Nifty in another sideways correction

A friend of mine who shorted 4000 was getting worried
I guaranteed him 13 hour ema would come :)
Natural area for price/time balancing acts.
Came today

Unfortunately i cannot guarantee 3920 or 3820.
Thats the reason why today I hedged the 3900 put taken for 27 with short 3800 put for 15.
wave c or wave3, the eternal debate.
Also intraday i will prefer to trade the long side of the market, that is another way of being hedged. So today traded sbi/utibank long for small moves.
Tomorrow will try hcc/maruti/mnm/ipcl/tatatea.

If this is a sideways move then 3980-3975-3971 supports
gap up near 3900-3920 is a very strong support area which is my first target zone for the downside.
If bulls keep pushing then from 3980 they can attempt 4040-4080-4140-4184
All kinds of interesting possibilities are there.
if We go 4080++ then 3980 would become a key level.
Check sensex, I believe it has still not broken 0.618
Thats what we call divergence.
Check bank nifty has not even staged a breakout
More divergence.
Check autos?
U see a breakout there?
Maybe a bottom is forming, true near 52 week lows
+ 13x earnings , But the bottom is not even confirmed yet.
Maruti watch for triangular bottoming action support near 755
Breakout only above 800++
But if the trend is your friend.
Then every single ema in maruti is lined down
Indiacement did 174 walaa target. Now support at 168-165 , next target is at 188 then 200, At 200 might be a short 50% retracement of full decline from top to bottom.

Lots and lots of bullish calls have worked like magic.
jetair 606-616-626 buy area started from the dip stop held
worked its way up to 645-665 target zone
tatatea 622-700 almost today stop held target hit
indcement 158-156 buy area worked its way up to 174 stop held on closing basis target hit
rcom 404-408-410 buy area worked its way up to 434-441, narrow stoploss broken but not on closing basis, wide stop held, target hit
ipcl above 280=300-314 hasn't given the pullback entry, 284 is pullback buy area.
Then again a long time ago: Ipcl i gave the buy near 5x p.e @ 230 went slightly lower first but target for investors was atleast 290 within few months. Already done, now time for bonus till 314-350 as long as 280 is being held.

Check out hcc on fundas
I think it must be near value zone now
A very long time ago
I mentioned a funda report said hcc was worth 85-100
This was when hcc was at 160
No one bought the theory
The slightly weak results came
stock broke support
has underperformed since
Now
its at funda value
Stock is breaking res near 98.8 V shaped bottom don't be in a rush to buy, some good news is coming, pullback to 94-95 possible sl for traders=close under 90 or so
Target can be huge 120-130 easy
V bottoms btw are rare
u wanna see some consolidation after the V shaped bottom is done
either a sideways move(cup and handle) or a pullback(inv hns)
Infact the stock might not even do a deep pullback if its forming a cup+handle.
Might just hover around 98.8-100 and then break up much higher.

Elder tripple screen = impulsive

Elder tripple screen impulse system
Monthly=chart flat consolidation mode long or short
Weekly=Impulse above 3900 long only!! (last time our short trade at 3900 worked out because we had the weekly trend on our side)
Daily=impulsive
meaning all dips to 13/21 ema =buying opportunities (13/21 ema reads 3840-3820 spot)


So on a purely technical foundation the short trade I guess is not even allowed :D.
Reason even though monthly chart says one can trade long/short, daily+weekly only allowing long trades!! (standard levels 3900 ka breakout hai na)
Then again trading long at 3556 on the way down was not allowed either and we got away with doing that. SL as always on option trades is price of option.
Legin agar aap ko tension hai then SL for put can be kept above 4100 spot or 15 rs I guess.
If it goes under 15 its probably going to 0 anyway.
Also as a hedge one can short 3800 puts for 15.
IF nifty goes 4100+ then take the 15 rs loss on the 3900 puts
and let the 3800 puts sold near 15 expire worthless. Net loss=near zero.
Thats assuming we don't do psychosis=4100 then 3760 :)).
Just do the math before you take a position.


In 2004 first rally or failed 5th whatever you want to call it did 0.7 retracement of initial collapse before the killer downswing game and of course all mechanical systems were long at the top near 1931 before the may crash came.
Anyway the corresponding 0.7 level reads 4040.
Nifty intraday swings seem to be targetting 4040-4084 right now.

support at 13-21 hour ema 3960-3920 for a quick cover for people who took the put and are now having second thoughts.
For those who can handle losing the 30 rs for the 3900 put.
Can hold; if we touch 3900 any time before expiry the puts will double.
Mind you my last 3 options calls have doubled. I can't be right all the time now can I. The odds don't favour it.


Is there any reason to short not really
:)
It all depends
Is this w3 or wc?
if this is w3 then new highs for nifty coming target 4186 immediate, 4440-5000 for impulse

bulls took out 3980 like it was too easy for them.
Interesting point sensex has not yet taken out its 0.62 level 138xx or so.

if market visits 4080 first then dip to 3980-3920 will probably get bought
Anyway time decay will kill the put position very quickly.
So look for exits within 3 days. Your position will have lost half its value from time decay within 5 days.

My option calculator values 3900 put at 30+
Stock:NIFTY-I Date:4/16/2007
Stock Price=4005.15
Strike=3900
Trading days to expiry:10
Volatility measured over200 Bars
Volatility=0.243506
Call=148.288
Put=31.8572
with 10 days left put=worth 30 rs
with 5 days left
Stock:NIFTY-I Date:4/16/2007
Stock Price=4005.15
Strike=3900
Trading days to expiry:5
Volatility measured over200 Bars
Volatility=0.243506
Call=126.57
Put=15.7756
put will be worth only 16 rs even if market only goes sideways and stays at 4000. (If nifty is up near 4200 after 5 days put would be worth damn near 0 :D)

So PLAN ACCORDINGLY

If nifty is near 3900 with 5 days to expire the put will still be worth 60
So I am planning to hold for my 2x target atleast!!

Right now market seems to be not very interested in 3900 puts since we have just staged a breakout
I managed to get them for 27.
When fair value is closer to 32.

Need a downside bout of volatility to make money
3920 gap fill bhi chalega for a small profit
just give me the gap fill before friday!! :))
If nifty expires at 3900 next week with a gap fill puts would be worth 0!!

Watch the upper channel

Nifty future hits upper channel
3953, check max traded volume of nf right at day open with gap up
Some profit booking is going to come in over next 2-3 days

Suggesting nifty 3900 put april for 30 target 60-100-160
sl=price of put


NIFTY-I, Analysis Date:4/16/2007 11:53:59 AM
Close/cmp:3966.2
Swing : Up=Buy ( 2.000% sensitivity)
T1:3813.54 T2:3953.54
T3:4180.03 1xR:4220.95
SwingHigh:3,904.0 CMP:3,966.2
SwingLow:3,542.1 SLPivot:3,587.1
2xAtr14Stop:52.0756
Narrowsl:3,587.05
WideSl:3,390.54
Lower Chan:3623.13 Upper Chan:3970.19
ResLine:4406.74

A note of caution
Some stocks will make new highs
divis/abb/lt/bhel/reliance type stuff prime candidates for new highs.
tcs 1260-1388-1440 possible

There are some stocks which are just breaking out right now
ipcl above 280, 300
mnm above 745-768-780-800
tatatea just took out 648 opens up 700-720
rcom above 434 can do 458
Been bullish from 408-410 13/21 ema consolidation there

So there is lots and lots of stuff that is mega bullish.
Look to buy the breaks. Just be wary @ nifty 3981.

Also keep in mind.
sustaining above 3900 means we are in for a mega mega bull move
possibility of that fresh new impulse target 4240-4440 region

only rbi can spoil the party now it seems.
S&P CNX NIFTY, Analysis Date:4/16/2007
Close/cmp:4012.6
Swing : Up=Buy ( 9.000% sensitivity)
T1:4437.52 T2:4983.21
T3:5866.03 1xR:4516.4
SwingHigh:4,035.6 CMP:4,012.6
SwingLow:2,878.7 SLPivot:3,554.7
2xAtr14Stop:163.922
Narrowsl:3,554.70
WideSl:3,256.57
Lower Chan:3696.49 Upper Chan:4567.27
ResLine:4851.07
This is the flat correction
Which i talked about
a long time ago
3556-3656 if it holds
w5 could be left

But seriously
who is seeing a new high right now?
4440 anyone??

Post mortem of an old post+looking ahead

Market is now in the 5th lap of the hypothesized move http://fnocharts.blogspot.com/2007/04/trying-to-climb-slippery-slope.html

Now most of you would be thinking that with the ability to see 2 steps ahead of the market, one should be making a killing in the market?
a) I am not always right , Market could prove me wrong even right now by doing an extended 5th wave of sorts
b) I don't trade all my trade setups.
c) I don't trade the right setups (i.e Rs filtering, I know it in theory but it is not trading instinct for me yet)
Anyway the fundamentals at this point in nifty do not make me worry about a central extension.
Worst case for bulls rally is c wave, full retracement+reversal
Best case very mild dip till 13 ema+first gap fill
Average case=50% retracement.

'Gurus by definition are so busy trying to figure out the what the market will do in the future that they do not have time to trade the present'
T.H. Murrey
I will try to work on that part
Will take the 3900 puts.

P.S I just posted 3-4 posts over the weekend
Scroll down read em all!!

What goes up must come down?

Vision1=Iron man goes into the stratosphere gets hit by a nuke
Two interpretations possible
a) Armageddon: Index gonna crash. Thats what I was leaning on earlier. May 2004/2006/2007 would fit in nicely with time cycles.
I was even suggesting may puts for a crash possibly below sub 3600 levels.
For april the reasonable target would be gap fill 3800 region.

b) Steel/iron stocks gonna crash
I didn't post this earlier because it was a bit too absurd
but now that my good friend has posted some news
some lafda in steel stocks possible, rhetoric by govt regarding raising taxes or lowering duties?
Anyway the reality is always more important than dreams
Keep in mind 'what goes up must come down'. This is especially true for cyclical industries. Not as true for IT stocks which have not run into growh ceilings yet.
P.S even large cap IT is trading at upper end of valuation band near 30x trailing. 25x is value for something that grows at 30% per year.

Perhaps a suitable adaptation for the stock market is
what goes up a little will come down a lot 0.382/0.5/0.618 of the way usually. (w2 retracement usually)
what goes up a lot must come down 0.236/0.382/0.5 of the way. (w4 retracement usually)

Look at tisco , res region 512-520, support 490, above 520 can try 526/540/600.
Tisco is the weakest of steel stocks, has been weak ever since acquisition.
Sail would have a false breakout of a 52 week high if it starts closing under 120
Also it is near monthly upper channel/t2 125
The upper channel actually reads 135 or so so it looks like the stock can inch up a bit more.
Anyway you can wait for the top to form. Short below the trendline or whatever techniques you like. There will be shorting opportunities in steel counters soon.
I've actually been trying to short tisco since 500 with 0 luck.
A friend of mine has been using his 'magic level' near 512 to short with a bit more success.

Vision2=Ghost army comes to fight
Old supports=New resistances
Refer to the picture of nifty.

Also check out the nifty picture.
Nifty has closed above 13 week ema after a very long time.
So now you got monthly/daily/weekly charts all saying up!
This could very well be a fresh impulse.
Positional weakness is only on a closing below 3900.
Sustaining above 3900 opens up 4240-4440 region if the rally is an impulse.
Refert to divis/titan/bhel charts for examples of fresh moves.

I anticipate a period of trader's remorse even if trend is turning up
3900-3950-3961-3971 consolidation with spikes to the downside possible.
Rising 13 eod ema+gap up can be first target 3800 region

Vision for next week: Stiff resistance 3950-3961-3970

Stiff resistance zone 3950-3961-3970

Target 3815
Buy 3900 put for 30-50 max, ltp was perhaps 60
Target 85-160
SL is price paid for put. If you can't risk the entire price paid for the put you are taking too big a position, downsize.

While i never mentioned an exit from the 3800 put earlier
I did mention to hedge at 3700-3570
You won't be making a loss on that position now thats for sure
Because when market approached 3700-3600 the 3600 puts would have been selling for the same amount that you paid for your 3800 put!!
If you got out with 2x profits gr8. If not well thats life.


3700 call reccomended at 100, target 200 hit. Half should be booked.
Remainder can be held for 3960 spot or 250-260 price of the call. Any position which is being held should be hedged by shorting 3900 call.

Greed and fear
Endless cycle of the markets

Check out the magic levels in the following image
Leave a comment if you think any of the levels is remotely working
Magic levels

What kind of trader are you?

There are two kinds of traders
a) those who hunt rabbits
b) those who hunt elephants
The elephant hunter returns mostly empty handed and his children often go hungry.
The rabbit hunter, feeds his family three square meals regularly.
Occasionally, when the elephant hunter makes a kill, it is a feast for the entire village.
But in the long run , its the rabbit hunter who stands a better chance of success.
- From Alexander Elder's new book Entries and exits -

Watch infy results for next move

I still stand by 3900-3960 assessment
sl narrow = 3815 (updated)
sl wide for trend=3760
All levels mentioned here are nifty spot

Mini short trade from 385x sl 3875
did t3 till 3815

if market is strong we will not go under 3800
if market is weak max dip allowed 3766

Market will take its cue from infy results
if infy guidance is good 25-30% type of guidance
Then you can see a rally in IT
I would go with tcs/infy/wipro/satyam in that order
tcs+infy are very close to breakout levels
keep an eye on them tomorrow.
Midcap IT can also flare up if market likes infy results/guidance

Keep in mind slightly longer term view
bearish at 396x
if 0 discount is seen near resistance, would be ideal shorting opportunity.

break of 3900 can result in 30 pts discount reduction in nf
so risk/reward was appropriate for bulls near 3815 spot today
nf was at 3785

Lots of pharma stocks giving pullback trades to 13/21 ema
look to buy
order of str
divis/orchid/wockhard/dr.red/auro/star/ranbaxy/cipla

Tata tea fresh break possible above 648+bonus announcement

Pullback trade given after resline breakout above 608
at 618-622
initial levels were
System: (Tripple Screen EMA/FibChannel follower)
Stock Name: TATATEA
Support1:613.344
Support2:617.556
Resistance1:648.698
Resistance2:670.521
Buyarea=613.957
ATR(14)=21.8235
Target1:635.78
Target2:657.604
Target3:679.427
SL:578.603

Now breakout begins above 648
News of a bonus announcement
Market might run with it and attempt 672-700-713-728 soon

TATATEA, Analysis Date:4/11/2007 3:53:59 PM
Close/cmp:634
Swing : Up=Buy ( 9.500% sensitivity)
T1:637.449 T2:672.126
T3:728.225 1xR:713.65
SwingHigh:647.5 CMP:634.0
SwingLow:560.0 SLPivot:581.3
2xAtr14Stop:11.2128
Narrowsl:66.15
WideSl:107.16
Lower Chan:588.807 Upper Chan:666.673
ResLine:605.602

Also tatatea might be doing a corrective retracement to its entire fall
Retracements :873.35-568.7
0.236:640.597 0.382:685.076
0.5 :721.025 0.618:756.974
0.786:808.155

Pullback trades

a) Star
gentle uptrend
13/21 week ema flat
13/21 daily ema rising
macd above 0 macd histogram pulling back
+ stock pulling back to rising trend channel
stoploss below panic lows 320

EMA(13)=342.466
TrendEMA(21)=339.844
EMAHT(13)=340.761
TrendEMAHT(21)=338.325
HT ema 13=340.761
HT ema 13 trend=1


SFstoplong332.5
SFstopshort376


System: (Tripple Screen EMA/FibChannel follower)
Stock Name: STAR
Support1:342.466
Support2:339.508
Resistance1:368.149
Resistance2:384.003
Buyarea=342.808
ATR(14)=15.8539
Target1:358.662
Target2:374.516
Target3:390.37
SL:317.125

sl=on closing basis 339
on intraday basis 317
targets 358/374/390

Nifty sideways correction unfolding

Weak move doesn't like it will do much damage
t1/t2/t3 standard fib
3853/3838/3815

S&P CNX NIFTY, Analysis Date:4/11/2007 12:53:59 PM
Close/cmp:3849.8
Swing : Down=Sell ( 0.000% sensitivity)
T1:3853.01 T2:3838.76
T3:3815.72 1xR:3763.25
SwingHigh:3,856.8 Stoploss:3,876.1
SwingLow:3,819.6 CMP:3,849.8
2xAtr14Stop:41.7504
Narrowsl:-56.40
WideSl:-91.37
Lower Chan:3833.28 Upper Chan:3878.82
ResLine:3859.24

Market overdue for a reaction

5 days up
No new highs.
Last time
3570-3900 = 5 days to top @ 3900

The swing targets on eod are
S&P CNX NIFTY, Analysis Date:4/10/2007
Close/cmp:3848.15
Swing : Up=Buy ( 5.000% sensitivity)
T1:3823.28 T2:3949.8
T3:4154.49 1xR:4184.3
SwingHigh:3,901.4 CMP:3,848.1
SwingLow:3,574.3 SLPivot:3,618.6
2xAtr14Stop:172.096
Narrowsl:282.85
WideSl:458.22
Lower Chan:3640.96 Upper Chan:3950.33
ResLine:4011.15

The intraday swing reads

S&P CNX NIFTY, Analysis Date:4/10/2007 3:53:59 PM
Close/cmp:3848.15
Swing : Up=Buy ( 1.000% sensitivity)
T1:3794.09 T2:3845.95
T3:3929.85 1xR:3791.8
SwingHigh:3,751.0 CMP:3,848.1
SwingLow:3,618.6 SLPivot:3,710.2
2xAtr14Stop:41.9556
Narrowsl:40.80
WideSl:66.10
Lower Chan:3833.49 Upper Chan:3921.38
ResLine:3612.86

Market needs to work off overbought condition on hourly charts near 3845-3857
Either by going sideways or down. Weak sideawys reaction target = 3821.
Retracement levels for reaction:
Retracements :3710.2-3856.75
0.236:3822.16 0.382:3800.77
0.5 :3783.48 0.618:3766.18
0.786:3741.56

So far 0.236 holding tiny sideways reaction till rising trendline. i.e trendline not even broken yet!!
A reaction till rising gap area 3760 would not damage the trend.
So my view is be a buyer at 3783-3766 if seen sl 3741.

Anything deeper below 3760 rising gap/0.618 would create fresh problems.

Black monday??

Every now and then people ask questions like black monday?
My favorite response : First you take me to the logical resistance level then we can have black , blue , orange, red monday :).
My logical res level reads 396x
(world will do 100% retracement/new highs we are weaker we will to 61.8-70% like in 2004)

After today's bashing the only one who is going to be black and blue are the bears

Starting tomorrow one should look to trade the short side of weak stocks
i.e longer term downward pressure but shorter term bounce backs
Try to go short on evidence of weakness on hourly charts.

Vision for this week: 3900-3971 region

We have done a complete gap fill in nifty spot
3760-3820 region
now i am sure lots of people are being bullish right now.
And I cannot disagree yet.
Weakness can come in only under the two rising gaps that we have.
If we go under that only then try shorting.
For now view is rising trend will continue on eod, only higher high/higher low expected
Target is 3900-3965 region

Vision: icarus flies into the sun, loses his wings and crashes
Translation to nifty, bulls will breakout (flying) , golden ratio 396x (sun) = resistance can potentially reverse.

The subconscious mind will often reflect what the conscious mind is thinking.
So in my case I already published this view of 3900-3971 and then a crash.
Just getting the same thing in my dreams.
Ever tried lucid dreaming? google for it.

Trying to climb a Slippery slope

Market is going to continue trying its upward journey
If world markets remain firm
Dow should retest old high
We could retest 0.618
3900+ next region to short.
3700 ish support.
Nf stops will probably get hit both ways but I suspect bulls will make more in the next week
Reccomended 3700 call for 100 target 200-250
With a hedge of short 3900 call for 30-70
depending on risk/reward appetite.


Vision=Slippery slope but sunny days ahead
5 lap race starting, weak stocks will fail after 3 legs up. stronger ones might even make new highs.
Weak=cement+auto, strong = pharma+IT

2004 , 2006 comparisons volatility expected to continue till mid may/june

In 2004 market held on sideways till almost mid april
The final carnage started in may and the carnage was over by mid may/june of 2004.
In 2004 it was due to a change in the govt, bjp lost and the left coalition came into power with congress (congress part wasn't necessarily bad, it was the left coming into power that scared off fiis :), just see what they are doing to cement/steel prices and you will understand)

So: What will be the final trigger this time????
Problem in the middle east?
Lower infy guidance?
(btw infy guidance expectations are fine = 30% in $ term but re guidance could be 23-25 which is on the lower side)
More monetary tightening?? Crr hike+repo hike due to sustained inflation trouble??
I don't know :)

Now remember that the C wave if/when it comes
under 355x and 200 sma has the potential to be a very nasty move.

Remember fear>>greed
:)

all correctives should be contained by 3971 area which is the initial collapse level and 0.618
just as 1931 or so was the corresponding level in 2004.

Dow on FIRE!!!

Can we take that as a positive?
Another pullback rally possible?
Target for pullback rallies remain 3900-3971

Is liye 3570 ke aas paas bears ko bola tha
Hedge yourself
nf hit a low of 3580 or so in the recent downswing
i am fairly sure the 3800 put option would have traded for 200+
almost my 2x target dunno if the bears got an exit.

Anyway please refer to 2004 charts.
B waves can be ridiculously long affairs :).
IF bulls can regain 3700 level then we start a pullback once again
First target = gap fill nf gap down reads 3720-3750
nifty gap down reads 3760 or so.
Above 3700, 3720-3760 region
above 3760 3840-3900 region
Above 3900 max 3971.


Now just because we go to 3900-3971
I would not change my bearish view.
The key in a volatile+insane market is to remain hedged.
Bears who are hanging on to unhedged short positions need to come up with a plan quickly now.
For now market is roughly in a falling channel
wave a/1 down = 3900-375x, wave2/b=375x-382x
and right now falling channel reads maybe 3694 in price.
0.382 retrace which is typical for w4 reads 3700 in price.
the channel in price/time might be 3740 or something
dunno

If market is perky enough to give me 3900 then i wouldn't mind exiting some delivery and moving into more cash.


For now I continue to trade my short term trading system the one I mentioned in my last post. So it doesn't really matter, which way the trend is
I will make my money :). In fact the more lack of trend+higher the volatility the more i can make.
And for those who are interested , no the system is not for sale
reason a) code is unprotected
reason b) system has a lot of components + almost 1000 hours of testing+optimization so I'm not gonna sell it for 5000-10,000RS and I doubt anyone will pay 50,000 Rs for it :)
So until I get my lazy act together and copy protect the code, you can come to mahen's conference for the calls.

The mathematics of hedging

I have a trading system
Long only= 126% per year with drawdown
of 16.5%
Short only = 980% per year
with drawdown of 14.41%

Now what happens if you trade long+short simultaneously???
annnual return 1301%
drawdown of 11.9%
:)

The market is not as simple as many people think
And most amateur traders like myself do not trade long + short simultaneously
because we're used to the traditional wisdom
of
a) follow the trend
b) follow the market trend

problem is
right now
there is no real trend.
There is chaos+confusion.
Only the nimble traders will survive :)
Good luck for the next 3 months!!
This monetary tightening has to stop+inflation has to come under control.
until that happens the corrective mood will continue.

Building houses and breaking them down :)

Keep in mind 3220-2920-2600 possible
4th side of a very big house is being built (wave IV in elliot terminology)
the top is not in place
once the top is in place the market will correct the true bear market correction :)
How do bear market corrections work?
You remove the top do some demolition and trying to build a new floor on top of the existing ground floor + 4 walls that you already built.

Anyway what do i expect? 2004 like correction in price/time , not a bear market. just a mini correction within a much larger bull market.
lets say fib ratios connected to the 2004 correction in price/time


so maybe a bottom by may/june and around 2920 in price

The endless cycle of the markets
the eternal roller coaster
Some people get high on the rush.
Some people manage to make a living out of the fluctuations?
Which one are you? which one am i? :)
I don't make much, still gotta work on the discipline part.
I Had a discussion with a friend on friday who chided me for saying short 3900 call for 70 to hedge longs. that call is likely to expire worthless now.
or buy 3800 put for 115, target 230 : retest of 3570. the put is now almost near the target price of 230.

His rationale was trend is up! follow the trend
the trend is your friend.
Now as brilliant as my friend was
he missed the bigger picture
the trend is present in multiple timeframes.

First come up with any trend following system
Lets say we like 13 ema
the direction of the 13 ema is our trend
its an ultra simple system
No i am not saying 13 below 26 or 13 above 26, ema crossover
that is unecessary complexity + lag

the direction of the 13 ema itself!!
you could also use any other ema/sma or length as per the cycles in your stock.

Now what does nifty trend look like??
what did it look like at 3820?
weekly 13 ema was falling!!! 3886! and that was the bear lane which i mentioned earlier
my bullish friend must have been aware of 13 hour ema rising and 13 day ema rising that he probably felt from the previous few days action. He probably also knew 13 month ema rising (he might be calling it 200 sma near 3556 etc, the two look similar)
And as brilliant as I am , I didn't buy that april put either!!!
In fact i saw it too the rising trend+all mechanical systems long even though my instincts said it was time to short!! However when we did close
I noticed one of my brilliant systems was short :).
But by then it was a bit late.

3826 was like 3900
nested 0.5 retracement
first 4240-3556 - 50% = 3900
then 3900-37xx - 50% = 3826
Did i act?
nope i waited for my mechanical system to short :)
Today market gapped down to first support target 3700
Shorting nifty at discount is just not my cup of tea
instead i shorted prajind and centurytext and jpassociate. jpassociate managed to gap up by a ridiculous amount and took my stop out , so net net didn't make much.


Anyway the roller coaster will always be here: no tension.
Ever been on a roller coaster?
Some people try to resist the drops! they tighten up their stomach muscles
and take unecessary tension!
When you let go of trying to be in control then that knot in your stomach will disappear.
Thats when you can truly enjoy the roller coaster.
Same with the markets, let go of any preconcieved notions. Use any trend following system which tells you which way the roller coaster is going and follow the trend.
Keep in mind that the falls are usually sharper than the rallies.
The falls are gut wrenching affairs, which can be exhilirating if you are short!!! If you are long they will be quite painful!
Just keep in mind which trend you are following and when/where it changes.
Enjoy the ride !!

Have already posted one solid nifty trend following system
which works in 2 timeframes
7/105 on 10 minute / hourly
would probably also work great on daily charts!! but keep in mind alignment/optimization issues.


Tomorrow I guess we will look to short again
remember we're looking for 3570 nifty spot.
once 200 sma(which now reads 3625 or so on my nifty chart) and 355x/357x(old lows) are broken on closing basis the we have a high probability of C wave down.
The C wave should do the lower targets which everyone has been talking about for quite a while now.

for now 355x-3900 range remains but it could break very very quickly and very dramtically

Hedge 3800 put taken near 3900

RBI Hike
= interest rate sensitives to tank some more
banks,auto

most defensive=pharma/fmcg
pharma was pointed out few weeks ago near old bottom at 3570
and look at the stellar outperformance
The thing with markets is when the market starts going down, everything tanks
weekly 13ema trending down, reads 3850 or so
daily 13 ema was trending up : it read 3760 or so which gave us the fast bounce


If you took march put you had to book at 3760
If you took april put your target remains 3570
so you have 3 options
a) wait for 3570, book there, since that is 2x target
b) wait for 3570 , hedge there since you have mega profits to hedge
c) considering the fact that there is a very very remote bullish possibility of the initial rally supports 0.5/0.618 holding and much higher levels one can hedge
at the first support : 3700 region 0.618 retrace of initial rally.
Best bet = short 3600 put for 60+


Longer term vision.
A very large house is being built. Now in order to build a large house a large foundation is needed.
The ground floor for a bull market usually comes from a period of sideways consolidation.
We have already built 3 sides. the 4th is being built.
The top is not yet in place :). Thats the good news.
This is the bigger picture. Smaller picture if you remember the remote possibility of a flat correction in w4 position. But for that market has to continuously trade above 3656 for next few weeks.

sensex 4k-14k didn't happen overnight. The market came out of a multi year consolidation before it gave 200% gains.

The next 6 months will lay the foundation for sensex 20k
Short term volatility will continue retest of may 2006 panic lows is a remote bearish possibility.

The next big impulsive upmove in nifty might be when monetary policy easing starts.
First hint of easing and we will be off to the races again.

If you are a bull
Watch infosys 200 sma near 1970 or so.
a) infosys doesn't have huge interest costs
b) fundas are still up
c) results to come on 13th so its not out of the game yet.