Monday, November 30, 2009

Outlook for December 2009

  1. The Overbought Level is 5354
  2. The Oversold Level is 4117
  3. The Monthly Phantom Price Line is at 4736
  4. Favorable Conditions for a swing are building up
  5. The Monthly Biased Stop & Reverse Point is at 4450
  6. The 14 Monthly TRIX is at 4071
  7. A mild to moderate correction would easily take Nifty into the region of 4071 - 4450

Saturday, November 28, 2009

weekly outlook

  1. The Biased Stop & Reverse for Investors is at 4814.50
  2. The Overbought Level is at 5201
  3. The Oversold Level is at 4704
  4. The Phantom Price Line is at 4952.90
  5. The 14 weeks TRIX is at 4908.05
  6. Nifty has to close(weekly) above 5156 for the uptrend or below 4660 for downtrend
  7. The important Pivots between Oversold and Overbought levels are:
    4704, 4757, 4799, 4858, 4894, 4953, 5011, 5047, 5106, 5148, 5201
  8. Nifty might fall below 4000, before continuing it's uptrend, in coming months
  9. So, Get Ready to Get Rich, there won't be a second call

Thursday, November 26, 2009

A letter from a friend...

Asalam Valekum Bhaloo Bhai :) today i have completed 3 months of testing with real money for 322/1364 as we discussed last time , i was trading with 2 mini nifty 1 lot I use to cover on 100 pts and another on crossover stop loss for both of them was crossover so the results are for the first one : it's -10 pts ( where i was covering @ 100 pts ) and for the second one it's : +285 pts :) i was purely following the crossovers no ADX, PSAR , and RSI , kuch nahi 100% mechanical trading in October i also got 3-4 whipsaws in a row where i was down by -350 pts but then that mega move came in Nov first week and i got +275 in one single trade at one point this trade was giving me +500 pts but i dint touched it as i wanted to test and follow this system without using my brains and emotions i have written records or each trade that i took and i have gained much more confidence now form the above data i think doing only crossover to crossover will be best , it's a trend following system so we need to let it run freely to gain maximum profit from this so now i am starting with one big nifty and doing only crossover to crossover aapka 6 mahine meh double is proved as this have given 50% return in 3 months :) also ur saying BE CONSISTENT is proved sirji after seeing the results i am getting the urge to start with 100 nifty ...aap kya bolteh hai i am entering next level with this system, ur advice and guidance based on above data will be very helpful

Sunday, November 22, 2009

weekly outlook

  1. The Weekly Overbought level is 5200.50
  2. The Weekly Oversold level is 4716.30
  3. The 5 EMA Weekly is at 4958.40, Triple Smoothed Exponential Moving Average is at 4895, 29 Weeks SMA is 4594
  4. The major Pivots for the week are: 4768, 4808, 4866, 4901, 5015, 5050, 5108, 5148
  5. Nifty is struggling to regain it's uptrend
  6. This week Nifty has to close above 5138 to regain it's uptrend
  7. Nifty could move violently in either direction in coming 3 - 4 weeks
  8. Gold has touched $1150, now just $50 away from the target given at $739 on my previous blog International Economic Review,(Where are my baiters?)

Saturday, November 21, 2009

Thursday, November 19, 2009

Midweek Outlook

  1. Stop Loss for Longs is at 4994, for Thursday, and 5010 for Friday
  2. Traders looking to go short could try if Nifty Spot goes below 4994, keeping 5080 as Stop Loss
  3. There is just a possibility of a minor correction as Nifty isn't truly overbought
  4. The supports are placed at 5020, 4999, 4957, 4902

Sunday, November 15, 2009

weekly outlook

  1. The Weekly Overbought Level is 5160.90
  2. The 5 EMA Weekly or Phantom Price Line is at 4911.40
  3. The weekly Oversold Level is 4662.0
  4. The 14 Weeks Triple Smoothed Exponential Moving Average is at 4882.35;
  5. Nifty made a low of 4538.50 on 3rd Nov and a high of 5017.90 on 13th of Nov; thereby as long as it is above 4834.75 it is bullish and the VIX is likely to remain rangebound
  6. Some Important Pivots to watch for this week are: 4822, 4854, 4874, 4936, 4957, 4978, 4999, 5020, 5041, 5062, 5124, 5144, 5176
  7. Exit Longs initiated at 4786, and initiate fresh shorts around 5176.

Thursday, November 12, 2009

Nifty 21000 in 7 years

If Nifty breaches 5479 in coming weeks, then surely we are in the Primary Wave III, and the target would be 21000 within 7 years. Will elaborate later.

Back in 1989 when Sensex was at 750 I had predicted it would touch 2000, while sitting at my broker's office, everybody had a hearty laugh. But when Sensex finally did, those same people came to touch my feet; while at a social function in March 2002 I had predicted that we are going to have Sensex at 10000 ( Sensex was hovering around 3200), people had thought that I had finally lost my mind, and stopped inviting me to social events. When it finally did, I was invited by the senior-most titans of Export Promotion Council for Software and IT in order to time their respective IPOs and that's when I got the break to work at the wall street; meanwhile I am happy that at least SN Vaish ji had guts to use poor language against me; but be warned I would not let anybody touch my feet this time around

Monday, November 9, 2009

weekly outlook

  1. Below 4616.60 Nifty would be Oversold
  2. Critical Supports in Oversold Region are placed at 4588, 4548, 4512, 4432
  3. Major Pivots above Oversold Level would be 4670, 4712, 4771, 4808, 4867
  4. Keep buying on dips, with proper hedging and money management
  5. Do Keep Referring to Monthly Outlook, as often as you come here
  6. Here is the link for Alan Farley and Dummies Book

Sunday, November 8, 2009

Week in Charts

Although these charts were meant for a certain forum, but it seems that forum is crumbling under the weight of some big personalities. So here are they:

Saturday, November 7, 2009

Overbought Oversold and Mastering the Swing Part I

  1. Overbought:
    • A stock or commodity market condition where there has been significant trading bidding up prices to higher levels, levels which seem overextended
    • In technical analysis, it is a market in which the volume of buying that has occurred is greater than the fundamentals justify
    • A technical opinion that the market price has risen too steeply and too fast in relation to underlying fundamental factors
    • A technical condition that occurs when prices are considered too high and susceptible to a decline. Overbought conditions can be classified by analyzing the chart pattern or with indicators such as the Stochastic Oscillator and Relative Strength Index (RSI). A sharp advance from $15 to $30 in 2 weeks might lead a technician to believe that a security is overbought. Or, a security is sometimes considered overbought when the Stochastic Oscillator exceeds 80 and when the Relative Strength Index (RSI) exceeds 70. It is important to keep in mind that overbought is not necessarily the same as being bearish. It merely infers that the stock has risen too far too fast and might be due for a pullback.
    • A term used to describe a market or a stock that has appreciated so rapidly and has generated such excessively bullish sentiment that a near-term decline is highly likely
    • A physical asset or futures contract whose prices have been pushed up to a level that some believe is unrealistically high and cannot be sustained ie. when the speculative long interest has rapidly increased and the speculative short interest is sharply reduced
  2. Oversold:
    • A term used to describe a technical opinion of a market has declined too steeply and too fast in relation to underlying fundamental factors
    • An analytical term for a stock that is underpriced
    • a condition of the marked after an abrupt recession. In this situation a correction rise is possible
    • A technical condition that occurs when prices are considered too low and ripe for a rally. Oversold conditions can be classified by analyzing the chart pattern or with indicators such as the Stochastic Oscillator and Relative Strength Index (RSI). A sharp decline from 30 to 15 in 2 weeks might lead a technician to believe that a security is oversold. Or, a security is sometimes considered oversold when the Stochastic Oscillator is less than 20 and when the Relative Strength Index (RSI) is less than 30. It is important to keep in mind that oversold is not necessarily the same as being bullish. It merely infers that the security has fallen too far too fast and may be due for a reaction rally.
    • The reverse of overbought. A single security or a market which, it is believed, has declined to an unreasonable level
    • A market which has fallen too far and too fast under excessive selling pressure and is expected to move back to a higher, more neutral level
    • Used in the context of general equities. Technically too low in price, and hence a technical correction is expected. Antithesis of overbought
    • A physical asset or futures contract whose prices have been pushed down to a level that some believe is unrealistically low and cannot be sustained ie. when the speculative long interest has been drastically diminished and the speculative short interest increases.
    • An equity (or market) that has gone down to which its valuation seems to support buying of the stock.
  3. Swing Trading:
    • Opposite of daytrading. Swing Traders speculate longer term on prices of stocks, futures, etc.
    • This term is typically used to imply a style where one takes a position for several days to a few weeks. A swing trade might be completed in less than a week, or if the stock consolidates it might take several weeks. While a swing trader will watch the market very closely, this style does not require the trader to be in front a computer screen while the market is open. A swing trader will typically aim for a 10-15% profit on all trades.
    • Swing trading is commonly defined as a stock, index, or commodities trading practice whereby the instrument is bought or sold at or near the end of an up or down price swing caused by daily or weekly price volatility. A swing trade position is typically open longer than a day, but shorter than trend following trades or buy and hold investment strategies. Swing traders engage in prospecting changes in an instrument's price caused by oscillations between its price being bid up by optimism and alternatively being bid down by pessimism over a period of a few days, weeks, or months. Profits can be sought by engaging in either Long or Short trading
    • Identifying whether a market is currently trending higher or lower, or trading sideways and when this will change is a challenge for many swing trading and long-term trend following trading strategies
    • Swing traders do not need perfect timing - to buy at the bottom, and sell at the top of price oscillations. Small consistent earnings that involve strict money management rules can compound returns significantly.
    • Most important is to understand that there is no foolproof mathematical model or algorithm that will always work so only use them as research tools not decision making engines.
  4. (courtesy: google.com; wikipedia.com)

Thursday, November 5, 2009

views for thursday

  1. Nifty is in downtrend
  2. The 5 EMA is at 4722
  3. The Oversold level is at 4621
  4. Pivots above Oversold Level are 4698.60, 4683.80, 4659.80, 4642.80
  5. The important support below OS level is 4593.40
  6. The SL [SAR] for Shorts is 4786 [again a coincidence]
  7. I have received a lot of mail regarding the SAR, I have already written everything in the article, some people attach their own names to it like Tom's Swing; Dick's SAR, Harry's Levels, don't get fooled, the underlying theory remains the same. I have spent nearly 23 years in this arena, and don't have a small ego or mind, so I would call somebody else's theory as his and not mine. And don't forget, Late Mr Jesse Livermore committed suicide, after loosing everything in stock market and Late Mr W D Gann's chief source of income came from conducting seminars and courses on trading, his son worked as a banker in California, rest is all lie. But don't get discouraged, as long as Mathematics is around, we shall overcome! (And it doesn't mean that I am greater than those legendry figures)
  8. .

Wednesday, November 4, 2009

views for wednesday

  1. HE's Most Merciful, indeed
  2. Nifty would be oversold below 4630.90
  3. The Supports below are at 4620, 4604.40, 4590.50
  4. The Stop & Reverse Point is at 4853.65, (Stop Loss for Current Short Positions & entry point for Next Long Positions)
  5. FIIs sold this time, and DIIs bought, while Nifty fell 190 points!

Tuesday, November 3, 2009

Views For Tuesday

  1. I begin this new chapter with The Name of God, Most Merciful, Most Beneficent
  2. The Oversold level for the day is 4720
  3. Supports below are placed at 4710.30, 4695.90, 4683, 4664.60, 4654.30
  4. Stop & Reverse Point is at 4867 (Stop Loss for Current Short Positions & entry point for Next Long Positions)
  5. The 5 EMA is at 4810.70, and 7 EMA is at 4849.50

Monday, November 2, 2009

Late Mr W.D. Gann's Stop And Reverse Concept

Definition:

A stop and reverse (often known as SAR) is a type of stop loss order that exits the current trade, and either simultaneously or immediately afterwards, enters a new trade in the opposite direction. Stop and reverse orders combine elements of trade management and risk management, and are used in place of regular stop loss orders.

When Are Stop And Reverse Orders Used?

Stop and reverse orders are used when a trader wants to reverse their position (hence the name stop and reverse). For example, if a trader is in a long trade, and wants to exit the long trade and enter a short trade at the same price, they would use a stop and reverse order. The same task could be accomplished manually (i.e. placing an exit order, followed by an entry order), but stop and reverse orders are more efficient as they can combine the entry and exit into a single order.

How Do Stop And Reverse Orders Work?

Stop and reverse orders not a standard order type, and are not offered by many brokerages or any exchanges (that I am aware of). Therefore, stop and reverse orders are usually implemented by the trader's trading software (order entry software), and therefore their implmentation can vary significantly, but with the same end result (a new trade in the opposite direction). If a trader's trading software does not offer stop and reverse orders (many do not), the trader can create a stop and reverse order by doubling the number of contracts (or shares, or lots, etc.) in their stop loss orders. For example, if a trader is in a long trade with one contract, a stop loss order that is placed for two contracts will function exactly like a stop and reverse order. Note that stop and reverse orders are not related to the Parabolic SAR indicator, however, a trader that is trading using the Parabolic SAR indicator may use stop and reverse orders in their trading.

Also Known As: SAR

(courtesy: about.com) Mr Gann calculated SAR from the previous two trading days data. If Downtrend, he would use the Highest High of previous two trading days as SAR, if Uptrend he would use previous two trading days' Lowest Low as SAR. I would use it in conjunction with the multiple band analysis, and the Normal Probabality Theory, that I had been using hitherto. I hope this refinement brings you and me profits unimaginable...and this is what trading is all about...isn't it? P.S. I am currently considering designing an RTOS for doing Technical Analysis on the fly. Anyone worked on Scientific Linux? I am also looking at the codes of OpenBSD, MINIX and various other Linux Distros.

Sunday, November 1, 2009

views for November 2009

  1. The monthly overbought level is at 5207.80
  2. The Pivots below it are 5075, 4971, 4897, 4824, 4734
  3. The Monthly 5 EMA is at 4587
  4. November and December would present us with some good buying opportunities
  5. There are no indications of an impending crash
  6. Important Trade Pivots For Setting Targets are as following:
    • 5148
    • 5127
    • 5110
    • 5093
    • 5069
    • 5023
    • 5000
    • 4980
    • 4968
    • 4952
    • 4936
    • 4898
    • 4865
    • 4808
    • 4715
    • 4676
    • 4605
    • 4573
    • 4514
    • 4436

weekly outlook

  1. Nifty is seemingly in a swing mode
  2. The Oversold Level is at 4655.90
  3. The Supports below are at 4628.20, 4588.60, 4553.40
  4. The Weekly 5 EMA is at 4903
  5. The Pivots above Oversold Level are 4708.90, 4750.50, 4808.90, 4845
  6. Pay attention to 4786 (Coincidentally it has 786 in it!!!), nifty would move wildly below it
  7. FIIs and DIIs were net buyers on Friday, ending the month net flat!(bought=sold)
  8. The Month opening was at 5087; shows that retail has sold short
  9. The trend remains up as long as 4350 is not breached