Trade, Live and Thrive

Thursday, May 3, 2012

EOD Technical Analysis, CNX Nifty - 03 May 2012 - Perfect 10

Nifty - End of Day - 03 May 2012

In our weekend post (click - see 'Looking Forward'), we saw strength for the Nifty above 34 EMA on EOD and EOW.

As seen in the circle the Nifty visited the 34 EMA on the EOD - and turned back.

Below the Wall (May) at 5189 we said that the Bears get into the action.

With today's close at 5188 - we have a perfect landing in the Bear's lap.

Having run the full course, we now expect the Nifty to start a trending move on the last day of the week.

Although the Nifty is largely in the red currently, Bulls and Bears are 'Even Steven' on whose trend it will be.

Tuesday, May 1, 2012

EOM Technical Analysis, S&P 500 - 30 April 2012 - Update

S&P 500 - End of Month - 30 April 2012

This is an update to our Weekend Study (click).
The April 2012, month closed on a cautious note for the Bulls. We have the final candle as above.
As one can see from the candle pattern circled - we have a Bearish Harami (low reliability).
If May 2012 closes below the close of April 2012 (i.e 1398), this Harami mutates into a "Three Inside down".
Keeping above the 1398 mark, the Bulls aim for the Red Channel Top.
For those who missed out... here are the recent links we used to study the above patterns.

Bearish Harami (Low Reliability)
http://www.thepatternsite.com/HaramiBear.html
http://www.traderslog.com/bearish-harami-weekly-candlestick/

Three Inside Down (High Reliability)

http://www.thepatternsite.com/ThreeInsideDown.html

http://www.moneycontrol.com/glossary/technicals/what-is-three-inside-down-bearish-reversal-pattern_1683.html
http://www.leavittbrothers.com/education/candlestick_patterns/bear/three_inside_down_bearish.cfm

EOM Technical Analysis, CNX Nifty - 29(30) April 2012 - Update

Nifty - End of Month - 30 April 2012

This is an update to our Weekend Study (click).

The April 2012, month closed yesterday and on a Bullish note.

Close was above our mark of 5220, and we should see the Short MAs (5 EMA / 13 SMA) bullishly crossed over, when the next candle appears tomorrow.

This cross is valid above 5199 for the month.

The Bears can still look forward to the "Three inside down". Studied last weekend.

If Nifty stays above the Wall for the month (5189) and better, above the 5199 - Bulls are safe.

Sunday, April 29, 2012

CNX Nifty 50 - Triple Screen 'Technical Analysis' - Week: 23 April to 27 April, 2012 - Cat on the Wall..

Recap:

After bouncing off the Wall the previous week, Nifty fell with world markets early on (click), and took support at the April Wall (5180).

World markets went the Bull way, for the rest of the week - Nifty did not.

The Nifty sits almost exactly on the new Wall, 5189 (FYI, Wall = Approx Hawala - click).

This cat on the Wall feeling, usually is precursor to a big move.

Let us check out what that could be.

Nifty 50: Long Term View (or) Month Chart, each candle is 1 month's price action (or) EOM Chart:

CNX Nifty 50 - End of Month (EOM) Chart - 27 April, 2012.

Holding above the 34 EMA, Bulls still have control of the long term.

Staying below our mark of 5220 (click and see 3rd point of EOM study) the Bullish cross of our short MAs is not a given.
This Bullish Cross was our anticipated cue for a long term Bull market.

If the Nifty stays below the close of March 2012, the last three candles will make a Bearish "Three inside down".

A quick study of this pattern is a good idea, since Month ends tomorrow.

http://www.thepatternsite.com/ThreeInsideDown.html

http://www.moneycontrol.com/glossary/technicals/what-is-three-inside-down-bearish-reversal-pattern_1683.html

http://www.leavittbrothers.com/education/candlestick_patterns/bear/three_inside_down_bearish.cfm

Nifty 50: Medium Term View (or) Week Chart, each candle is 1 week's price action (or) EOW Chart:

CNX Nifty 50 - End of Week (EOW) Chart - 27 April, 2012.

With a clear close below our mark the 34 EMA, this screen has gone Bear.

Also, last week we observed the Bearish cross of the 5 EMA/13SMA.

The action on the Stochastic indicator is also Bearish, with a deflection of the two lines seen.

Nifty 50: Short Term View (or) Day Chart with closing prices in a line graph (or) EOD Chart:

CNX Nifty 50 - End of Day (EOD) Chart - 27 April, 2012.

Nifty closed below all the MAs that are marked on the screen, except the 200 DMA.

Bearish cross of the 34 EMA below the 200 DMA is our cue for a Long Term Bear Market.

For example; if the Nifty loses 50 odd points every trading day from now - above bearish cross will take about 10 days.

MACD, remains sub-zero. Histogram is negative and MA has crossed bearishly.

Looking Forward:

Staying above the Wall, the Nifty can attempt a move to the Fib 76x.

Strength for the Bulls, is above the 34 EMA on EOD and EOW.

Range to break, is shown on the EOD.
Below the wall, the Bears can take it down real fast - world cues willing.

Saturday, April 28, 2012

The BSE 30 - Ichimoku Study - Week: 23 April to 27 April 2012 - In and out of the Kumo..

......Regulars can skip below and go straight to the chart......

Introduction:

We do a weekly Ichimoku study, to complement our 'Triple Screen Technical Analysis', of the markets we track to learn Technical Analysis.

When taking the 'weekly' time frame, to use the Ichimoku Cloud, we need to consider...

The standard settings for an Ichimoku Kinko Hyo chart are 9, 26, 52 and are used on EOD charts.

When Ichimoku was created back in the 1930s, a trading week was 6 days long. So we have one and a half week(9), one month(26) and two months(52).

Now that the trading week is 5 days, we should actually use 7, 22 and 44 instead.

However, the majority of systems, worldwide, still use the old settings 9, 26, 52.

We need to study markets, on a weekly basis on this Blog.

How do we fit 52, 26 and 9 into that need? With one candle being one week?

There are 52 weeks in a year, 26 weeks form two quarters (or a half year) and 9 weeks equal about 2 months. Fits the old logic - albeit differently.

Presto, we have a longer term view with the same settings!

So, if you like to move off the beaten track, for a change...read on...

Quick Reference :

Chikou Span - purple line,

Kijun Sen - blue line,

Senkou Span A - black line,

Senkou Span B - grey line,

Kumo - grey shaded area,

Tenkan Sen - red line.

Useful resources (free) from the Web:

http://www.freestockcharts.com/

http://www.kumotrader.com/ichimoku_wiki/index.php?title=Main_Page

BSE 30: Medium Term View (or) Week Chart (or) EOW with the Ichimoku Cloud:

The BSE Sensex 30 - End of Week Chart - 27 April 2012

Last 7 Signals seen on BSE 30 - Week Chart (EOW) marked on chart above:

1. Senkou Span Cross: Strong Bearish Signal (S)
2. Chikou Span Cross: Weak Bullish Signal (C)
3. The Kijun sen cross: Weak Bullish Signal (K)
4. The Flat Kumo: Bullish Signal (Ko)

5. The Tenkan Sen/Kijun Sen Cross: Weak Bullish Signal (T)
6. The Kumo Breakout: Bearish Signal (B)

7. Chikou Span Cross: Strong Bearish Signal (C)

Also marked on the chart, in Blue ... to discuss this week's action ...

2: The Chikou Span (purple line) has finally crossed the price line bearishly (C). As this action happened when the Price was below the Kumo, the Bearish Signal is deemed 'Strong'.

3: The last candle has moved back out of the Kumo - Bearish Kumo breakout (B)

Just as in last week, the Price is above the Kijun Sen and M VWAP 34 - This is Bullish .

See circle - the Bullish Senkou Span cross, which seemed imminent - may be delayed.

The Price has moved in and out of the Kumo for quite a few weeks, its still near this wall.

Conclusion: Bulls have lost ground again last week, however staying above the Kijun Sen, Bulls still have a chance to move up.

Welcome Read

The Trading methods used here are suitable for those who (like me) are always Learners in the World Market (never presuming Mastery).

One learns with 'Technical Analysis' using Moving Averages, Channels, Time frames, Pattern & Candlestick Analysis, Fibonacci, Ichimoku Cloud, Oscillators & other Technical Indicators.

To comprehend the Dynamics of any Market, Peer Wisdom suggests, that we show plenty of Patience, keep it real Simple and adopt tons of Discipline.

We therefore use the same framework 'Patiently' every week - 'Simple' Technical Analysis Tools are repeated - The 'Discipline' of keeping a Neutral view is maintained.

So welcome to my notes - posted here for my Friends and Family.

Some Quotes..

There are times when playing the stock market that your money should be inactive - waiting on the sidelines in cash - waiting to come into play. In the stockmarket - time is not money - time is time and money is money. Often money that is just sitting can later be moved into the right situation at the right time and make a vast fortune – patience – patience. Patience is the key to success not speed.

Jesse Livermore.

That's been one of my mantras - focus and simplicity. Simple can be harder than complex: You have to work hard to get your thinking clean to make it simple. But it's worth it in the end because once you get there, you can move mountains.

Steve Jobs.

Discipline is the bridge between goals and accomplishment.

Jim Rohn.

Favorite Quote

"Why do we trade?

To be sure, trading allows us independence, the opportunity to work for ourselves. Trading also offers the prospects of a lifestyle in which evenings and weekends need not be consumed by work. Some of us crave the competitive aspect of trading, doing fresh battle each day. Others approach trading as a puzzle to be solved, deriving a sense of intellectual achievement. Finally, there is income. A successful trader can make seven figures in a year—and many of the traders I work with are living proof of that.

So why do they trade? Once you have the money, all of trading’s lifestyle advantages could easily be yours. Needs for competition and intellectual stimulation could be met in so many other ways. Why do traders remain traders long after they’ve won the game?

The great professions are those that serve as personal playing fields. They are the arenas we choose to express and develop ourselves. In mastering a discipline, we cultivate self-mastery. In writing a poem or placing a large trade, we capture—in a single act—our vision of how we see the world at that moment.

The great occupations are great precisely because they are such meaningful playing fields. Long after we’ve earned fame and fortune, the calling remains to be more than we are, to return to the arena and do battle with our limitations. The profound urge to extend the human grasp is common to all the great callings. To run faster, to capture more beauty, to predict ever better: in no small measure, our work is our pursuit of the godlike, however fleeting.

Maybe it is our different images of the godlike that animate our career choices.In work we find something divine within ourselves. Whether as scientists, monks, or traders, we strive for those moments when we are just a little closer to perfection, a little nearer to immortality. That is why we trade"

.... Brett N. Steenbarger

Inspiration

The Parable of Talents...

14 For the kingdom of heaven is as a man travelling into a far country, who called his own servants, and delivered unto them his goods. 15 And unto one he gave five talents, to another two, and to another one; to every man according to his several ability; and straightway took his journey. 16 Then he that had received the five talents went and traded with the same, and made them other five talents. 17 And likewise he that had received two, he also gained other two. 18 But he that had received one went and digged in the earth, and hid his lord's money. 19 After a long time the lord of those servants cometh, and reckoneth with them. 20 And so he that had received five talents came and brought other five talents, saying, Lord, thou deliveredst unto me five talents: behold, I have gained beside them five talents more. 21 His lord said unto him, Well done, thou good and faithful servant: thou hast been faithful over a few things, I will make thee ruler over many things: enter thou into the joy of thy lord. 22 He also that had received two talents came and said, Lord, thou deliveredst unto me two talents: behold, I have gained two other talents beside them. 23 His lord said unto him, Well done, good and faithful servant; thou hast been faithful over a few things, I will make thee ruler over many things: enter thou into the joy of thy lord. 24 Then he which had received the one talent came and said, Lord, I knew thee that thou art an hard man, reaping where thou hast not sown, and gathering where thou hast not strawed: 25 And I was afraid, and went and hid thy talent in the earth: lo, there thou hast that is thine. 26 His lord answered and said unto him, Thou wicked and slothful servant, thou knewest that I reap where I sowed not, and gather where I have not strawed: 27 Thou oughtest therefore to have put my money to the exchangers, and then at my coming I should have received mine own with usury. 28 Take therefore the talent from him, and give it unto him which hath ten talents. 29 For unto every one that hath shall be given, and he shall have abundance: but from him that hath not shall be taken away even that which he hath. 30 And cast ye the unprofitable servant into outer darkness: there shall be weeping and gnashing of teeth.

The Holy Bible: Matthew - Chapter 25.