Nifty update

The trend in Nifty is now changed to UP...yesterday it closed above 4950...which has made the trend up

Traders can look for a dip to enter and be long as long as Nifty remains above 4950

China is a leading indicator of a market crash

China fell 73% from a peak in October 2007 to a low in October 2008. After that it has retraced 40% approximately.

China shares topped before US and India in October 2007, bottomed before US and India in October 2008. So there is a very high probaility that China will lead the next leg down which seems to be underway.

So all eyes on Shanghai!

MACD Divergence on Nifty

Divergence in daily MACD and Nifty Futures is a strong early warning sign of a reversal in trend

Nifty close below 4950 very bearish

Nifty has broken below the trendline which contained the upmove from March 2009 lows of 2800 levels.

Trendlines do work. Notice how a break above the channel in end March signalled the end of the downmove and the start of an upmove as indicated in the chart.

Nifty closing below 4950 is very bearish.

Trading Idea: Short the Nifty if it goes below 4950 and keep 4950 as the initial SL.SL can be trailed aftersome time depending on how the market moves.

Nifty continues uptrend

Nifty continues its uptrend. Until the market is bearish it is bullish. So we have to respect the trend. Although this might be the final leg of the up move.

All investors are bullish now. This is the clearest sign of a major correction on the horizon.

A close below 5200 for a few days could signal the downmove. Till then stay long. Or be wrong!

Nifty volatile but trend is UP

The Nifty has been rangebound and volatile for the past few weeks. Currently the trend is UP and we have to respect the trend. A correction may be on the cards but that correction might come at 5200 or might come at 6000. The market is all supreme and we have to learn to follow what the market is telling us.

We can look at staying long as long as 5050 is not broken.

Nifty trend is UP..again!

The Nifty trend is up...again....after a V shaped recovery from 4550 levels

So is it different this time? Will the Nifty continue going up without correcting significantly?

The more long lasting the trend, the more violent the end. The trend is your friend until it ends. And they ALWAYS do.

However the trend is UP now and we must respect the trend. As long as the Nifty remains above 4900 it is safe to be long.

Nifty UP move continues

Nifty continues its move up and broke out of a narrow range it has been in for the last few days. The trend is clearly UP and its best to stay with the trend till the market tells us that the trend is now DOWN. The trend is your friend till the end when it bends!

The next target for this up move is 5300.

Bank Nifty

Am short on Bank Nifty Futures at 4550...it is currently at 4082...for those having a bearish view on Banks (I am sure there are some bravehearts who are still bullish) the Bank Nifty Futures provides a convenient way of gaining from the fall while avoiding stock specific risk.

A move from 4500 to 4000 levels is a 10% fall on an unleveraged investment. Which is amazing for a 5-10 period horizon. The Bank Nifty is a very trending index and once can get these moves (up and down, though its always safer to trade in the direction of the trend) quite frequently on this index.

The momentum in Bank Nifty is extremely bearish. There is still scope to ride the downward trend.

As always keep lot sizes under control and stop losses in place.

Trend-following vs Trend-prediction

Most of us like to be leaders...predict tops and bottoms....put on any business channel and everyone is trying to predict the market bottom ...attempting to beat the market. What we fail to realise is that the Market is all-knowing, all-supreme. It reflects the views of all the participants - bulls, bears, fundamentalists, technicians, fund managers, brokers, operators, TV experts, insiders, Investment Bankers, Fed, PM, FM, CEOs, uncle who is a stock market expert and also your milkman. So for once try and be a trend follower rather than a trend predictor. Observe what the market is saying. Trade with the trend. Make the market your friend and not your opponent. Am 100% sure you will be pleasantly surprised with the results.