25 November 2009
Good Morning,
Score Card:
24 November 2009,
Nifty did not perform exactly as was mentioned in the Chart Construction but was close enough. Since Nifty did not cross the Bullish above level on the Chart Construction the Up ward movement was ruled out. This was verified by the movement of the Nifty in accordance of the levels mentioned in the Chart Construction. Nifty made a high of 5112.85 as against the level of 5107 – 5113, which was in the zone of "Bullish Above". The call for the day was to be long in the market. The prognosis was that the market would move higher, and this forecast was not fulfilled. Even when we knew that today it was the Cycle turning day, we still went ahead and recommended a long call. It was an error in judgment and such an error should not have taken place. It would have been better to stay out of the market and sit on the fence. The traders who followed the Chart construction and the prognosis made on 23 November 2009, would have had an unsuccessful day at trading on 24 November 2009. All said and done, the Chart construction for 24 November 2009 was accurate in forecasting the market movement through the day though the recommendation went wrong.
The following are the synopsis of the trades for 24 November 2009.
Nifty Futures: Stop loss triggered. Loss making trade.
Divis lab: Stop Loss not triggered, Neutral trade.
Berger Paints: Strategy not activated.
Kajaria Ceramics: Strategy not activated.
Out of the four trades given one went wrong to one right trade and two trades were not activated. The success of the trades given is about 50 %. Today the trader would not have made money even though the results were at 50 %. The details of this synopsis with the numbers would be given at the end of every month.
Market Summary:
Nifty closed at 5090.55 for the day dated 24th November 2009 with a loss of 13.00points over the previous close of 5103.55 on expanding volumes. Nifty was in a stable environment for the day. The move towards the upside was fueled by a general lack of interest as is evident from the volumes, which were on the sell side. There was a Major Cycle change between the 23rd November 2009 and 24th November 2009 and there could be a possibility that this could be a bull trap in making. The Cycle changing date was yesterday. Nifty gave respect to the Cycle turning date and gave a lower close. It would have been better if the Nifty had given a close below 5085.00 as this would have confirmed the downward trend in Nifty. Although a limited amount of weakness is confirmed on the charts. Let us see what Nifty has in store for the market participants today. By no means have Cycle studies given a confirmed signal on that day itself. One has to watch how the market behaves before taking a call on the market. But rest assured, as and when the market gives a reversal around the Cycle turning dates, the potency and chances of a good price movement against the trend is bona fide. The Market is always right and we have to go by this maxim and only take positions opposite to the trend, only when the markets tell us to. Therefore we would be looking to the Nifty to guide us in the days to come.
Market Analysis:
Nifty closed at 5090.55 for the day dated 24th November 2009 with a loss of 13.00points over the previous close of 5103.55 on expanding volumes. The ratio of advancing stocks to declining stock was in favor of declining stocks although not by much. 578 stocks advanced and 660 stocks declined. The market momentum is favoring the Bears at this stage until the next time cycle takes effect with a confirmation in the price structure. The following is an analysis for the market on 24 November 2009, in short without mentioning all the details.
Price action: Neutral - Down.
Volumes: Expanding.
Trend: Neutral – Down.
Money Flow: Money flowing out of the market.
Volatility: Neutral.
Sentiments: Sellers are in charge.
Market Patterns: Down move in Nifty is suggested by the Pattern analysis, Candlesticks analysis, Indicator and Oscillator analysis, Fibonacci analysis, Gann analysis and Elliott Wave analysis.
Cycles: There is a reversal shown by the cycle studies between 23 November and 24 November. This has taken effect but the close below 5085.00 was not to be. Today the markets may give a close below this level, thereby confirming the existence of this Cycle.
S.W.O.T Analysis:
Strength: Based on the evidence that is thrown up by the Market Analysis it is projected that the Market would move down as most of the parameters point in this direction. The evidence of the analysis tells of the strength the Bulls have is diminishing and the Bears could take over the market in the short term.
Weakness: There is very little strength in the market as shown by the studies except for the Time Cycle which has not yet confirmed the down move. This is a suspect until5085.00 is taken out on a close for the Nifty. Only some untoward incident or a bad news could negate the Bull Strategy today.
Opportunity: Opportunity the market presents, is to be short in the Market. But since Time Cycle has not confirmed by the market closing below 5085.00 be on your guard for a sudden move against the trend. This may not happen but it is better to be fore warned.
Threat: The only threat evident on the Chart is the Cycle Turning confirmation with theclosing price. As we are entering this phase it is prudent to let the Nifty Guide us. Sometimes the cycles can create havoc in Intraday by moving against the trend. If in Intraday any weakness is evident, please exit the Intra-Day trades.
Market Insight and Prognosis:
Taking into consideration the Market Summary and Market Analysis, It can be said with a certain degree of confidence that the Markets are poised to move lower on 25thNovember 2009. It is a day when the Bears will be in charge of the Market. There fore the prognosis is that the Market would move down and the projections are that the trader should be a Bear rather than a Bull with a very watchful eye on the movement in the market. The weekly volume for the ended week was low as compared to the previous week. There by adding credibility to the cycle change that may take place on the given dates. Any way it is for the market to prove this. It is always better to follow the markets than predict the turn around. Use the Daily Chart Construction to guide you through the day. In the markets any thing can happen. If the levels on the Daily Chart Construction are superseded revert to the Weekly Chart Construction. Firstly the close on Nifty below 5085.00 will give the clue to the trend change in Nifty. Incase this happens today, do not take any long positions home. Secondly strictly adhere to the suggested Stop Loss as this will ensure the safety of you capital. Never trade without a Stop loss. Thirdly observe what the Markets are doing near or at the target levels of the stocks given to trade. Relate this to the Chart Construction before you take your decision to exit or enter a trade. If this becomes a discipline with you, then trading would be a cake walk for you.
Wishing you a great trading day.
With Regards,
Ranjit.
