What Is India VIX & Its impact on the Market Q: What is India VIX?
Ans) India VIX, or India Volatility Index, measures the market's expectation of volatility
over the near term. It is often referred to as the "Fear Gauge" as it indicates
the level of fear or risk in the market.
Higher VIX values indicate higher expected volatility,
while lower values suggest lower expected Volatility.
Q: What does a High India VIX indicate?
Ans) A High India VIX indicates that traders expect significant volatility
in the market. This often corresponds with market uncertainty or fear,
possibly due to Economic Events, Political instability, or other factors that
might cause large price swings.
Q: What does a L ow India VIX indicate?
Ans) Low India VIX suggests that traders expect the market to be relatively
stable in the near term. This typically corresponds with periods of market
confidence and lower perceived risk.
Q: How do major events affect India VIX?
Ans) Major Events such as Elections, Economic Announcements, Geopolitical Tensions,
or Natural Disasters can significantly impact India VIX. These events often lead to increased uncertainty and Fear, causing India VIX to spike as traders anticipate greater market volatility.
These are some of the Basic information about the India VIX and its impact on the Market
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What you need to become a successful trader?here we have discussed what are the important things that you will need to become a successful trader.
1. Techinical Analysis Skill: Understanding the chart behaviour;
Price
Volume
Support and resistance
Trendlines
2. Risk Capability
How much money you can afford to lose on a single order, and on a single day.
3. Peace of Mind
Are you having a thought that might disturb your trade making decision. You must
have a calm and peaceful mind for being a successful trader.
4. Trade Managment
Trade management is the skill that gives you the power to make intelligent
decisions based on the analysis of which point is the best point to enter and
exit from the trade.
Understanding patterns - PART 1Patterns have been in use for as long as technical analysis have existed and are working today also, traders all over the world try to find patterns in chart to anticipate the possibility of the next move for any Index or stock. Pattern have a reason for working this greatly because all the patterns have an underlying psychology behind it and all these are driven by none other than the human emotions that lie behind them.
What are patterns?
According to John J Murphy "Price patterns are pictures or formations, which appear on price charts of stocks or commodities, that can be classified into different categories, and have a predictive value."
Putting it simply these are formations of candles which take a special shape when seen together and give you an idea of the future possible move of any script.
Why do patterns work?
Patterns work because they are the depiction of human emotions in the market and clearly shows what the traders in the market want a stock or commodity to do in a particular timeframe, now it must be odd and you may be thinking that how can a simple pattern or movement of the candles can tell you what is going inside the minds of people. Let me give you an idea so that you understand what is it that I mean by reading the minds of the traders using pattern and understanding what they want a particular stock or commodity to do.
The chart that you see above is hindalco which is listed on NSE.
To understand this let me tell you about the white lines you see, these are called trendlines and are made by connecting highs to highs or lows to lows to get an idea of the trend on current ongoing move or to make a pattern.
The pattern you see above is called ascending triangle pattern and is a bullish structure that when gives a breakout the stock or commodity gives a run for the upside.
Now the answer to the the question why ascending triangle pattern is bullish and how we get to anticipate the future movement lies in the human emotion or psychology that made this pattern in the market and it will also explain how you understand the human emotion in the market depicted as pattern.
This ascending triangle pattern is made by joining two line which I have named as trendline 1/resistance & trendline 2/support.
Trendline 1/Resistance shows us that the bears are not willing to let the price go beyond the levels of 470 and are shorting the stock near that price. Bears are wanting the stock to remain below the 470 price level.
Trendline2/Support tells us that the bulls are buying the stock on higher prices again and again that's the reason the trendline is inclined, bulls are wanting the stock to go up.
Now all of this tells us that right now bulls are more aggressive than the bears as bears are not willing to short below the price of 470 but bulls are ready to buy the stock at higher price and are the reason the price keeps surging up.
There comes a time when both the lines meet and there is no buffer space left between buyers and sellers and the price can now only go in single direction now, so bulls being more aggressive breaks the resistance of 470 and the price moves above it. Now there are two things that are going to happen:
1. More buyers will come in to buy as the resistance is broken making the price rally even more.
2.Short positions will have to be covered for, which will yet again make the price move up.
So that is how a mere pattern of a triangle joined by two line made you see the emotions of the traders inside the market and thus anticipate the future movement of price. Now this concept applies to all of the patterns there are in the market, some will be as simple as this one while others being more complex but all of these will make you a better trader letting you anticipate the movement.
This was the end of Part one of this series in which I'll be trying to make you understand patterns and trade more effectively using them.
The Next part will be the two main categories of pattern which will be in more depth and will actually help you anticipate the prices and add these pattern into your trading style.
If you have read it far enough so please give it a like and do follow me for the next part which I'll try to drop on the next weekend.
Why I am bullish on Airtel - Macro trend analysisThis is a long-term analysis for the telecommunications giant - Bharti Airtel .
There are two primary market trends in the broad perspective :
1. Uptrend/downtrend
2. Accumulation/ Distribution.
The accumulation phase is the boring phase , when smart investors accumulate positions and get in early. the uptrend/mark-up phase is the euphoria phase when the retail market participation increases, indicated by surge in volume, and smart investors slowly start unloading their positions, until the uptrend momentum has subsided, followed by a new accumulation phase and another possible mark-up, or a distribution phase followed by a downtrend, which is also known as a bear market. Till the time price has moved away from the range it has been trading in, we do not know whether the range is accumulative or distributive in nature.
As you can see in the chart, Bharti Airtel has been in an accumulation range for more than 10 years, and it seems as though we have finally successfully managed to break away from the range to the upside. The longer a stock has been in accumulation, the stronger the momentum once price breaks away from the range.
Let us see a stock that has done something similar. It is none other than, Reliance Industries .
You can clearly see how quickly the trend progressed after leaving the accumulation range.
Key takeaway points from the analysis and comparison
1. Airtel has been range bound for a longer period of time as compared to Reliance. This implies that Airtel has spent more time in the accumulation phase.
2. Airtel broke out of the range in early 2020, but threatened to fall back into the range, only to deviate back above and hold the range-high as support for several months. Deviation and reclaim as support is considered a strong bullish sign, indicating that buyers are stepping in to defend the range high as support.
3. Reliance never back-tested its range high as support before its second mark-up phase. Airtel back-testing range high as support is giving buyers more confidence that the stock is ready for price-discovery mode.
4. Volume analysis - Airtel has a better volume profile, with depleting low volume during accumulation phase and a surge in volume upon breakout attempt, and is showing continued volume strength. This setup was not seen in Reliance.
Conclusion
With this we can conclude that Airtel is giving us a nice bullish setup for a long term trend change shift and tackling new all time highs. The Indian stock market has been in a bull run ever since the year 2000, with corrections along the way (two major corrections in 2008 and 2020). As long as this macro bullish structure of the Indian market continues, we can expect Bharti Airtel to perform strongly in the coming years and have a similar run up as compared to Reliance Industries.
Thank you. Do leave a like/comment if you enjoyed the analysis.
Note: This is not financial advise. It is for educational/entertainment purposes only