Wednesday, April 25, 2012

EOD Analysis For 25th April 2012 and Outlook For 26th April 2012

OI in Nifty futures in the morning session dropped to 26 million [but came to 31 million just a few minutes before Europe opening] VIX is surprisingly cool as of now and IMHO its an aberration to take out options premiums

Critical levels and outlook remain unchanged from previous posts for both Nifty and BankNifty
5032-5092 most critical support band for Nifty
10150  [give or take a few points here or there] most critical support for BankNifty
Please note that these values are of importance on EOD basis [intra-day levels may go lower as it happened with BNF today]

Now on Nifty, some positive divergence was seen on LnT but not confirmed by Tata Steel, RIL, BankNifty etc and with expiry tomorrow the odds are split wide open

From an investment perspective, all steep cuts are buying opportunities with a 2-3 year horizon; for trading, as Raghuji also keeps mentioning, it pays to be nimble footed and take each day as it comes. Adhere to stop losses when hit and keep trailing winning positions and lock in the gains :D

Let us review the high-probability trading opportunities I had given  3 sessions ago

For each one, it could go either ways breakout or a breakdown - direction was uncertain when posted

JP Associates
Before I put the next 2 illustrations i.e. IDFC and Larsen, let me make the point very clear that none of the blog contributors Raghuji, SMO or myself want to demonstrate any form of attitude. If there is anything, we have attitude of gratitude towards our mentors who walked us through a grilling process forever emphasizing Effort + Discipline = Success; We are only working on the 2 left hand variables and sometimes we win and sometimes we lose. When we find ourselves on the losing side, we get out quickly [this took some practice as markets tend to take some tuition fees and then it was upto us how we use the lessons :D]


Correction to the Lot-Size of IDFC: Lot size is 2000 and not 1000 as put in the image

This one stumped me on the time aspect though [was expecting this a week further] the potential break-out or break-down was evident when flagged

Moral of The Story: If you have trading capital for stock futures, the best way to deploy it is to patiently wait like a hunter and when the opportunity does crop up, go full throttle with a moderate stop loss and enjoy the gains; minimal brokerage, maximum ROI within a short time frame and no emotional atyaachaar for our tiny brains :D

As mentioned when I had first put this up, I seldom put stocks on my blog and stick to Nifty and BankNifty on the blog with broader support and resistance levels. Finer trading aspects are covered by Raghuji and SMO; I put up this post today just to follow through on my previous illustration

Credit for spotting these opportunities goes to EW and basic TA only that always keep emphasizing the importance of Triangles and Diagonals; as price bars near the end point of the Triangle / Diagonal [also called pennets or flags] be alert because some swift moves can be anticipated in either direction.

Enjoy the hunt for flags and pennets. They seldom come up on daily charts [normally once a quarter] but when they do, the odds of hitting those for sixes are extremely high - HHHHHH

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