Nifty Weekly Elliot,Gann and Fibo analysis

Last Week we gave Chopad level of 6790, Nifty did 1 target on upside . Next week Thursday is a Holiday. Lets analyze how to trade Nifty for next 4 trading sessions.

Nifty Hourly Chart

Nifty Hourly charts has trading near  its 50 HDMA, 6747-6743  will play an important role in coming week,taking support near this level can see bounceback in nifty.

Nifty Elliot Wave Analysis

As per EW analysis multiple possibility are showing correction but a bounceback near

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Stock market movement prior and after Lok Sabha election

In our last post Nifty reaction to Lok Sabha election results we had a discussion on various scenarios which are possible. Lets discuss who can an "Investor" also use the Lok Sabha election event to rejig portfolio.
In an election year, equities usually go up in the run-up to elections, and Market will always give Thumb to clear mandate the trend continues.
Data since 1991 show that equity markets usually go up before general elections. Barring 2004, when they fell 11 per cent in three months prior to the elections, they have risen before all elections since 1991-24 per cent ahead of 1991 polls, 7 per cent in 1996, 6 per cent in 1998, 14 per cent in 1999 and 27 per cent in 2009 as shown in below chart.

The interesting thing is that most of the times the trend

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Inspiring & Motivating story for traders

There was a boy named Masaru in Japan. When he was young, he wanted to learn & master Judo. Unfortunately, he lost his left hand after an accident. He became very sad. When his father saw his condition, he took him to one the Great Masters of Judo in Japan. After thoroughly analyzing Masaru, the Master told him to come from tomorrow for practice.

Masaru became very happy after hearing this. On the first day, the Great Master taught him one trick and instructed him to practice it.
After one week, Masaru came back to the Master and asked for teaching him another trick as had practiced the first one long enough. Master replied him to practice the same trick again & again.Another week passed, months and years passed.

One day, after 10 years of practice, Master informed Masaru that he has nominated his name for the national championship of Judo which will be conducted in Japan, next month. Masaru was shocked after hearing this as he had been practicing only one trick for the last 10 years.
Master told him to be relaxed and calm. One the day of

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Complacency & Exhaustion in trading

Complacency

When I think of complacency two major things come to mind:
Often a traders biggest loss comes after a string of winners.  This is well documented and suggests to me that complacency is present.  The ‘every swing I take is a home run feeling’ or the ‘I can do no wrong feeling’.  Sure enough when in this state the market is all too willing to smash you back down hard as a reminder of your mortality.
The other thing I think of are traders who have taken their foot off the gas.  Who have decided that their approach is the only thing that works and will never need changing.  You have to stay on your toes.  The chances of the same approach working over and over ad infinite are slim.  It may not need a complete overhaul and rather only subtle changes but it is complacent to believe something is a sure thing.

 Exhaustion

Most traders are imminently aware of their

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Nifty outlook for May Series

• FII's bought 49962 contract of Index Futures worth 1710 cores with net OI decreasing by  2 lakh contracts. So on expiry day FII's squared off most of shorts they were carrying as  rollover in the Nifty at around 59% is lower than the three-month average of 65%, indicating FII's sees the risk of taking bullish or bearish bets is far too high ahead of the election outcome on May 16.

As discussed in last analysis in Elliot wave chart of NS  Nifty made an exact high of 6861. Now for Friday Range of 6895-6909 is crucial range as per Elliot wave, Crossing and sustaining the same  nifty can

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Charting and Technical analysis Rules

Rule 1 - If you cannot see trends and patterns almost instantly when you look at a chart then they are not there. The longer you stare, the more your brain will try to apply order where there is none.
If you have to justify exceptions, stray data points and conflicting evidence then it is safe to say the market is not showing you what you think it is.
Rule 2 – You can torture a chart to say anything you want. Don’t do it.
This is very similar to Rule 2 but it there is an important point to drive home. You can cherry pick indicators to justify whatever biases you bring to the table and that attempts to impose your will on the market. You cannot tell the market what to do – ever.
Rule 3 – Be sure you check out one time frame larger than the one in which you are operating (a weekly chart for a swing trader, a monthly chart for a position trader).
It is very easy to get caught up

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Nifty April Expiry Prediction

• FII's bought 26.8 K contract of Index Futures worth 923 cores (31.1 K longs were added  and 4.3 K shorts were added for  Index Future) with net OI increasing by 35.4   K contracts. So today's FII's continue adding longs and also added fresh shorts  Index Futures.

Nifty reacted from the EW target of 6838 and did a day of consolidation by making a low of 6805 and closed well above 6800. Now looking at FII buying in Index futures we can see an impulsive up move if 6800 is not broken, 2 Possibility have been discussed...

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Nifty @ fresh life high, FII FnO data analysis

• FII's bought 11081  contract of Index Futures worth 378 cores (26.3 K longs were added  and 15.2 k shorts were added for  Index Future) with net OI increasing by41.5  K contracts. So today's FII's continue adding longs and also added fresh shorts  Index Futures.

Nifty is entering the demand zone, with hourly charts entering oversold so if 6650-6642 is held we can see a decent bounceback till 6710,6750. During an uptrend market might correct for 2-3 session giving a trend reversal signal but can bounceback equally sharply, This is what we discussed in last analysis and Nifty bounced back fiercely and made a new high today at 6825. Now moving onwards, Any close above

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Trading & Patience

Do you see yourself in any of following mindsets?
Have you ever done or thought anything like this?
If you have not, then please stop reading since you have attained trading mastery and don’t need any words from me:

• No time to wait for setups. It looks like it might work, so I am going to get in now.

• No time to wait for this to play out, I have a small profit and it might turn around and go against me, so I am going to get out now.

• My position went against me, and it looks bad so even though it did not break support and the downfall was on light volume, I better get out now.

The markets are running away without

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Weekly Report - Bank Nifty Technical Research

Last Week we gave Chopad level of 12851 and Bank Nifty did 2 target on downside.Inflation and IIP data both were disappointing leading to fall in Bank Nifty, initial 2 days but a quick recovery in last trading session helped Bank Nifty to recoup losses, We have Expiry in coming week so Lets analyze how to trade bank nifty in next 3 trading sessions.

Bank Nifty Hourly Elliot Wave Analysis

Bank Nifty hourly charts is shown with Short term Elliot wave analysis,Initial Target of this upmove comes around 13118.

Bank Nifty Daily

 

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Weekly Report -Nifty Technical Research

Last Week we gave Chopad level of 6790, Nifty did 1 target on Downside . Next week is expiry week, Traders do not Expiry will happen on Wednesday as Thursday is a Holiday. Lets analyze how to trade Nifty for next 3 trading sessions.

Nifty Hourly Chart

Nifty Hourly charts has closed above its 50 HDMA, also trading in a up trending channel ,  6790 will play an important role in coming week, closing above it new highs are on cards, unable to close above it market will...

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How nifty would react after election results

Money and power collide every five years at the intersection of Indian Stock Market and New Delhi, as India votes for its 15 Lok Sabha, So much is at stake: Indian foreign policy, India GDP growth, market friendly reforms could all undergo radical changes if Modiji wins.
The outcome of the election will also impact the stock market.Some forecast a bull market if a NDA wins lead by Modiji, while other predict that a UPA led by Rahul Gandhi  means stocks will decline.
A savvy trader might see an opportunity to put these theories to the test, based upon who they believe will become Prime Minister of the Great Nation India, If this trader bets on the right theory and the right winner, he or she could position himself or herself to make a lot of cash.
Now as we do not have crystal ball to predict, but as a technical analyst I firmly belive past price action gives an idea what can happen in future, let us see how market behaved in past before/after election result so as to understand market behavior and get an inkling what can happen in 2014.

1996

1996 was a Hung Assembly as Both BJP and Congress did not got majority, BJP got 161 and INC got 141. As BJP won highest seat A B Vajpayee took the initiative to form government, but the government lasted for only 13 days and Janata Dal leader Deve Gowda formed a United Front coalition government on June 1. His government lasted 18 months.


Nifty reaction with Swing High and Low is shown in below

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Nifty Options-What happens on Expiration day?

Many traders will indulge in Option trading especially on Expiry Day to make some quick buck as sometimes Rs 1 Options can jump to Rs 20-30 in matter of time.
During my trading Seminar , general question which most of participants have is

Why do options trade at lesser than theoretical value on the expiry day ?

I have seen trader taking position in Options that trades less them their theoretical value, thinking price will correct End of day and they will make profits but in reality end up making losses Many traders every expiry do not  sell their ITM options and letting it expire(especially which are very close to strike price) or else take trades/strategies assuming that discounted price of option will correct before the end of the expiry day.
Let me explain them with few elaborative examples:
1. Nifty Futures  is trading at 7750 and today is the day of expiry. At around

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Traders should avoid these sinful mistakes

There are things that we do as traders that set us back in our journey to success and lose us money. There are other things that traders do that just destroy themselves. Many of the following things are done daily by the 90% of traders that lose money in the market consistently.If we want to be a longer term winner trading the markets we have to take these lessons to heart and over come our natural instincts by doing the opposite.

• Instead of cutting a loss the trader holds it stressing over it for the rest of the day or a week. This destroys the trader’s mental capital and inflicts completely unnecessary emotional pain. The first loss it the best loss.

A trader that trades their opinion instead of the price action has a lower success rate than someone who just trades price action. The vast majority of

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FII FnO data Analysis for 17 April

• FII's sold 5559 contract of Index Futures worth 197 cores (16.6  K longs were added  and 11.1 k shorts were added for  Index Future) with net OI increasing by 27.7 K contracts. So today's FII's have started entering longs in Index Futures.

Nifty is entering the demand zone, with hourly charts entering oversold so if 6650-6642 is held we can see a decent bounceback till 6710,6750. During an uptrend market might correct for 2-3 session giving a trend reversal signal but can bounceback equally sharply, Weekly closing tomorrow Bulls will like to close nifty above


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Nifty Technical Analysis for 16 April

• FII's sold 30696 contract of Index Futures worth 1028 cores (17.5 K longs were squared off and 13.1 k shorts were added for  Index Future) with net OI decreasing by 4.4 K contracts. So today's FII's have started entering shorts in Index Futures.

Nifty finally broke its up trending channel and closed below it,Nifty is now trading at crucial juncture and any break below 6650 will end the current uptrend. On going correction is good for market as it will shake off weak hands and market can

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Nifty Weekly Technical Analysis

Last Week we gave Chopad level of 6711, Nifty did 1 target on Downside and 2 on upside. Next week  being a Holiday Shortened week, will start with Infosys result and WPI inflation data for March 2014 at 12 noon on 15 April and CPI inflation data for March 2014 also on 15 April at 17:00 IST. Lets analyze how to trade Nifty for next 3 trading sessions.

Nifty Hourly Chart

Nifty Hourly charts has closed above its 50 HDMA, which is bullish in short term.Any close above 6820 will bring back bullishness in market.Breaking 6640 will only bring bears in market.

Nifty Daily Chart

On daily charts, nifty is trading near its up

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All you want to know about India VIX Futures

Volatility is known as a measure of change. A higher value of volatility indicates that prices can change at a faster pace (either going up or down) as compared to the immediate past.
Traders are often looking for new strategies to trade a major event, say a Election Results or Union budget or credit policy or even important results like Infosys. Normally a trader would have bought, what an option trader calls a Long Straddle strategy. In entering this strategy, he would buy a long call and a long put option of the same strike price and same expiry.
In order to earn profits from such a strategy, markets need to move sharply in either direction such that profit from one direction would be more than the loss from the other one. However, the strong following of such a strategy leaves very little on the table (if at all) as prices of both the call and put option rise before the event as they all fear the extreme.
Traders will now have an instrument to earn from such an eventuality. NSE recently launched India Vix Futures for  traders who are willing to bet on volatility. India VIXis a volatility index based on prices of Nifty options.
Before you start trading the India VIX futures contract, here are few points to consider 


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VIX shows market betting on 600-pt Nifty swing on May 16

The India Volatility Index (VIX) has gained 28 percent in the last four sessions. Normally, this would have meant the market had declined during this period. That is because the movements in VIX and the market are inversely co-related, more often than not. But this time around, the Nifty has risen alongside VIX, gaining 3 percent in the last four sessions.

So what’s happening here?

The most obvious explanation is the fact that the market is looking at May 16 Lok Sabha election results as a binary event –  Narendra Modi coming to power thumbing Victory which can move the Nifty by 600 points or more. And traders are either taking guard, or trying to ride the swing with minimum risk.

The biggest example of this was the rise in

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Difference between Trader and Gambler

The vast majority of traders are gamblers, maybe the majority of market participants are in fact gamblers. The traders that are gamblers trade with no plan and without understanding the odds are stacked against them. Whether it is buying far out of the money options with no method for profitability or randomly chasing stocks on a whim, gambling is when you risk money with the odds against you and have no edge. The losses of the gamblers is where the majority of the profits come from to the winning traders in the markets who have an edge.
Now the other side is the traders that consistently win by using an edge that gives them an advantage over the other traders. The winning traders are not trading against the casino they are trading against the gamblers. They have become the casino, like the casino they know the odds are in their favor and they will be profitable in the long run. Like the casino has table limits they have risk management to not over expose themselves to any one bet by

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FII Data Analysis for 11 April

• FII's sold 10381  contract of Index Futures worth 355 cores (10.9 K longs were squared off and 556 shorts were squared off  Index Future) with net OI decreasing by 11.4 K contracts. So today's FII's have started exiting longs.

Nifty again hit a new life high but was unable to sustain gains at higher level and closed below 6800. The way many small and mid caps stock are moving warrant extreme caution as the euphoric moves gives the reminiscent of


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White collar crimes in Indian Financial Markets

Something unique has become evident in India over the past 3-4 years. We have a spectre the mantle of pushing stumbling blocks in front of an on-coming train hitherto entrusted to Babus has now been pushed into the hands of judiciary, election commission and para bureaucratic services like the CAG.
So it is not incredible that the owner of a mutli-faceted business organization accused of swindling unknown people of Rs 31,000 crore has been castrated inside a dingy 6×6. The price of his freedom a measly Rs 10,000 crore.
Now we all have to pay our hotel bills when we leave the accommodation, but this deal should go down in history as the most expensive rental deal ever.I am referring to Sahara Subrato Roy who is currently in Tihar Jail and  Supreme Court has put a condition of 10000 cores as a mandatory requirement  for Bail.
The episode reminds me of the 1992-1994 period and the 2000-2003 period. Both identified with iconic stock brokers

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Nifty Weekly forecast for 8-12 April

Next week seems to be full of events which will be led by first phase of Lok sabha elections which begins on Monday , followed by IIP and inflation data and beginning of the results season with Infosys declaring its results on Friday. Recent Opinion Polls have predicted NDA coming to power, and stable government which has prompted FII's have put 3 Billion Dollar in India. Opinion Polls have gone wrong in 2004 and 2008 so blindly believing them and investing will be a grave mistake. Take the classic example of IDFC last week which after getting Bank License went high of 140 and corrected back to 125, So lesson traders and investor should learn market already factor is events 6 months well in advance and surprise most of market participants with its move. So analyze and trade price only and forget the news. So forget about Nifty hitting 7500 or 6000 but make sure you are part of the move and having trading system will only help you.

Nifty Hourly Chart

Nifty Hourly charts has closed below its 50 HDMA, which is bearish in short term.Any close above


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Why Traders Struggle With Discipline

If there’s a single theme that dominates discussions of trading psychology, it’s discipline.
Traders are routinely encouraged to control their emotions, stick to their processes, keep journals, whatever.  If you lapse in your trading, it’s because you’re not sufficiently disciplined.  Call it the puritanical approach to trading: if you don’t stick to the straight and narrow, yours is a failure of willpower and commitment.
Research provides us with a different picture, however.
Willpower is a limited resource, tied to glucose levels in the

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Indian Stock Market :Most Expensive in BRIC Pack

The Indian market is more expensive than its peers among emerging countries, with indices tracking these nations showing a lower multiple of earnings than India.
The Morgan Stanley Capital International (MSCI) India index is trading at a price-to-earnings multiple (or P/E) of 17.72, according to Bloomberg data. This means that investors are valuing it at nearly 18 times its annual earnings. The equivalent figure is 11.99 for the MSCI Emerging Marketindex.
India’s earnings multiple is also the highest amongst the BRIC pack, an acronym for major emerging market economies encompassing Brazil, Russia, India and China. Brazil is trading at a P/E of 15.48, China at 8.98 and Russia at 4.73.
The premium has also risen if one looks at other valuation indicators such as those measuring price as a multiple of the companies’ assets or book value (P/B), or in relation to profitability measures such as its return on equity (ROE).
In fact, the relation between price/book and ROE for

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FII Data analysis for 04 April

• FII's sold 3481  contract of Index Futures worth 122  cores (1.7 K longs were squared off and 1.7 K shorts were added  Index Future) with net OI increasing by 79 contracts.

Nifty made a new life high again today 6676 10 day in a row.Nifty today was unable to form higher low formation but took support at the rising channel as shown in below chart. Nifty today formed  Hanging Man candle stick fourth day in row, which is bearish if 6700 is  broken tomorrow. 6765 is very important number to be watched any

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Nifty trades at record highs, FII F&O Data Analysis

• FII's bought 6081 contract of Index Futures worth 225  cores (7.6 K longs were added  and 1.5 K shorts were added  Index Future) with net OI increasing by 9229 contracts.

Nifty made a new life high again today 6763  ,and closed above its trendline. Nifty formed again today Hanging Man candle stick third day in row, which is bearish if 6720 is not broken.Today is 9 day in a row Nifty has closed in green with index rallying 830 points, the kind of straight line rise we are seeing is not healthy for market, as it shows over enthusiasm and any kind of disappointment will be met by fast and furious fall. Traders holding long either maintain a strict SL or square off the position and sit on sideline. 6765 is very

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