Wednesday, May 28, 2008

Thank GOD for small mercies....

When I was a bull I lost ... When I was a bear I lost ... when I am an idiot I gain....
Well this time over I decided that I will and will only trust the charts irrespective of others and my urges. This is what I did... went short on IFCI as the crows had to caw and thank Almighty that the market behaved in a predictable manner and showed weakness nearing close. That made me recover some of the losses I suffered for last few days.

I now have no doubt in my mind about the intermediate weakness. but nearing expiry I feel Firstly, all longs have squared up as the stop-loss would have triggered covering of longs approaching expiry.

Secondly, now the shorts that have been built up in last few days will have to be covered and so we may see green.

The world markets may be meakly moving up but are up and that gives us some hope.

Unlike yesterday when I was almost sure that we will end up weak but could not say in so many words ... today we may remain green and end green though marginally. It may be a small white candle only today.

1. TRIX above middle path -- but any downside will see it below now.
2. StochRSI just about raised its head and should now cross 20 in next day or so. Just as I have been saying -- you cannot just keep it at 0 marker for so long.
3. Slow stochastic below the 20 marker and again its time it crosses this marker even if for a moment.

However RSI, MACD and jaggu (TRIN) continue to be bearer of weakness. That alongwith breaking of rising wedge (bearish sign) and a falling channel (lower tops, lower bottoms) SO any rally or recovery is likely to be short lived. The falling channel was completely missed by me and I saw the reference on Nifty



Nifty said...

Hi.. thanks for including me inside the your small circle. Iam very sure that i can gaing great knowledge from you and your pals. Thanks for the acknowledgment you have given me in ur blog. The nifty trading technique which i was talking about is being deveolped in to a software(0fcourse to be patented) and is a brain child of my friend. Iam using the same and getting exact entry and exit points. It tells when to entry and exit and also can predict the next day range. It can easily identifty BTST by around 3.15pm. The minimum profit is 20 points for traders who are quick to take profits and the maximum loss is 5 points. we can discuss abt it on a leisure time. Thanks


Uma said...
This comment has been removed by the author.
Rajandran said...

@cheema,uma,jv,gjaggu,nifty : is this trend reversal short lived. Any means to broke above the downtrend channel. The down trend channel is more shallow in my nifty view section in
What is yours view.

@nifty :Can i have a view of your software.


Rajandran said...

I longed on relcap today at 1236.

S S Cheema said...

Yes the recovery seems to be short lived -- but definitely till expiry tomorrow we may continue going up.
Rest when i study the charts in detail tonight.

Chartstalk said...

Hey Nice blog. But recently FII have remained net seller for consecutive 6 trading sessions also DII recently turned net sellers....In such market condition I think it is better to keep watch on EXIT oppertunity at all goes or keep stop loss or panic early. Else chances of getting lost in JUNGLES are very high.

Uma said...

To Cheema:
BHEL: I bought some cash shares day before, cause it seemed to show strength around 1666 level. Yesterday we had a gap up opening in BHEL and I sold for 1720. Finally bought back at 1666 again but BHEL kept on falling.
Even tho Nifty reached 4920+ level again yesterday, BHEL seemed to struggle to cross 1600.
This is surely a level that bull operators are keen to defend, and in the coming days, I expect to see BHEL at higher levels.
Results were out recently, here's a link for your review:

This FnO seems a critical one, bears are very keen to crack stocks such as BHEL, REL Infra, ICICIBank etc cause they have built shorts around these levels.

One good sign: Inspite of almost 3%fall and higher than average volumes, BHEL has a low force index which shows that bears are putting in considerable effort into the downtrend. I saw a similar pattern in SBIN yesterday, even tho it fell 4%, the trend showed weakness. Today SBIN is up almost 3%.

I am betting on upside from here. This is again an excellent time to be building ones portfolio. One can out-do the market by down-averaging one's portfolio, buying on lows and selling on highs.
This type of trading usually gives far better return than pure speculation, because we don't have the same pressure to cover.

To Suresh: Your Nifty trading system sounds good, but it doesn't take into account the following factors:
1. EXPECTENCY: Ratio of profitable trades to unprofitable ones. Yes, one can have a stop-loss of 5 points on Nifty and potentially unlimited profits. BUT, how many times will you make a loss? It all adds up. A lot of traders have automated set-ups created by expensive software, I'm not sure how many are successful and how successful they are
2. INDIVIDUALITY: There is a joy in trading on your convictions, which you can't get in trading with machine-generated signals. It works for some but not for everyone.
3. BROKERAGE: Not all of us have a brokerage plan & margin that allows us to be in and out of trades on a SL of 5 Nifty points.

S S Cheema said...

Thanks as always UMA. wonderful reading through your BHEL analysis -- was actually dying for advise. So -- I will see an opportune time and rollover if required. I have may lot and not jus as i mentioned somewhere.

Chartstalk: I agree with you -- infact I talked for the day only and I do try to keep with the times -- the only problem with me is that of any retail investor. we let the losses run and cut short the profits -- exactly what we are not supposed to do. I tried stoplosses - but there are people who are paid to calculate and trigger such stoplosses. I agree that we should have sound exit policy but have not found one till now. DO let me know if you have one.

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