RCOM - INHS in Play?

If we observe RCOM daily chart, then we can notice that stock has made Inverted Head and Shoulder pattern (INHS Pattern)

Based on given chart, INHS pattern will break out above 163.8 for the target of 221 with SL at 140.
 

VIPIND - Probable Patterns in Making

4th Oct 2013 - Update
VIPIND made perfect doji on 3 Oct and made bearsih hammer on 4th. But VIPIND was able to manage closing above 10DEMA at 51.08 and closed at 51.55 after making high of 53.3. Bearish hammer need to show its follow up action in coming days.

 

One need to be catiuos that if VIPIND breaches 43.50 before breaching 55, then Double Top pattern is confirmed

1st Oct 2013
As we can see in daily and weekly charts of VIPIND, an ascending triangle formation is under process (having completed 0, 2 & 4th point on trendline connecting higher lows whereas 1 & 3 on trendline connecting constant highs).

Based on daily chart, support exists at trendline connecting higher lows.
One can initiate trade based on below levels:

Option 1: Wait till pattern is complete
Buy above 55, target 1 = 62 (200DMA), target 2= 71 with SL at 49.

Option 2: Take trade now with stict SL (without waiting for pattern to complete - not advisable)
Buy above 50.6, target 1 = 55, target 2 = 62 (200DMA), target 3= 71 with SL at 49.

Important Note:
There is another pattern in making i.e. Double Top. If price breaches 43.50 before breaching 55, then Double Top pattern is confirmed and then below trade order can be placed:
Sell below 43.5, target  = 31.5, with SL at 49.55.
 

JNSAR Trading Notes

Below are notes for trading based on JNSAR (Courtesy Ilango Sir).

JNSAR value will be given for today's date and for next trading day. See JNSAR Value here

Rule 1:
If X is less than Y, where X is Nifty Spot value and Y is Day's JNSAR value. 
If NS cross JNSAR, take a long position at Y with SL of 20 Points. If SL is hit, reverse the position and take short position. The same rule is applicable for next day JNSAR i.e. keeping 20 points SL at JNSAR value. Thereafter trade based on JNSAR value.

Rule 2:
If X is more than Y, where X is Nifty Spot and Y is day JNSAR.
If NS reaches JNSAR and breach it, take a short position at Y with SL of 20 Points. If SL is hit, reverse the position and take long position. The same rule is applicable for next day JNSAR i.e. keeping 20 points SL at JNSAR value. Thereafter trade based on JNSAR value.

Example:
Day 1 - JNSAR: 5678, NS CMP: 5648 (NS rises and cross 5678 (JNSAR) - Take Long Position, SL 20 points i.e. 5658)

• After position, NS come down till 5668 ==> No change in Position
• After position, NS come down till 5656 ==> Change in Position, initiate Short trade (with 20 point SL i.e. 5677 <5657>)

Day 2 - JNSAR: 5688, NS CMP: 5700 (Considering Long position on Day 1 is still valid, SL for long position - 5668 <20 class="goog-spellcheck-word" point="" span="">SL
on 2nd day JNSAR)

• NS come down till 5678 ==> No change in Position
• NS come down till 5666 ==> Change in Position, initiate Short trade (with 20 point SL i.e. 5687 <5667>)

Note:
- If SL hit, then reverse the position and monitor based on next day JNSAR. A JNSAR triggering in the 1st session is likely to stay and the 2nd session may get volatile.
- If the trade is likely to be affected by whipsaw at the extreme overbought or oversold condition, then allow 5-10 points filter

Rule 3:
If NS (before close of market) is between Current Day JNSAR and Next Day JNSAR, then take position accordingly.
Long Position: Day JNSAR (5699) > NS (5682) > Next Day JNSAR (5674)
Short Position: Day JNSAR (5674) < NS (5682) > Next Day JNSAR (5699)

Profit Booking System:
Always trade with min of 2 lots. Take profit on 1st lot at 50/100/150. Keep 2nd lot till JNSAR hit again to reverse the position.
Profit booking on 1st lot also depends on Hourly technicals as well as the "Aggressive intraday supports/ Resistances levels".(Need to understand this)
After profit booking, if you get Nifty to initiate a resell/ re buy closer to JNSAR, do so. This maximises profits

Combining JNSAR with TA - Need to be verified Personally, Noting here as Sir's Guidelines
Rule 4:
Bigger trade possibilities are highlighted whenever the Hour JNSAR & Day JNSAR has concurred and supported by other technical considerations

Rule 5:
a. Short at Hour JNSAR when MACD enters in negative zone
b. Long at Hour JNSAR when S. MACD turns up in deep negative zone (-26.13)
c. Long at Hour JNSAR when S. MACD turns up in deep negative zone with divergence/stochastic at bottom
d. Short at Hour JNSAR when S. MACD turns down from high, Stochastic turns down (breaks 90/80)
e. If No divergence in MACD, stochastic is either >80 or <20 a="" class="goog-spellcheck-word" span="">pply
10+ point filter to Hour JNSAR, depending on long/short positionf. Long at Hour JNSAR when, S MACD is in deep negative and Stochastic is posed to go above 20. For e.g. at hour, MACD: -55 and Stochastic: 18.54
g. Short at Hour JNSAR, when S. MACD is in deep negative and Stochastic goes below 20
h. Long at positive divergence in S MACD and Stochastic
i. After taking position (Short/long), add 10+ point filter to next hour JNSAR

Methodology for beginners to learn JNSAR trading
Crorepati suggested methodology for beginners to learn JNSAR trading,
1. Select few scrips of nifty 50 i.e Tata motors, Wipro and RIL
2. Buy just 2 stocks when JNSAR long triggers and sell when JNSAR triggers and no shorts as these are stocks.
3. Do for a month with 3 stocks and move to NIFTY BEES.
4. Once well versed with nifty bees move to mininifty then to nifty futures.
Advantages: Low investment i.e - not more than Rs.5000. As any 3 of the stocks will be triggering now and then, the learning process will be quickened. As these are stocks, one can hold without loosing capital.
Whenever Nifty is closing between DHEma and DLEma, it is in a range bound mode and one should accordingly part book @ resistances and supports(Trade).

Links for JNSAR:
http://tradeinniftyonly.blogspot.in/2010/09/jnsar-stop-and-reverse-trading-method.html
http://tradeinniftyonly.blogspot.in/search/label/JNSAR
http://tradeinniftyonly.blogspot.in/2011/05/learn-before-you-start-out-to-earn.html
http://tradeinniftyonly.blogspot.in/2011/03/jnsar-with-ta-ew-techtable-inputs.html

Basics: Trading Based on MACD

MACD is constructed by making an average of the difference between two moving averages. The difference of the original two moving averages and the moving average of the difference can be plotted as two lines, one fast and one slow.
Uses
Most modern charting software now includes MACD as standard. Once selected to display in your charting software it normally shows up as two lines plotted on an open scale against the zero line. These two lines will normally be of different color or one line a solid line and the other a dotted line. Frequently used settings are 12 and 26 period exponential moving averages with 9 period exponential moving average as the signal line.
Although there are three moving averages mentioned we only see two lines. The simplest method of use is when the two lines cross. If the faster signal line crosses above the slower line then a buy signal is generated and vice versa. It is also used as an overbought and oversold indicator. The higher above the zero both lines are the more overbought it becomes and the lower below the zero line both lines are the more oversold it becomes.
It may also lead to a stronger signal if the signal line crosses down when it is overbought and crosses up when it is oversold. The last common use of MACD is that of divergence.
If the MACD is making new lows and the price of the security is not making new lows that is one form of divergence (bullish divergence). Also, if the MACD has made a high and starts to head down but price continues up that is another type of divergence (bearish divergence) and may lead to an indication of a change in direction.
Use Of MACDMACD also used as a trend indicator with parameters set at 8 and 18 period exponential moving averages with a 9 period exponential moving average as the signal line.
If we are trading day charts we would be looking at the MACD on the weekly. If we are trading an hourly chart we might look at the MACD on the daily. As long as the signal line remains above or below the MACD line on the next higher time frame you know the trend is still in place.

We can get the confirmation of trend in 30mins chart for intraday trading. For example, Nifty is bullish (i.e. fast line crossed slow line in upward direction), then we may check 5min chart and take positions accordingly

Nifty Future Levels for 17th Nov 09, Tuesday

Nifty Futures as on 16th Nov, 09
Open: 5041
High: 5082.5
Low: 5038
Close: 5062.5
Nifty Future Levels for 17th Nov 09, Tuesday
Pivot: 5061
Resistance 1: 5084
Resistance 2: 5105.5
Resistance 3: 5128.5
Support 1: 5039.5
Support 2: 5016.5
Support 3: 4995

Note: Nifty has break out its critical level of 5052. Now bullishness can be expected.

Nifty Future Levels for 16th Nov 09, Monday

Nifty Futures as on 13th Nov, 09
Open: 4948
High: 5023
Low: 4946
Close: 5002
Nifty Future Levels for 16th Nov 09, Monday
Pivot: 4990
Resistance 1: 5034
Resistance 2: 5067
Resistance 3: 5111
Support 1: 4957
Support 2: 4913
Support 3: 4880

Basics: Pivot Based Trading

The pivot point is the level at which the market direction changes for the day. Using some simple arithmetic and the previous days high, low and close, a series of points are derived. These points can be critical support and resistance levels. The pivot level, support and resistance levels calculated from that are collectively known as pivot levels.
Every day the market you are following has an open, high, low and a close for the day (some markets like forex are 24 hours but generally use 5pm EST as the open and close). This information basically contains all the data you need to use pivot points.
The reason pivot points are so popular is that they are predictive as opposed to lagging. You use the information of the previous day to calculate potential turning points for the day you are about to trade (present day).Because so many traders follow pivot points you will often find that the market reacts at these levels. This give you an opportunity to trade.
The formula I use to compute Pivots , Supports and Resistences are given below:
Resistance 3 = High + 2*(Pivot - Low)
Resistance 2 = Pivot + (R1 - S1)
Resistance 1 = 2 * Pivot - Low
Pivot Point = ( High + Close + Low )/3
Support 1 = 2 * Pivot - High
Support 2 = Pivot - (R1 - S1)
Support 3 = Low - 2*(High - Pivot)

As you can see from the above formula, just by having the previous days high, low and close you eventually finish up with 7 points, 3 resistance levels, 3 support levels and the actual pivot point.
If the market opens above the pivot point then the bias for the day is long trades. If the market opens below the pivot point then the bias for the day is for short trades.
The three most important pivot points are R1, S1 and the actual pivot point.
The general idea behind trading pivot points are to look for a reversal or break of R1 or S1. By the time the market reaches R2,R3 or S2,S3 the market will already be overbought or oversold and these levels should be used for exits rather than entries.
A perfect set would be for the market to open above the pivot level and then stall slightly at R1 then go on to R2. You would enter on a break of R1 with a target of R2 and if the market was really strong close half at R2 and target R3 with the remainder of your position.Unfortunately life is not that simple and we have to deal with each trading day the best way we can.

Strategies:1. The Breakout Trade
2. The Pullback Trade
3. Breakout of Resistance
4. Advanced

Nifty Future Pivot Levels for 29th Sept, Tuesday

Nifty Futures as on 25th Sep, 09
Open: 4958

High: 5007

Low: 4932

Close: 4960
Nifty Future Levels for 29th Sep09, Thursday
Pivot: 4966

Resistance 1: 5001

Resistance 2: 5042

Resistance 3: 5076

Support 1: 4925

Support 2: 4891

Support 3: 4850

Scope of learning Technical Analysis

Hi Friends,
Now, I have started learning baiscs of Technical Analysis. I have prepared the following area which I need to cover. Will update more such areas while learning. Also, I will be posting charts to eloborate my understanding and concept in depth.
1. INDICATORS
1.1 SMA (Simple Moving Average)
1.2 EMA (Exponential Moving Average)
1.3 ADX (Average Directional Index)
1.4 Aroon Up / Down Indicator
1.5 Bollinger Bands
1.6 RSI (Relative Strength Index)MACD
2. CANDLESTICK CHARTS
2.1 Introduction to candlestick charts
2.2 Various formations
2.3 Bulls vs bears
2.4 What candlestick charts don’t tell
2.5 Candlestick Positioning
2.6 Star position
2.7 Harami position
2.8 Long Shadow Reversals
2.9 Hammer and Hanging Man
2.10 Inverted Hammer and Shooting Star

Strategy for Nifty Options in October 2009 Expiry

Story continued in Sept expiry also. But what was the story? Very simple...story of making losses again and again either in stock deliveries or option trading. Never traded in Nifty Futures as dont have enough margin to trade into it. But for a change very less loss incurred compared to the previous months (reason: amount left was less :)).

Now its high time to recover losses which I incurred till date (figures I wont disclose, as I myself don't want to know or better to say I don't want to realize). But billion dollar question is how to recover losses?? Do I need to devise some strategy?? WOW...hehehe...

One drawback in all my previous option trades were, "I never hedged my trades". So decided will do this time.

If I try to see the broader range of nifty movement in Oct expiry, it shall be 4500 - 5500. And please dont ask me how I derived this range. This range is totally based on my readings of articles/blogs/TAs views/FAs views etc. etc..

I will keep updating this post with all strategies which I may follow in this expiry.

As per the current market trend/ expectation, nifty is about to touch much higher levels (highly bullish signals as per TAs). And as per my understanding and observations, any megamove in share/indices have to undergo some corrections. Also, nifty in sept has moved straight away from 4580 levels to 5003 without having any corrections. Hence, point is, correction is on the cards but when....NO IDEA !!!! It might happen in sept expiry also or in the initial weeks of Oct. As, now only 3 trading sessions are left in sept expiry...so chances are null in sept expiry. Hence, initial weeks of October can get this golden chance.

Strategy 1 A.
Nifty correction in initial weeks of oct and thereon bull will again give the major rally. Hence, will watch the premiums of 5500CE (CMP = 20) and 4500PE (CMP = 38).

Step 1. Buy this straddle at the suitable time when the combined cost shall be less (considering premiums shall be high in first few days of any new expiry due to time value).

Step 2a. If nifty reaches 4500/4600 level first, then square off 4500PE positions and hold 5500CE.

Step 2b. Average 5500CE position with 5000CE when nifty is at 4500/4600 levels.

Step 3a. If nifty reaches 5400/5500 level first, then square off 5500CE positions and hold 4500PE.
Step 3b. Average 4500PE position with 5000PE when nifty is at 5400/5500 levels.

One can enter into this type of straddle with any combination of strike price depending on the investment capability.

Strategy 2A

Nifty will definetly cross 5000 mark in one of the remaining session in sept series and then in first few days of Oct and will be pulled back for 300 points corrections, so that its megaupmove will be easy and smooth.

Step1. When Nifty crosses 5000 mark, 4500PE can be bought (less than 30).

Step 2a. If nifty tanks towards the level of 4600/4500, one can come out of the put option positions and book profits.

Step 2b. If nifty move up after crossing 5000 without any correction and touces 5200, then average your 4500PE trade with 4700PE. Book profits when nifty will tank to 4600 levels

Step 3a. Buy 4800/4900CE (at watever the price is available) when nifty is at 4600/4500 level. Book profits when nifty will cross 5200.

Note: I may update the Nifty range in Oct Expiry in due course. Hence, if any change in range, will impact the purchase of strikes of put/calls for the given strategy, averaging of trade and profit booking.

All above given strategies are just my views. One should not trade as per the given strategy. If at all, they do, that will be at their own risk.