Trade, Live and Thrive: zone

Showing posts with label zone. Show all posts

Monday, March 19, 2012

EOD Technical Analysis, CNX Nifty - 19 March 2012 - Bingo!

Nifty - End of Day - 19 March 2012

We concluded last weekend that the 34 EMA should be held by the Bulls to stage a comeback (see last two sections of post here). By the close of the third hour of trade the Nifty had fallen below the 34 EMA (5305) and thereon crashed by 60 odd points. Alert Bears should have enjoyed the action.

The channel bottom (green line) and our range bottom (200 DMA) beckon even as the 5/13 EMA cross stands at touch and go....touch and go (if the cross fails) produce the best bounce backs....the current hope for the Bulls.

Sunday, March 18, 2012

CNX Nifty 50 - Triple Screen 'Technical Analysis' - Week: 12 March to 16 March, 2012 - Bear Hug.

Recap: With the Nifty moving above our mark for Monday last - of 5343, all the way to the Wall at 5484, we had the up move of the week. Thereafter as anticipated (see Looking Forward and EOD here) the Wall sent the Index back towards the 200 DMA. Nifty took support on the 34 EMA (EOD). After the expected volatility of the Budget, where to now?

Nifty - End of Month Chart - 16 M arch 2012

CNX Nifty 50 - Month Chart (each candle is 1 Month's price action): Still in a good place for bulls as they anticipate the 5 EMA crossing over the 13 EMA as a confirmation of long term Bull trend. This is in addition to the 34 EMA over the 200 DMA and the Golden Cross which are already on (EOD). Currently, however this month's candle is in line to form a Bearish Harami.

Nifty - End of Week Chart - 16 March 2012

CNX Nifty 50 - Week Chart (each candle is 1 Week's price action): The Bulls have not been able to get a single green week after bouncing back from our channel top line (red), 4 weeks ago. Post the bounce off the 34 EMA the week before, it has shown some intent to give this bugbear another shot.

Nifty - End of Day - 16 March 2012

CNX Nifty 50 - Day/EOD Chart (closing prices of each Day in a line): Last week's action was in the range we expected. Keeping above the 34 EMA another shot at the Wall (5484) is in order. If it stays below the 5 EMA however, a bearish cross of the 5/13 EMAs would again send it on a tail spin. So one watches these levels.

Looking Forward: With US and Europe in the oversold zone looking at a correction for health reasons, the Indian market would have to swim against the tide to make an up move. 34 EMA on the EOD and the Wall are important levels. Intra Week updates shall be up.

The Dow 30 - Ichimoku Study - Week: 12 March to 16 March 2012 - Gravity and Equilibrium.

DJI 30 - End of Week Chart - 16 March 2012

Our previous Study with the 'Cloud' (post here) proclaimed that the 'Bulls have it all'. And yes, they did decisively surpass, last year's high, as if to emphasis the point.

Please read previous study, for ALL the signals/indications that the Cloud has thrown up recently. As you would have read in our first Ichimoku post's reading material, Ichimoku is all about using the messages from multiple signals, not just the latest.

This weekend we focus on one aspect of the Cloud - the 'FLAT Kumo'. As you can see - marked 'G' in the chart, the Senkou Span B (grey line) appears flat from now on..

We know that the SENKOU SPAN B is the (HIGHEST HIGH + LOWEST LOW)/2 for the past 52 periods time-shifted forwards (into the future) 26 periods. Look at 'F', a trend less time, which fits the above, as the formula would produce a flat line just about now.

The Flat Span implies Equilibrium and because Price loves to get back to equilibrium, the flat senkou span B becomes strong attractor of the price-line towards it.

One can see the Flat Senkou Span B, doing exactly this, during Dec'11.

Could be early times for that to happen, but one likes to be in the know. Why else study?

S&P 500 - Triple Screen 'Technical Analysis' - Week: 12 March to 16 March, 2012 - Sedate Highs..

Recap: By the end of last week, (see Looking Forward) we saw the SP500 on Bull mode, but for the 5/13 EMA cross. Early this week the Bulls took care of that minor detail, and moved from the bottom end of their channel, (see EOD) to the exact top end...where despite crossing last year's high, the Bulls hesitate...lets find out why..

S&P 500 - End of Month Chart - 16 March 2012

S&P 500 - Month Chart (closing prices of each month in a line): The Price line here, looks like its making a steady progress, to the red channel top. Above all short term EMAs, and with a decent rate of climb, this view looks good for the Bulls. Lets get closer, with the chart below.

S&P 500 - End of Week Chart - 16 March 2012

S&P 500 - Week Chart (each candle is 1 Week's price action): Sticking to the bottom of our weekly channel's center line, steadfastly, for a long time now.. the Index is again in a position of strength. The only thing going for the Bears, would be the clear divergence between the price and the Histogram below it. So will the price make it to the channel top? Zoom in below..

S&P 500 - End of Day Chart - 16 March 2012

S&P 500 - Day (EOD) Chart (each candle is 1 Day's price action): With a dedication almost boring, the Index is stuck to the Day Channel's top line, a mite below the Weekly channel's center line, for ages now. If this continues, both Bulls and Bears will fall asleep. Nah! Just kidding :). Divergences are becoming persistently loud here, as one can see from the STS Indicator below.

Looking Forward: A decent correction looks like the best medicine for a comatose Bear and Tired Bull. Problem is, oversold Indices can go on & on, in the same track, for a long long time. However lets get brave and make a risky call....Correction time :)

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.

Saturday, March 10, 2012

S&P 500 - Triple Screen Analysis - Week: 05 March to 09 March 2012 - Doji'ng the Bears..

Recap: The SP500 was resisted at last year's high and we looked for direction in last week's study (post here). The index had developed a Bearish Harami on the EOD and it was below the 5 EMA. However we had assessed then, that it was not yet 'Advantage Bears'.

In last weeks action the Bulls took the index back above the 5 EMA on the EOD charts and this fightback keeps the Bulls on top - what next?

S&P 500 - End of Month Chart - 09 March 2012

S&P 500 - End of Month Chart (EOM): The MA crossovers we studied last week are still in place, the divergences have vanished as of now. This chart looks distinctly Bullish, but for the hesitation written on the peak - in struggling to move above last year's high.

S&P 500 - End of Week Chart - 09 March 2012

S&P 500 - End of Week Chart (EOW): After 4 weeks of staying above the 5 EMA, this week's candle has taken support near the 10 EMA. The Bulls have dodged the Bears this week with a 'Doji'. So let us read about that - as a refresher from some free resources on the net...

http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:introduction_to_candlesticks
http://www.candlestickforum.com/PPF/Parameters/12_221_/candlestick.asp
http://thepatternsite.com/NorthernDoji.html

S&P 500 - End of Day Chart - 09 March 2012

S&P 500 - End of Day Chart (EOD): The Bulls were happy to stay within the same channel as last week, and stage a bounce back, to end on top, above the 5 EMA. The Bearish cross of the 5 EMA below the 13 SMA remains - leaving the Bulls with diminished momentum.

Since we are a Study Blog - here is something to mull on...inspired by the last three candles on the chart above..

http://www.moneycontrol.com/technicals/news/candlestick-patterns/advance-block-bearish-reversal-pattern_578785.html
http://www.fxwords.com/b/bearish-advance-block.html
http://thepatternsite.com/ThreeWhiteSoldiers.html

Looking Forward: The long term Charts viz. the EOM and EOW, are in Bull mode. On the EOD one sees some hope for the Bears. If the 5 EMA 13 SMA cross remains Bearish and the price then breaks below 5 EMA, one sees early signs of Bear strength. Staying within the current channel on the EOD keeps the Bull safe for now.

Friday, March 9, 2012

EOD Analysis CNX Nifty - 09 03 2012 - Between the DMA and the Wall

Nifty - End of Day - 09 Mar 2012

The Nifty took support exactly on the 200 DMA (Intra-day) yesterday, as we studied here (go here for post )

The Nifty crossed back above the 34 EMA also today. Our note that the 34 EMA and 200 DMA are good supports (go here for post) played true.

The cross of the 34 EMA over the 200 DMA looks good even now.

Notice the volume action.

Between our Wall at 5484 and the 200 DMA currently around 5165, is the battle zone for now.

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.