In last weekend’s post printed here, Viren had made a case for this market to be sold into at every rise throughout the week.
The market began the week by attempting to get over 6160, failed and finished the week at 5875, roughly a range of 300 points from top of the week to the bottom.
On friday, we saw signs of an early capitulation as investors headed for the exits after the oft defended 5925-5937 levels gave way in the Nifty future.What didn’t help matters were rumors of the prime minister resigning, as a web page from 2008 landed in our trading room as well !
Capitulation or not, we will know only next week when the markets open, but the fact remains that the Nifty has a lot of work left ahead to resume it’s faltering uptrend.
We at Vtrender are not in the business of picking tops or bottoms, but have reasonable conviction to state that the bottom may be just 100 points from Friday’s closing levels.
Have a look at these charts :
The charts are a composite profile of the Nifty future for the past 100 days divided into three profiles each of 30 days. The Purple within the charts are the value areas.
On Friday the selling stopped at the high volume region of the 9/10 ( September) profile at 5860 region.The zone between 5860 to 5930 remains a low volume zone and the market may go sideways in this zone as it attempts to redefine value after Friday’s failed attempt at 5962-6000 zone.
The easy move would be above 5930 to 6000 levels or below 5860 to 5775 regions.We estimate the 5775 region to be the swing low from where a reasonable 200 point rally should materialize. If the market does get to 6000 before that ( arrow in chart) it will have some tough answering to do and only a move above 6080-6150 on the monthly time frame will give the index an all-clear for new highs.
The key for Monday and Tuesday will be 5860-5930 region.
The levels for the Nifty spot are shown above with the bottom projected at 5850-5755 levels.I’ve put up the chart as next week is expiry and there may be movements in the future of 50 points from discount to premium as smart money will try to induce fresh shorts or shake out weak longs out of the auction process.Remember option expiry is also slaughter house for the new option writers, so put a smile on your face as new writing appears in November options.
The past two days have been extremely volatile even for us in the trading room, but a quick look at our orderflow indicators tells me that they have survived a fiery baptism in our markets.It’s two way markets which have been the graveyard for most of the indicators worldwide, but our orderflow indicators did a great job to put us in line with the trend. Have a look :
9 great trades in the past two days when the Nifty future was doing 40 points in about 15 minutes on an average.The method is an intra-day stop and reverse method. You do not need any great TA knowledge to follow these, as the indicators have been taught to follow the best of Market profile (without the fear and greed).Buy when lower pane is blue and reverse when red.
We are throwing our doors open for one day only to all of you on Tuesday to come and have a look at these indicators doing a job ! Actually we have two of them in the trading room, one designed to catch 10-20 points swings and one like the above designed to keep you in larger trends of 40 points each.
The Vtrender Open House is on Tuesday from 9.15 am to 4.00 pm.Invitation is open to all and completely free.All you would need to do is send us an email, so that we can issue you a password for the event.You can be with us the whole day or anytime of your choice. The doors will be kept open all day.
Mails for entrance can be sent to firstname.lastname@example.org.
Have a pleasant weekend !