How to Trade the Next Week ??

Weekly Review :

1. The Week was rangebound throughout on both sides of the SAR 5480 , as indicated in the  detailed Weekend analysis below.

2. The broader Range suggested of 5400-5600 couldn't be resolved this Week.
As analyzed in the Mid week Review ,The markets couldn't trade above 5525 levels to show strength and gave some gains below 5500/5480 in later half of the Week. 

3. Is the Market showing resilience amidst all the bad news? Even the Tsunami today couldn't take the Market down below 5400 . Local Political Instability(DMK), Libya , Mideast crisis, Oil Prices, Scams, Inflation etc have been digested this Week. What is the Market signal by this Price response to the News this Week??

4. Is it a distribution going on at higher levels above 5400 ? and may be a start of a sucker 'B' wave rally up to further this cause and Financial year end NAV adjustments of the fund managers.

5. The bigger picture should be remembered in this chaos- The Larger TF trend is Down .One should be very cautious at these levels and play big only when the Trend in trading TF is in alignment with the immediate TF above, else the contra trades should be light and booked quickly.

6. Is the Market ready to climb 'The Wall of Worry' or resume the 'Big slide' in the second half of this series??

Hope to find some answers or indicators to coming answers in the next Week.
 

10-03-2011:

A Triangle Pattern seems to be developing out of the trading this Week. Keep an eye on break of it on either side. The SAR and targets remain the same as Posted in Update and Weekend analysis below. Trade light ,as suggested earlier too, in this choppy market (May not resolve tomorrow too,but be vigilant)

MID WEEK REVIEW:(09-03-11)

1. Markets this Week has been Choppy and Sideways till now.

2. As indicated in the Weekend analysis below, the broader range of 5400-5600 has been adhered to with trading on both sides of the SAR 5480 (above 5450 levels mostly).

3. FII's have been net Buyers this week.

4. Option data structure is same as on Weekend with bias for some upside increasing.

5. Average VWAP for last two days is apprx. 5520 NF.

6. Volume Profile for last three days shows strength above 5525 and weakness below 5500 level.

7. A Pattern of Ascending Triangle may be developing in Hourly charts. Break of Trendline is near 5500 levels and strength above 5560 level.

8. Prices are above 5 and 20 ema and both are Bullishly aligned.

9. The Weekly strategy given below can still be followed with 5480 as SAR. Long above 5525 level and short below 5500/5480 level may give Targets of 5580/5600+ levels above and 5465,5435 below.

10. One should Trade light and nimble this remaining Week.

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WEEKEND ANALYSIS :( 06-03-11 )
This Week's trading has its importance for the Trend confirmation. After weeks of firm downtrend , prices have closed above the 5wema mark. Now is this just a short term reversal and the downtrend will resume course or is it the start of a new uptrend? such questions may be answered in this Week's trading.


1. Indicators :

Both the Daily and Weekly Indicators are in uptrend and yet to exhaust, indicating the probability of some upmove this Week. Prices are trading near the upper Bollinger Band in the Daily chart ,whereas they have just started moving up from the lower Band in the Weekly ,and have the potential to touch the middle band near 5800 level in a week or two in this uptrend.

2. Volume Profile :

The 10day Volume profile shows 5480 as the Highest Volume Node which may act as a Pivot for this Week's trading . Closing below 5440 level may give a quick 100-150 points on the lower side for the prices to fill the low volume area.

3. Trendlines :

To check the end of this upmove we may keep an eye on the Hourly chart Channel.Trading below the Channel will indicate the temporary end of the upmove.The prices may reverse or consolidate below it.

The Channel in the Daily chart shows the coming Resistance near the Top at apprx. 5650 level which is also near the 200dma mark.

4. Moving Averages :

As mentioned in the Last Post - Interesting Charts ,
The coming Weeks will decide the major trend by trading above or below the 200dma mark at apprx. 5650 level. An important cross / touch & reverse of 50-200dma is round the corner.
Prices have closed above the Weekly 5ema and 20dema at apprx. 5465 , closing below which has probability to trade near the Week lema level at aprx. 5330. Firmly trading above 5600 level may bring the Monthly hema level of apprx. 5825.

5. Option Analysis :

The range suggested by the buildup of Open Interest is 5400-5600 .

6. FII Action :

FII's have been net Buyers in the Cash as well as Derivatives section in the March series.

7. Elliott Wave Count :

The last Wave count Post - Short Term EW Probabilities  is still valid.Please check the Post.
5700 is the game changer level above which the IV wave theory negates and upmove to apprx. 5900 and 6100 levels as in B wave may be seen.


So correlating the data above a likely Weekly strategy can be -

1. Keep 5480 as SAR initially.Trade long above it and short below it.

2. Below 5480 we may get 5440 level and above 5480 ,we may get 5600 level again.

3. 5650 level is a strong Resistance. One may book profits here if the level is reached in first half of the Week. 5440 may act as a good support (Its also an imp. longterm Fibo.no. also)

4. Below 5440 we may resume downtrend again to 5300 levels, above 5650 we may reach 5800 level.These levels may mark the Weekly extremes and will require reveiw when reached. 

 Probability of Prices trading in the range of 5450-5650 is high. One may Trade on both sides of the SAR . Trade light this Week