Trade, Live and Thrive: 03/11/12

Sunday, March 11, 2012

CNX Nifty 50 - Triple Screen Analysis - Week: 05 March to 09 March 2012 - Poised !

Recap: The Nifty drifted below the 34 EMA on the EOD last week (post here)- bounced off the 200 DMA (post here) and is just in the Neutral zone as of last weekend. The EOW chart also shows a precise take off from the 34 EMA on the weekly charts. Overall our note that the 34 EMA and 200 DMA zone, would hold the bears, rang true.

Nifty - End of Month Chart - 09 M arch 2012

CNX Nifty 50 - Month Chart (each candle is 1 month): Taking support on the 5 EMA the index has closed above the 13 SMA. We now zoom into the area marked with a blue square for a closer look..below.

Nifty - End of Week Chart - 09 March 2012

CNX Nifty 50 - Week Chart (each candle is 1 week): With a clinical take off from the 34 EMA (see blue oval) the Index almost formed a Doji this week. Bulls would have been confident going into Budget week if the close were above the 5 EMA. The STS shows the action of the resistance line. We now magnify the portion in the Blue square with the chart below.

Nifty - End of Day - 09 March 2012

CNX Nifty 50 - EOD Chart (line chart of close prices): The closing price disguises the action on Wednesday where the Nifty bounced off the 200 DMA like a vetran! The 5 EMA and the 35 EMA form a touch and go (Bullish) as of now. Bullish cross of the 5 EMA above the 13 EMA should be the precursor for the next Bull move. Bulls Smile above 5343 for Monday and Laugh above 5484 (Wall) for the month.

Looking Forward: World markets (US, Europe) are largely back in the green. India as seen in the previous study is not is the best of places after the recent fall. With the anticipated volatility, our range on the EOD chart should give some good trading moves. Trending times are below the 200 DMA or above the Wall.

The BSE Sensex 30 - Ichimoku Study - Week: 05 March to 09 March 2012 - Bears have it all.

BSE 30 - End of Week Chart - 09 March 2012

Please read 'Preamble' from here. We are replacing the Ichimoku Study on the Month chart with this Weekly Study.

The BSE Sensex 30 - Ichimoku - End of Week Study.

A: Senkou Span Cross: On the chart the grey cloud is the Kumo. Notice that the cloud's borders have black and grey lines - and they cross each other at the point marked by 'a'. So the Senkou span A (black line) crosses the Senkou span B (grey line) from the top down, and that makes it a 'Bearish Cross'.

The effect of this Cross was felt 26 weeks before the cross, at the candle marked by 'A' - as this candle is below the Kumo we have a 'Strong Senkou span Bearish Cross'

The Index has fallen from 18500 odd to 15500 after this signal was felt at 'A'

B: Chikou Span Cross: The purple line is called the Chikou Span. At the point marked by 'b' it crosses through the price curve from the bottom up, this is a bullish signal or buy.

The effect of this cross is felt 26 weeks after the cross at the candle marked by 'B' - however as this candle is below the Kumo we have a 'Weak Buy on Chikou span Cross'.

We notice that the index moves up a couple of candles, faces resistance at the Kumo and then falls - after the event at candle 'B'.

C: The kijun sen cross signal is given when price crosses over the kijun sen(blue line). If it crosses the price curve from the bottom up, then it is a bullish signal. A weak kijun sen cross Buy signal takes place when a bullish cross happens below the kumo. We have a weak Bullish cross.

D: The Tenkan Sen/Kijun Sen Cross happens when the tenkan sen crosses over the kijun sen. If the tenkan sen crosses above the kijun sen, then it is a bullish signal. A weak tenkan sen/kijun sen cross Buy signal takes place when a bullish cross happens below the kumo. We have a weak Tenkan Sen/Kijun Sen Cross.

E: The price bounced back from inside the Kumo (grey cloud) and broke out below it.

Bears seem to have it all going for them as above.

F: The last input - we see that the price just about took support on the 'Tenkan sen (red line)'. If it now moves back into the Kumo and breaks out above it... the Long term Bull will smile.

Also see the action of Price on the M VWAP at the last candle.

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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.