Thursday, 27 April 2017

Nifty Future 27042017

It opened within yesterday's range and remained rangebound.  In afternoon it seemed like it was going to break PDH.  Attempted that trade as marked but unfortunately it did not work.  No other trades.

Wednesday, 26 April 2017

Nifty Future 26042017

It opened at PDH/BRN and started moving up without giving us a setup to go long.  After that it started consolidating and gave BOF of Range Low. It moved nicely to Range High.  Toward the fag end, it made an attempt to break PDH/BRN and failed.  Hesitated and missed the up move.

Tuesday, 25 April 2017

Nifty Future 25042017

It opened above PDH and after remaining rangebound it broke out and presented a nice BPB setup.  It moved some.  In the afternoon DO/range high acted as a flip and gave another setup to go long.  It just missed the BRN target.

Friday, 21 April 2017

Nifty Future 21042017

It opened full gap up but there was no follow through.  This was the first sign of weakness.  After that traded in a very narrow range below PDH for a long time. Second sign of weakness.  Made an attempt to reverse but failed.  Another sign of weakness. Then broke out below the range which confirmed the weakness and presented a BPB setup.  The trade moved very well. Towards the fag end it made multiple attempts to break BRN but failed.  Did not expect a V shape reversal at that time and hence avoided BOF of BRN.

Thursday, 20 April 2017

Nifty Future 20042017

It opened within previous day's range.  Attempted a BPB of PDH which did not work.  After that it formed a range envelope without giving any further setup to trade.

Wednesday, 19 April 2017

Nifty Future 19042017

After a big move yesterday, it was expected to remain range bound and it did exactly same.  The BO came very late and could not be traded.

Thursday, 13 April 2017

Wednesday, 12 April 2017

Nifty Future 12042017

There was no way to catch the rapid fall in morning.  After that it consolidated for some time.  Now here it presented a very good pressure play setup.  There was no hesitation at all to trade this powerful reversal pattern.  It moved as expected very well.

Monday, 10 April 2017

Nifty Future 10042017

It opened within previous day's range and formed a range high.  Taking the direct BO at range high was not a good setup so avoided it.  When this BO failed, attempted a short trade which reached the target of 9200.  

Friday, 7 April 2017

Nifty Future 07042017

Today again the gap down open was very tempting to go for the blind long trade.  After that prices remained range bound  There was a direct BO long entry possible above range high (blue line).  However, it was a mediocre kind of setup, hence avoided.  After filling the gap, it refused to move higher.  If buyers had enough strength, after filling the gap, we can expect prices to continue to move higher. Failure of this presented a nice BOF short trade as marked which moved exceedingly well.

Thursday, 6 April 2017

Nifty Future 06042017

The markets are so much bullish nowadays, trading at all time highs,  You might have noticed that since March 28th, every 30-40 points kind of dips or intraday pullbacks have been bought aggressively.  Now today, due to some overnight newsflow it opened gap down around 30 points just above PDL. It gave that opportunity to buy again today.  If we use our common sense in trading, it tells us to buy this 30 point dip.  Let me give you an example.  You want to buy an Iphone costing around 50K.  You have kept an eye on its price.  One fine day, they slash the price to lets say 40K. What would you do?  Wouldn't you just rush to the store to buy it? This is what professional traders do.

At the open, it is possible that the traders tried to buy this dip.  Some time later, it broke the initial low, failed, retested it and failed to move down.  This indicated lack of strength from the sellers.  Reading the price action like this would allow us to take a long as marked after the confirmation. It worked well. RBI announcement at 2:30 pm today was also another reason for the markets to not move in a direction before the event and remain range bound till that time.  If you expect it to remain in some sort of range, then why not buy around range low in an up trend.

After the announcement, there was no fireworks and it continued to remain range bound.

Wednesday, 5 April 2017

Nifty Future 05042017

I wanted to enter long on range lows but it did not give any setup for that.  It kept on moving in a channel formation throughout the day without giving a good setup to trade.

Monday, 3 April 2017

Nifty Future 03042017

It had a good possibility of today being a type 1 trend day in the morning.  It was further confirmed by reading the market breadth which is one of the market internals.  The difference between advancing and declining stocks was more than 600 in the first morning hour.  This indicated markets trading only in one direction throughout the day.  This is one of my recent observations.  Also stock trading in the morning gives the overall feel of markets and which side in control.

It opened above all time high level, pulled back a little, pullback found support at PDH and gap could only partially get filled.  This all indicated strength in the buyers.  Then it started creating a pressure at DO/HOD then, inviting us to go for a direct BO trade.  Once that got executed, it was just a game of waiting patiently till end of the day to book out close to highest point of the day.

Saturday, 1 April 2017

100% Working

I made a post in year 2013 soon after I started blogging.  Click here to read that post.  Unfortunately, this is the post which has been least appreciated by the readers.  I do not know the reason, but the fact is that the strategy has been working 100% since year 2003, since the start of derivatives trading in India. So if it has worked since its inception for last 13 years, cannot we expect it to work again and again?

Here is the monthly chart of Nifty demonstrating the same is working for last 4-5 years too.

You would notice that whenever the monthly Nifty candle is able to close above the January month high, the rest of the year it remains up or continues to go up.  In year 2013, it first made a false break of January month high, could not close above it but when it closed above it in October, rest of the year it remained higher. In year 2014 after giving a close above Jan month high in March 2014, it never tested that level. In year 2015, it could not give a close above Jan month high, so for rest of the year it remained lower. In year 2016, it was able to successfully close above Jan month high in May 2016 and after that went up significantly.  Now in year 2017, it has been able to close above Jan month high in February 2017, so for rest of the year we can expect Nifty to remain bullish and gain significantly.

How to benefit from this strategy?
It is simple. Whenever Nifty gives a monthly close above the January month high, we can get rest assured that for rest of year, it will go only in one direction and that is up.  We can buy good quality equity mutual funds at that time and hold on to them till November or December of that year at least and make good gains.  We can also buy the index ETFs like Nifty Bees. These are one of the safest ways to generate 10 to 12% kind of returns in very short time period. Last year someone could have bought Niftybees at end of May month around 820 and sold it around 910 in September.  In just 4 months it generated more than 10% of returns. This year, I would say still it is not late.  It is only couple of hundred points above the level of entry.  If someone has funds lying in banks generating 6-7%, he or she can deploy these funds in Niftybees or a good equity mutual fund and expect around 10-12 of gains or more.  If someone wants to wait for the correction, then let it pull back to around 8700 level or below 9000.

Peter Brandt, a legendary traders has set the targets like 10287 or 12000 for the Nifty.

Finally, this is also another way to generate some steady flow of income from the markets with almost negligible or least minimum risk. Buy when Nifty's monthly close is higher than January month high and exit with good gains in the same year.