Dated :- 31. 08. 2014

                                                                 NIFTY SPOT : 7954.35

Hi,

Readers,

It was clearly mentioned in my previous blog that Nifty is likely to face resistance at current level. And see, Nifty is actually facing resistance at current level. It was also mentioned that Bank Nifty will decide when Nifty will start correcting. Bank Nifty is also facing heavy resistance at 16000 level.

Nifty is hovering at current level for last 8 trading sessions. It is only index management which is being done here i.e. Nifty is artificially being forced to stay at higher levels.

I have been writing repeatedly since July 05, 2014 that this Nifty will make intermediate top between 7750 to 8148. And whatever Nifty is doing now is a part of top making process.

Readers should also note that in previous blog it was mentioned to go short below 7860. Nifty made a low of 7862 and rebounded again. This shows the importance of levels mentioned in the blog. Market makers/operators know that below 7860 more selling will come thus they use Alogs(algorithimic trading making sure that 7860 is not breached). August expiry also played its role.

Now What :-

Plain in simple words, get ready for correction. Stage is set, correction can start any time. What level is to be taken care of is 7860. Even close below 7894 will be first indication that Nifty is starting correction. Stop loss after the activation of trade shall initially be 7975 closing basis. And gradually trail down the stop loss when Nifty behaves as expected.

Time has come when Nifty has to get out of small trading days range.

Trade Accordingly.

Dated :- 24. 08. 2014

                                                                        NIFTY SPOT : 7913.2

Hi,

Readers,

Nifty did exactly the same as was mentioned in my previous blog. It has achieved the logical targets of 7880 to 7910 as was mentioned in my previous blog.

Readers should also note, that after achieving the logical target on Aug 18, 2014, Nifty spent next 4 days continuously within 7880 to 7910. That shows the importance of these levels.

Now What :-

Nifty is likely face resistance at current level. Which will be decided by Bank Nifty, which is on the verge of making next breakout above 16000. As we all know that Bank Nifty has good weight in Nifty and it can force Nifty to put on further 100 – 150 points. As mentioned earlier also in my previous blogs that it will be Bank Nifty now which will decide the movement of Nifty.

In my earlier blogs it was mentioned that Nifty is in the process of making intermediate top between 7750 to 8148. It has also been explained earlier in previous blogs that there is no harm in leaving last 100 – 200 points, which may or may not be there. And even if they will be there, they will be very volatile. It is always better safe than sorry.

Simultaneously one should be patient enough to wait for opportunity to come and should not be eager & tempted to trade erratically.

Now wait for Nifty to close below 7860 level, Close of Nifty below 7860 will be the first indication that Nifty is starting correction from here only without going to the possible upper end of 8148. Strict Stop loss for the short position below 7860 is 7930.

One should always keep in mind that market makers/operators can any time play smart to hit the stop loss of 7930 as the upper end of the top making process is 8148, they have the cushion to make any false/dummy move to 8148. So be it, when a good trade is coming below 7860 one should take it.  

Thus it is recommended that only professional traders who can handle the volatility and take risks should take the trade. Others should wait for Nifty to break below 7800 to look for correction. We have expiry also in coming week, so, expect volatility.

Time to be cautious and Trade accordingly.

Dated :- 17. 08. 2014                                 NIFTY SPOT : 7791.7

Hi,

Readers,

Nifty did exactly the same as was mentioned in my previous blog. Wherein it was mentioned that if follow through does not come Nifty will rebound. And the same has happened.

Overall picture of Nifty structure and what should be expected :-

Nifty is making 2^nd  broadening pattern on daily charts.

Nifty had already given breakout of broadening pattern on its way up at 6700 around levels. Back to back consecutive breakouts of these broadening patterns normally do not come. Thus one should be cautious as this broadening pattern and many other indicators are saying that Nifty may not have too much of upside on immediate basis.

Slope of ADX on weekly charts has also turned, showing pause in upward momentum.

Hence, Nifty will either be stuck in a range (as it is doing so far) for some more time or can correct (i.e. may come down).

Ideally the logical targets of this up move of Nifty are 7880 to 7910 and after that good correction can be expected. But these targets may or may not be achieved.

I am of the view that there is no harm in leaving the probable last 100-200 points. As there are some indications that Nifty may start correction any time. Thus, personally I advise to leave this bullish inverted head & shoulder breakout above 7756 on smaller time frame charts and wait for correction to start. Till then stay out and be cautious.

Readers should also remember that I had predicted on July 05, 2014 that Nifty is expected to make intermediate top in between 7750 to 8148. Since then Nifty is in a process of making intermediate top formation. These present moves are part of that.

Only for traders who want to play breakout of bullish H&S pattern :-

Nifty has given highest ever weekly closing. And new highs should be respected. Nifty on smaller time frame charts has also given bullish breakout of inverted Head & Shoulder (H&S Pattern) above 7756. With the targets of 7950. This virtually coincides with the logical targets mentioned above.

For them the trailing stop loss is 7700 and one can even have the smaller stop loss of 7730.

Trade accordingly and be cautious.

Dated :- 10. 08. 2014

                                                                     NIFTY SPOT : 7588.55

Hi,

Readers,

Nifty did exactly the same as was mentioned in my previous blog word by word.

It was clearly mentioned in my previous blog that now Nifty will be volatile and move within the range of 7450 to 7750. Nifty was at 7602 on the date of my previous blog(i.e. Aug 03, 2014), when it was mentioned to book profits in short positions and it was also mentioned that Nifty will be volatile and would spend some time in 7450 to 7750 range.

Within the range one should always sell at higher point of range and buy at lower point of the range. Look the same happened Nifty gave the opportunity to sell again at higher end of the range when it made a high of 7752. And from there is fell more than 200 points in just 2- 3 days.

Readers should also remember that I mentioned in my previous blog (Last Paragraph) that, there is one condition for Nifty to continue its  –ve bias. And it is that, it should be volatile and should not close above 7750. Till it is closing below 7750 it can continue its bearish bias. See the same happened.

Now What :-

For non professional traders it is better to book profits from short positions again for once as they are getting handsome profit in no time. For professional traders they can book part profit here and can hold their balance short position with trailing stop loss of 7700 closing basis.

Although Nifty has given initial breakdown with gap on charts which is considered bearish. But the structure of Nifty is indicating one should wait for the follow through of that gap breakdown. Thus it is only professional traders who can bear the volatility, can trail the short position with trailing stop loss of 7700 closing basis.

If the follow through does not come then it is recommended to book complete profits from all the short profit and wait for the next trade to come. As it will indicate that Nifty is again stuck in a range. And not in a hurry to come down and in that case it may even rebound.

Why to wait for the follow through :-

If Nifty does not give follow through and close even above 7630. Then it will be the first indication that Nifty is not inclined to come down. And the overall trend which is up till now will sustain for some more time. And Nifty may even rebound from there.

Important point I would like to mention here is that short term traders can play the small range of 7530 to 7630. Blow 7530 trade with bearish bias and above 7630 trade with bullish bias.

Next major support for Nifty is at 7450- 7400. And resistance is at 7700- 7750.

Major breakdown in Nifty is comprehensive close below 7450 and till it holds Nifty can rebound any time.

Trade accordingly.

Dated :- 03. 08. 2014

                                                                           NIFTY SPOT : 7602.6

Hi,

Readers,

Nifty did exactly the same as was mentioned in my earlier blogs. This is the power of technical analysis for us.

It was clearly mentioned in my blog dated July 23, 2014 to book complete profits in all long positions when Nifty was at 7795.

Let me Quote the words of my blog dated July 23, 2014

 “Now, Nifty may face resistance at various levels. Time and levels are not far when Nifty will get exhausted and will be inclined to correct. And that correction can be very painful for bulls.”

Look the same is happening now. Nifty corrected more than 240 points from the high in no time.

Nifty closed exactly at the point which was mentioned by me as support area in my previous blog.

Now What :-

It is better to book full profits from short position. As we have credit policy also on Aug. 05, 2014.

Because now Nifty may want to spend few time between the range of 7450 to 7720. Time will tell.

Now from hereon Nifty will be volatile in at least first half of coming week.

And next major support is at 7450- 7420 levels.

Now resistance levels for Nifty is at 7720 and then 7810.

Between these support and resistance levels there will be small trading opportunities in both sides.

However, I would like to inform my readers that in case Nifty is willing to carry on this bearish momentum further then it has to fulfill this condition.The condition is that fall should be gradual and volatile without closing above 7750 in coming days. Close below 7450 will make double top pattern in Nifty which is considered bearish.

Trade accordingly.