Tuesday, June 21, 2011

Interesting Charts - Nifty

This is a follow up of some of the relevant charts posted earlier, that have changed the structure in today's rally. The Markets gives some message with each day and each trade.

Trading is a Business of managing uncertainities. If there was a certainity in the Maket ,it will cease to exist . Acceptance of uncertainity is a virtue and reacting to it is the way to trade . We all trade our beliefs in the arena and have no control over the markets , but importantly we can control our actions and be hedged against our own beliefs . The most difficult part of trading is to manage oneself in realtime , trade the screen , control the risk and leave the bias when price action says it to . All this can only come if the rules of the trading system are set in place and above all are followed with discipline. Let no loss go without a lesson and be able to shake the confidence .Probabilities have to be traded but with proper risk management. Easier said than done, but that is why only a few succeed here.

You Cannot Change The Direction of the Wind , But You Can Adjust Your Sails !!!


These pictures tell the Story till now and that to come ahead --------------

1. Head and Shoulder Pattern is a topping out , Reversal pattern . It has been been confirmed on Weekly Charts. Just guess the Target !!!.

The most difficult thing in Trading is to believe and trade what we are seeing on the screen.

2. A 20 month strong Trendline supporting in Daily charts has also been broken. Staying below it will bring more weakness.

The Support does not holds in a Bear Market , same as Resistances give way in a Bull Market. In a Panic condition ,People will always look for Exit doors first.

3. All the Important Moving Averages in different Time Frames are Bearishly Aligned.

Keep in mind ,what the Dow Theory says - A Trend should be assumed to continue in effect untill such time as its reversal has been definitely signaled.


4. A Triangle Pattern also broke down being effective since the start of this Year.

Many Traders believe they are too late when they stumble across a breakout in progress, Infact they are often too early.

5. The Long Term Fibonacci Charts will come into play now.

Make Hay while the Things go Haywire !!!

6. If this Expanding Triangle Pattern unfolds , 4800 will be a conservative Target only. !!!

Remember that There is nothing in a Caterpillar that tells you that it is going to be a Butterfly.

So a Bear Story is unfolding , it has just begun ----------

 Hasta - La -Vista !!!


Unknown said...

Thanks Rajeev for simple and timely update.
Sorry was not able to comment on some past posts.

Anonymous said...

thank boss... great home work... keep updating..

AAR VEE said...

@ Jigs-
Thanks for the comment here.Its imp. that friends give regular feedback and criticism too :)


saz said...

Aarvee sir,

GM, thanks for the indepth analysis....it's very useful for novices, like me....

best of reg,

KRG said...

Left this comment at Jazz's. Thought your pic as above matched my feelings...

"If the major B ended at 5900, the implication would be very bearish as the pattern ended at a lower high. The bears now have the SHS breakdown as a pattern with target of 4750, however, the bearish implication as above means that the eventual target has to be much more……

Has the last standing bull died? While my none-to-write-home-about mid-cap portfolio keeps posting losses, I humbly submit the bullish case still holds. And a sharp break of May 09 level (below 4800) will be the last straw !! Though I still hope for a bear squeeze somewhere around 5k … In the meanwhile hiding from the roars of the mighty bears…."


AAR VEE said...


Nicely put post KRG.
Below 200dma and after 50-200 death cross little is left to say that we are in a bear mkt whatever count we are following.
Though i will like to stick to my preferred count giving me right direction and money.
Conservative target for downmove is apprx. 4800 and if extends then to 4000 levels !!!.
Only hope for the bulls is the ultra bearish calls .I hope many put fwd the bullish case below sub 5000 levels for bears to make merry.

KRG said...

AAR VEE: Thanks. Totally agree on the targets and the fact that the only hope for bulls is the extent of bearish calls.. In fact,I feel that the "price" is not really bearish (as we are yet to reverse the May 10-Nov 10 rally fully), but the sentiment and the mood seems ultra bearish. So is fundamental news (inflation, political scams etc, vulnerable rupee, high interest rates, aggressive RBI and so on). A nice situation for a squeeze....

AAR VEE said...

@KRG -
Rightly said ,the'mood' seems to be ultra bearish.may be due to planetary conditions ,we are in puetz window of crash and its showing its effect !!! .

Jatin said...

Rightly said RV..
Give me RED

manu said...

all red and me blue..

keep watching Bn..
if v go below 10340 then i will think
of pink not even red..

KRG.. i m with u..the triangle still exists..

cant say abt this expiry but when ppl write ce naked..they need a bath..

5400pe got a bath now ce turn ..
moral of d story ..dont bath naked :)

rmbr one thing fall s still n low volumes..
hi jazzy,krg,rv

kamal said...



satheesh said...

@ aarvee,

Very nice and clear charts. Good analysis. I always like your step by step analysis. Thank You.

kamal said...

senior people

somebody plz reply about my questions. i m confuse here about long of bank nifty.

Unknown said...

As usual nice observaton. So much to learn from you. Thanks a lot.

Kumar Technicals said...

Dear RV!

You did splendid job as usual. I always love to see ur work, missed this time but thank to FIRE bcoz he sent link at JUSTNIFTY. Keep it up & take care of you, consult me if needed any time for anyone's health.



AAR VEE said...

Sorry Folks ,looks like missed some action today.Thanks to Fire (Fire starter) for posting the link at JN.

Welcome all and Thanks for taking the time to read and comment on the post.

'EverReady' to give the 'Red' :))

I think that once a big O.I.(80lakh +) strike gets hit ,it signals a shift of trend and the lower strikes of that category goes on being hit.In a bull mkt. normally they are the calls,Now i think its the puts and soon u will see the 5200 ones running for cover from the grizzly :)

Sorry ,no indiviual trades given or discussed here,only a trading insight for Nifty.

Thanks very much.

Thanks and nice profile pic ,I think I have seen him somewhere :))

@Kumar ji-
Thanks and mailing you for some consultation regarding my father.Infact I had asked for your mail id. few days back to couple of blogmates but was unable to get it.
Nice of you to give a helping hand 'suo motu'.Thanks again.

mridul said...

every time gud and gud nothing more to say. why on one talking for a relief rally or a panic short covering rally to give some oxygen much needed for bulls.

AAR VEE said...

Thanks ,

The bounces till now have been very shallow which have been met by aggresive selling ,mentioned in last post also.

No talks of a relief rally because of that, secondly there may not be much short in the system for a short squeeze as the data shows for buy on dips happening and nifty in premium most of the times.
Lastly, market is in no business to provide oxygen ,have it in mind that markets do just the opposite -it will suck the last of the oxygen from the participants on the wrong side stuck in dire straits :))thats how the money is made by some - strangulate the majority.

Anonymous said...

Lovely charts as always sir ! Pleasure reading your posts.

Take care.

AAR VEE said...

Thanks ( and pl. no 'sir'calling )

Piyush Sharda said...

thanx rv for yesterday and nice post. better late than never :-).

normally as per text book triangle shud have zigzag as abcde waves. zigzag means 535. however this a 6338-5177 is 3. now i am not able to find out anything concrete why c frm 5944 shud be 3 or 5.

bizagra said...

Dear Aarvee, plz give short term counts. Now started feeling uncomfortable with shorts.Wht sud be SAR level now??

bizagra said...
This comment has been removed by the author.
AAR VEE said...

If its iv of the 3rd then shouldnt cross 5437 and if wave 4th of the 3rd then 5480 will be the point of invalidation.

Today it has closed above 5dema after many days as well as above 2d highand 2d high vol.node.It may be a whipsaw as generally seen in the 4th wave or may be a genuine ST turnaround since the bottom of monday.

bizagra said...

Dear Aarvee, with so much bearish charts, took all my profits. Wht now..r we still in corrective??

AAR VEE said...

Hi bizagra -

Frankly I find ur comment quite interesting."with so much bearish charts, took all my profits."

No offence but I should ask u few questions which will help u introspect to become a better trader.Please go through them and seek answers-

1. Had i given a trading call which took ur profits?
2. Do u have a trading system?
3. Do u follow it with discipline?
4. Are u a responsible trader or u always find someone to blame for a loss ?
5. Are all traders and analysts perfect ?
6. Is there someone who has not made a loss in the market?
7. Do u have the capacity to listen to everyone but trade ur own system?
8. Are u improving ur trading by fine tuning the system ,reading and backtesting?
9. Are u hopping from blog to blog in search for a Holy grail?
10. Do u give the most importance to price and volume and take into consideration that any sure pattern and theory may go wrong anytime?
11. Do u have a strategy in place to limit ur loss when market moves against ur bias ?
12. Do u follow part booking of profits ,money management and position sizing systems?
13. Do u understand the perspective and trading style of the person u r following ?
14. Is ur trading style suited to the analysis of the person ur following ?
15. Do u use stoplosses and SAR's to limit loss and be in trade in a reversal ?

Sit down and answer urself these questions with utmost truth ,if U follow the answers u arrive at ,u will become a far better trader than u are today .


bizagra said...

Ohhh Aarvee, u took me totally wrong, i was not blaming u, it was totally my mistake,i was drowned into total bearishness of crowd and charts. I actually meant charts were very bearish still it reversed.Even i m not here for tips.
Let me tell u ,i m a learner and trying hard to contain my emotions in trading and getting good results.
I only visit 2 blogs, one Ilango sirs and second yrs.Though Ilango sir is a genious still i find yr blog lot more simpler to understand.
I follow Ilango sirs JNSAR and trying to improve with yr method.
Now in this trade, the mistake i did was my head was only saying 3rd of C,so didnt part booked and instead of obeying JNSAR 5385 i took 5450 as sl.No problem with no profit in this trade as all system fails sometimes.
Plz dont take me wrong, i m learning from Ilango sir and u and getting good results.
Still saved yr above given points to improve.Waiting for yr next update for next trade.
Thanks and happy weekend

AAR VEE said...

bizagra -

I can get ur point ,but my comment too was written in a positive spirit and nice of you to take it in that way. But still i will request u do seek answers.

Please also develop some hard rules for yourself so as to save the precious trading capital.
-if u are trading a pattern check the point of invalidation of that pattern.
- If EW then be sure where the count goes wrong.
-If price action only then see the price action (close above lema or trading above 5ema etc)
- If volumes with price then know the high volume nodes in different TF

Be prepared with these figures before each day.Know ur TF and Risk profile.

Dont mix systems ,if following JNSAR then do it whole heartedly and make rules for it ,dont mix with EW etc. All the analysis is just a guidelines and will go wrong at somepoint ,but u should know where to stop following it.The trading system if proper will never fail ,its we who fail the system by not following it .Only u can trade for yourself.

We all have failure loss making trades but imp. is to preserve capital and trade the next day. Taking a small loss in form of S/l is not at all bad. but more imp is to learn how to reverse with help of a SAR and leave the bias.

We all are learning and are resposible for our own development.Faster we learn better will it be for our bank a/c and thats what is most important ;))

Thanks and have a nice weekend