Wednesday, February 2, 2011

Rangebound Trading Ahead ???

1. FII selling mode somewhat curbed ,selling only 80cr today.

2. The Volume profile of this week's trading is balanced between apprx. 5500 and 5400 level with POC at apprx.5460. All these levels are also imp. moving averages marked in the chart.

3. The Bollinger bands are also showing top and bottom between 5500 and 5400 levels.

4. The Options analysis also shows consolidation of the 5500 calls and 5400 puts ,both strikes are having highest O.I. in respective segements.

5. Volumes were lower than last two days.

6. EW count as suggested yesterday may be in the (ii) wave of the iii of the 3rd. A complex correction of this (ii ) wave may unfold in the abc-x-abc pattern such that the prices are range bound in the 5500-5400 range with a whipsaw or two.

7. Next flash move will occur on convincing break of any side ,upwards of 5500 or downwards of 5400.

8. Cause of concern for Bulls may be the Index option Put/Call Ratio hovering below 1.0 and probability of  (iii)-iii-3 unfolding below 5400.

9. Range bound trade may give the impression of markets holding the multiple lows of 5400 levels and calls of aggresive buying for PreBudget rally in oversold markets will fly around , But won't this be the ideal Bear Trap !!!.

Give it a thought and trade  against the Trend only once the Markets crosses the Points of Invalidation of your trading system. Be patient and give importance to what markets are whispering to u via the screen.


Sanjay said...

Dear Rajeev,

Unable to view ur other blogs.

Again an excellent analysis. As it says "Trend is your Freind"

Thanks & Regards


AAR VEE said...

Hi Sanjay,

I used to write my these Eod and Premarket types of thoughts at 'My Trading Diary'.It had some Intraday and Eod utilities link too .But the response and requests i got on mail, requried some 'M&A' activity.I will be shifting the utilities to 'The Third Eye' on the weekend.Please excuse me till then .Thanks

Sujeet said...

Hi RV:
Unable to understand the complex EW counts:)but very nice explanations...


AAR VEE said...

Hi Sujeet

Same here ,even i dont understand the EW ,but try to count the waves and corelate it with other data.If all gels than trade ,if in doubt stay out and if crosses the point of invalidation of the EW count or vol. profile etc then reverse.Thats the mantra for me .
Think hard ,clear ur vision ,trade ruthlessly and reverse with flexlibility .No hard boundings with my own analysis too.

mynac said...

Well said....Be patient and give importance to what markets are whispering to u via the screen.

Appropriate for tomorrow's trading.Thanks.

AAR VEE said...

welcome mynac,

whats ur o.i. and nifty futures volume analysis saying? it is still bua or chacha?:))

Piyush Sharda said...

ur 5450 worked great yesterday. looks like 5440 will be today

AAR VEE said...

Hi PS,

Ideally would like to trade the top and bottom range with poc as the SAR intraday.

KRG said...


Nice charts.
Any thoughts on RIL?

AAR VEE said...


Not following RIL closely from quite sometime .