
NIFTY has convincingly broken the first trendline. Based on the concept of twin trendline it is going for next touchpoint. Based on the previous experiences, price generally takes reaction at the second trendline and spends some time at the trendline.
There are two scenarios wherein it breakout with a strong momentum candle and continues its journey, alternatively it breaks the trendline and retraces and then takes off.
Greater the consolidation larger the move, however with this smaller consolidation can we expect minor bull run? In that case it might not spend much time at trendline.
Someone who has patience for timeline say 2-3 months can buy on every dip or accumulate. Check the leaders in each sectors and invest can reap profits for short term. However whole thing is contingent on second trendline break.
If second trendline break doesn't happen and price keeps fluctuating in between we may see a prolonged neutral phase. This is also likely as there have to be some global triggers for price to really move up. In absence of triggers one can invest selectively in sectors and be stock specific.
Rest que sera sera.
Views welcome
Regards
Disclaimer - These contents are only for educational purposes only.
TECHNICAL ANALYSIS OF NIFTY
NIFTY has convincingly broken the first trendline. Based on the concept of twin trendline it is going for next touchpoint. Based on the previous experiences, price generally takes reaction at the second trendline and spends some time at the trendline.
There are two scenarios wherein it breakout with a strong momentum candle and continues its journey, alternatively it breaks the trendline and retraces and then takes off.
Greater the consolidation larger the move, however with this smaller consolidation can we expect minor bull run? In that case it might not spend much time at trendline.
Someone who has patience for timeline say 2-3 months can buy on every dip or accumulate. Check the leaders in each sectors and invest can reap profits for short term. However whole thing is contingent on second trendline break.
If second trendline break doesn't happen and price keeps fluctuating in between we may see a prolonged neutral phase. This is also likely as there have to be some global triggers for price to really move up. In absence of triggers one can invest selectively in sectors and be stock specific.
Rest que sera sera.
Views welcome
Regards
Disclaimer - These contents are only for educational purposes only.
Comment:
OSCILLATORS - A MEASURE OF MOMENTUM & CYCLICAL NATURE OF MARKETS
Oscillators come in various forms like Stochastics, RSI, MACD, AO, etc. they actually represent the cyclical nature of markets. All indicators are lagging indicators as they follow price. Even to an extent price action too is not an leading indicator as it represents the present. The future movement or prediction is more of esoteric in nature as only few can really decipher the language of markets and its movement.
The studies on future movements can be seen through various theories like Elliot wave theory, Gann angles or through harmonics or Fibonacci levels. All these studies are relevant and valid or are too subjective in nature to interpretation. In retrospect or to the left side of chart they look so simple and clean.
To further simplify the understanding of cycles of markets, I have attempted to measure momentum or cycle of market by using trendline and RSI on different timeframes.
Trendline is the most powerful tool to identify momentum. When a stock is in a down trend draw a trendline, look for first trendline break(Daily Time Frame). Observe if RSI touches 70 levels. The stock is likely to retrace back to the first trendline.
Draw second trendline with the new high being made. Thereafter it will attempt to break the second trendline may be on first or second or third attempt. After crossing the second trendline, RSI will again touch 70 levels.
For positional trades, on daily timeframe charts look for price to have crossed 70 levels on RSI. Add those stocks to watchlist,Chartink is good screener for identifying the stocks. Mostly 99% of times, there is always a reaction from 70 levels of RSI and albeit a minor reaction. Wait for RSI to turn as also price to cross the previous swing high. Take trade.
Break of second trendline and RSI crossing 70 is the first sign that stock has picked up momentum. its like 400m race, wherein first hundred meters race is done. In stock market however the stock takes a breather to gain breath at 100 meters and thereafter resumes the journey.
Draw fib extension to price from bottom coinciding with RSI 30 and top coinciding with RSI 70 levels. First target is 1.618 levels. Sometimes it is seen that price in momentum goes to Fib 2 levels and then gives a reaction and spends time around 1.618 at times retracing back to 1 levels. SL below previous swing low
The journey from 1.618 to 2.618 is the most interesting or at times the most explosive journey. Repeat the procedure of trendline and RSI 70 levels touch to see that stock has completed gasping for breath and is ready to move. It is observed that a strong momentum candle with 4% move and like a marubuzo is the alert candle to take trade. At times index build up and market noise masks the movement wherein it gets delayed or loiters around but moves to those levels for sure. At times its frustrating and time consuming too. The 2.618 is like 300m mark on the 400m race. Just leave the race, book profits and get out. Don't get greedy to capture last 100m upto 4.236 levels for one never knows when the price will turn taking away all your profits.
The same logic can also be applied for swing and intraday trades on lower timeframes. However more stringent rules are required for moves are very fast owing to volatility created with everyday expiry's.
Happy hunting.
Views welcome
Regards
Oscillators come in various forms like Stochastics, RSI, MACD, AO, etc. they actually represent the cyclical nature of markets. All indicators are lagging indicators as they follow price. Even to an extent price action too is not an leading indicator as it represents the present. The future movement or prediction is more of esoteric in nature as only few can really decipher the language of markets and its movement.
The studies on future movements can be seen through various theories like Elliot wave theory, Gann angles or through harmonics or Fibonacci levels. All these studies are relevant and valid or are too subjective in nature to interpretation. In retrospect or to the left side of chart they look so simple and clean.
To further simplify the understanding of cycles of markets, I have attempted to measure momentum or cycle of market by using trendline and RSI on different timeframes.
Trendline is the most powerful tool to identify momentum. When a stock is in a down trend draw a trendline, look for first trendline break(Daily Time Frame). Observe if RSI touches 70 levels. The stock is likely to retrace back to the first trendline.
Draw second trendline with the new high being made. Thereafter it will attempt to break the second trendline may be on first or second or third attempt. After crossing the second trendline, RSI will again touch 70 levels.
For positional trades, on daily timeframe charts look for price to have crossed 70 levels on RSI. Add those stocks to watchlist,Chartink is good screener for identifying the stocks. Mostly 99% of times, there is always a reaction from 70 levels of RSI and albeit a minor reaction. Wait for RSI to turn as also price to cross the previous swing high. Take trade.
Break of second trendline and RSI crossing 70 is the first sign that stock has picked up momentum. its like 400m race, wherein first hundred meters race is done. In stock market however the stock takes a breather to gain breath at 100 meters and thereafter resumes the journey.
Draw fib extension to price from bottom coinciding with RSI 30 and top coinciding with RSI 70 levels. First target is 1.618 levels. Sometimes it is seen that price in momentum goes to Fib 2 levels and then gives a reaction and spends time around 1.618 at times retracing back to 1 levels. SL below previous swing low
The journey from 1.618 to 2.618 is the most interesting or at times the most explosive journey. Repeat the procedure of trendline and RSI 70 levels touch to see that stock has completed gasping for breath and is ready to move. It is observed that a strong momentum candle with 4% move and like a marubuzo is the alert candle to take trade. At times index build up and market noise masks the movement wherein it gets delayed or loiters around but moves to those levels for sure. At times its frustrating and time consuming too. The 2.618 is like 300m mark on the 400m race. Just leave the race, book profits and get out. Don't get greedy to capture last 100m upto 4.236 levels for one never knows when the price will turn taking away all your profits.
The same logic can also be applied for swing and intraday trades on lower timeframes. However more stringent rules are required for moves are very fast owing to volatility created with everyday expiry's.
Happy hunting.
Views welcome
Regards
Comment:
NIFTY WEEKLY TECHNICAL UPDATE
Though nifty showed a bounce, there is hourly trendline resistance which is just 100 points away.
We may expect a reaction there plus there may be more consolidation or pain left with increased volatility. Trendline break will not assure changes in trend.
A box may be formed for extended period of time before actually it breaks the box.
The box likely to be formed at current levels or at previous pivot of 18600 levels
Two possibilities, a V shaped recovery, less chances for lack of triggers. If markets cheer RIL results, RIL can single handedly take the markets up.
Another is delayed recovery with volatile spikes. It will surely form its local HH and HL structure before it actually breaks 19850 the PSH.
How much more pain? The previous pivot corresponding is 18600. Nifty shouldn't violate these levels for there is no fear of recession. India story is still intact. US GDP numbers are also good.
If NIFTY test 18600, keep lots of cash for one can get stocks at a very discounted price. Fed is playing spoil sport actually they are managing the index which spiked crazy after covid.
Have SIP to buy on every dip in small quantities.
Disclaimer : Counter trend treades can be risky. These updates are for educational purposes only
Though nifty showed a bounce, there is hourly trendline resistance which is just 100 points away.
We may expect a reaction there plus there may be more consolidation or pain left with increased volatility. Trendline break will not assure changes in trend.
A box may be formed for extended period of time before actually it breaks the box.
The box likely to be formed at current levels or at previous pivot of 18600 levels
Two possibilities, a V shaped recovery, less chances for lack of triggers. If markets cheer RIL results, RIL can single handedly take the markets up.
Another is delayed recovery with volatile spikes. It will surely form its local HH and HL structure before it actually breaks 19850 the PSH.
How much more pain? The previous pivot corresponding is 18600. Nifty shouldn't violate these levels for there is no fear of recession. India story is still intact. US GDP numbers are also good.
If NIFTY test 18600, keep lots of cash for one can get stocks at a very discounted price. Fed is playing spoil sport actually they are managing the index which spiked crazy after covid.
Have SIP to buy on every dip in small quantities.
Disclaimer : Counter trend treades can be risky. These updates are for educational purposes only
Any motion that repeats itself after an interval of time is called vibration or oscillation. The vibration of a stock involves the transfer of its potential energy to kinetic energy and of kinetic energy to potential energy, alternately. If the system is damped, some energy is dissipated in each cycle of vibration and must be replaced by an external source if a state of steady vibration is to be maintained.
W D Gann had discovered these laws however he was secretive of those for reasons unknown. We with our limited knowledge will try to seek insights on what these laws would be as applicable to stock market. The manifestation of law of vibration on to stock or index can be seen through various modes:-
- Mean Reversion
- Price and Time correction
- Market Geometry
o Price Patterns
o Pitchfork Analysis
- Divergence
- Elliot wave & Twin Trend line Break out
- Reflex point analysis
Will dwell on each on them separately with examples. However if the community have any added inputs on the subject, they are most welcome to comment or share their views.
Regards