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NIFTY weekly view July 27 -31Update to structure and certain assumptions that proved wrong I was thinking that the 10700-10920 area won't be crossed easily. But it was crossed with 2 gaps. And in two days NIFTY is near the 11200 area. For the last few weeks, I have been putting a structure of rising wedge that does not look valid. There are too many divergences and it is not a clean technical pattern as I like. Hence I am removing that structure and just trying to understand NIFTY with the typical ‘Buy the dip’ structure. I was also wrong about regime change that I talked about a week before. Market is still in uptrend and showing some different signs, which I’ll explain later in the post. ================================================================================================================================================================== Some observations about NIFTY In the current up move, NIFTY has moved 7500 to 11200, that is 3700 point rise. That is close to 50% in just 4 months. NIFTY has been rising 6 consecutive weeks. Reactions to results have been largely over enthusiastic. Example stock like Infosys increased 40%. There has been a stock which has been darling of the investor ~ Reliance Industries showing gain of 13% in a week. NIFTY price to earnings ratio is 29.35. This is really a roaring bull market in the shortest time. ================================================================================================================================================================== Some behavioural observations Retail participation increased. There are many ‘Guru’s selling their great services and their clients making money for the last 4 months. Brokers showing a surge in new account activity and new money is flowing into trading. At the same time mutual funds are having a tough time with inflows. Many retail participants, who are usually on the long side of the market, are being successful following simple 'buy' strategy ================================================================================================================================================================== What is next? All these indications are pointing towards a situation of some kind of bubble. Like all bubbles, I do not have idea when this is going to end. This is going to end because this is the kind of situation where no seller is interested in selling. Market always functions on the fight of buyers and sellers and the balance of power between them It is not possible to catch the exact top. It is also not possible to understand when the market is close to the top. ================================================================================================================================================================== What retail traders and investors can do? As an investor, definitely do not invest in such situations. It is better to stay away from fresh investments. Also for rule based investors, this is the time to definitely change allocation from equity to other asset classes. It is difficult to short the market at the correct time, and especially in these kinds of bubbles. Because the shape and structure of the top is not really well formed or with a known pattern. ================================================================================================================================================================== My view for next week I feel there are few very important levels, yet to be crossed. One such level I am watching is 11269, 11370 and then 11600. There are chances that NIFTY may show picture perfect reversal at these levels. So it is better to attempt limited risk shorts at these levels. For reliance, 2250-2350 is the zone where technical reversal is possible. The chart shows the possibility of breakout which can go to 11270 and 11370 levels. ================================================================================================================================================================== My trade plan for next week Intraday avoid getting short Avoid short positions which are not at significant levels or naked option sell positions. Avoid futures Buy Puts at important levels and be prepared to lose money with it. To balance the put position, have an intraday long position either through buying calls or selling lower strike puts. That's all for the week!
NSE:NIFTY
by Observe_Think_Act_Think
4
DXY Update. Hourly Chart; Fighting for a Key LevelStill seems bearish on DXY . We can see here DXY has broken 95.20. It seems to be holding below on the lower time frames but its still a bit early to tell. Ideally I'd like to see 95.25ish hold as resistance and then look towards 94.75 for closest support. My Eur trade got stopped. Usdcad , UsdChf , and Usdjpy are all looking good and have stops well into profits now so we are just waiting until this chart shows us what it wants to do next. Message me with questions, comments, concerns, or for my analysis on a specific pair. If we do turn bullish I will wait for a retest of where ever we took off from and look to get in possibly on a nice retest
TVC:DXYShort
by UnknownUnicorn843992
In the very short term here is a long trade idea on EAHere is another Forex Trading Snack. This is an example that I saw in the market this morning ( my morning ) and my trade setup as I took it, long with my thoughts as I planed it out. Price action certainly has changed while I was slowly typing this post. Just an example of how I trade a larger true average range currency pair. The plan here is to trade long in a short term trade but I believe counter trend in a longer market view. Let’s face it trading a pair that has also this kind of daily true range isn’t easy. I mean why risk more then you have to. Right? In my book I try to risk less even though I could live with that kind of daily true range. So here it is in my view! This isn’t advice, just a guy who risks his own money in search of making a bit more then what has been risked. In other words I trade! And that’s the life of a trader. On my 1H chart I see the 21 SMA line ( in black ) bending upwards, and price has challenged the 89 SMA ( in red ) but pulled back. Here is where most would use the low as a stop setting point if the entry was to go long, but that’s not in my plan. I use the law of extra large candles. What that is I look for a longer candle ( up or down, green or red ) the kind of candle I believe is where a larger amount of money has been placed compared to the previous 5-10 or 20 candles. I quickly place a retracemen study on that candles body or even the next few candles after that one—-what I’m looking for is a good pullback, a tradable one that also has good support or resistances to then trade with a measured but well defined risk zone. One where the stop is but a small part of the daily true range. So on my chart post you can see I really like the red box as my buy zone, under the red box as my stop area. But looking for a break out over the top pink line. A line that shows me where previous price action has on the way down had slowed with momentum and has capped upward movements, indicating a defensive line where the bears have stepped in pushing price back down. That’s the battle ground! Breakout above that pink line and some bears will cover and take profits if they have them. Thus pushing price farther and still higher. The large somewhat oversized candle shows a shift in the short term momentum and direction but better still it shows where the money entered into the price action and so in my opinion a tradable zone to then target a set up. All of this is just one tool in the traders tool box and just an example of a current real life in the market trading ideas and how one trader looks at a strategy of trading this market. As always a trading plan need statistical evidence of past price action to then develop a statistical but personal edge in trading. And this only helps develop an emotional control to what could go wrong. Because in trading risk is the only controllable thing we as traders we can control along with emotional or none emotional decisions we make. In trading you either make dust or you will eat dust! All the best in your trading. If you decide to trade any ideas always remember that the risk is all yours. Just because I trade a setup or as I have posted doesn’t mean that’s right for you to do the same.
Long
by PipsTradingClub
4