TOO MANY BULLS KILLED THE RALLY..

Hi Friends

After giving a 1000 points rally this sudden 350 points drop on Nifty may not be a shocker. But its just that Too many Bulls killed the Rally. And those who were feeling left out and entered late in this Rally above 5250-5300 are the ones now selling below 5300 and adding some short pressure.. :)

But the Question here is Whether that Rally was a New Bull or just a Relief Rally or This Correction  a Normal 1. The simple answer to this comes from the below quote-

"The Market can remain irrational longer than you can remain solvent."

NIFTY

Well after 1000 point rally a 350 point correction is normal. But the way it has come in is surely not normal. Though this internal structure looks to be 3 waves this doesn't look like a corrective wave but an Impulse. Which is the main reason to doubt this Rally to be Bull Run.

Considering 4530 as Bottom since wave 2 at 4588 was Sharpe this wave 4 shall come as shallow correction and shall be a combination or complex correction and consume 1-2 weeks as I mentioned earlier.

But such a shape fall doesn't look like normal correction in Elliot Terms. But its still too early to arrive at 1 definite conclusion.

So its still early to say that Nifty bottomed at 4530. But its now bit early to say that it will form New Low.

As of now 5215 shall act as a strong Support and Nifty may start inching upward again.

Well but if 5175 is taken out in this fall then it will be an Initial confirmation for 4760 or worst case 4250. But more confirmation will come after the next rally.

So let Nifty 1st take pause and start inching back upwards and then we shall make any conclusion.

So though currently I've marked 4530 as Bottom I will again like to go with my earlier count of Flat Corrective wherein Nifty can head back to 4760 in case of Running Flat or 4225 in case of Expanded Flat.

NIFTY EXPANDED FLAT

So I might again go back to my chart with old labels indicating 4530 as A and now 5630 as B of Flat and then Final C to head to 4760 or 4225.. If and Only If Nifty breaks below 5175. Till then I'm neutral on Market. Not a Mega Bull like others but not yet the Mega Bear like I was earlier.

Well I know some people may criticize me for my Bearish view but I cannot completely deny such Bearish possibilities yet.

I know where I was wrong in the past. At 5060 and 5285 I made mistake of predicting the End of Wave Extension before confirmation. And some people criticized me for my Bearish views. Well I know I was wrong at that time and I accepted it and moved with the Market. But those who criticized me for my bearish view also Forgot that I was the one to call for 500 point Rally at 4550.

I know I lost some 150-200 points on Nifty because of My Bearish views. So currently I'm not aiming for big targets. And slowly trying to trade with small target of 200-300 points.. So I'm happy to see my both targets of 5340 and 5280 achieved in just 1 day. And now waiting for last target of 5220.

So here 1 would square off all the shorts near 5215.. And wait for long confirmation if any.

Happy Minting..

Thanks & Regards,

Harsh Dixit.

5630.. IS IT AN UGLY TOP OF THIS RALLY?

Hi Friends,


After rallying crazily since Jan Nifty has now taken a pause where it exactly should... Today Nifty completed 61.8% Retracement of its entire fall from 6338 to 4531.. 


Well but is it an Ugly Top for this Rally?

Well according to my preferred Wave Count today's high seems to be the end of much extended wave 3..
And now we shall see some correction in wave 4 down to 5340 or max 5280..


Well but as experts say don't try to predict end of wave extension I just exited the longs.. Till the time this rising channel is not broken Nifty will keep rising.. So Shorts are not yet invited until 5434 is broken.. 

NIFTY

1st confirmation of the end of wave extension will come below this rising channel. (i.e below 5505). But there is immediate support at 5475.. And next strong support is placed at 5434. 5434 is the Key for Bulls..


Shorts to be taken only below this support of 5434.. So below 5434 we shall see correction till 5340 or 5280 or max till 5215.. Wave 4 will be triangular activity and shall consume 1-2 weeks max.. Post which we shall see Rally to 5922-5947 or much higher to 6180.


Currently I'm following Prechter's Techniques. And considering this Rally to be an Impulsive Bull.


But Some people follow Neely..


So As per NEO WAVE.. Today's High Could Turn out to be an Ugly Top.


I have applied NEO WAVE ON SENSEX..

SENSEX

So as per NEO this Rally looks to be a corrective double zigzag.. Which also might turn out to be a Triple and move higher but a rare combination.



NEO Wave considers channeled moves as Complex Correctives involving “x” waves. As marked, Sensex today seem to have completed “c” of the 2^nd Zigzag corrective or "a" leg on one larger degree of the Larger D. Initial sign of weakness would be provided by weakness and close below the channel (b-x line) drawn over last five weeks’ move.



While a decisive break below the channel (b-x line) could begin a corrective phase inside the D leg, i.e. “b” of D. This corrective 'b' could be a sharp correction till 16800.

DIAMETRIC

Considering the possibility of Bow Tie shaped Diametric SENSEX will hit New low after rallying to 20K

Currently strategy should be sell below 5434 with sl of 5505 for target of 5340-5280. And that dip to 5280 could turn out as buy with sl of 5215.






HAPPY MINTING..


THANKS & REGARDS,


HARSH DIXIT

DOJI CLOSE ON WEEKLY CHART. SOMETHING SOUNDS FISHY FISHY..

Hi Friends,

NIFTY DOJI

NIFTY has been moving constantly higher in a rising channel and the trend still looks to be strongly Bullish.. But now as we have a good rally of 800-900 points a short term correction of 200 points is a good healthy correction for further up-move. While RSI showing Negative Divergence, a DOJI close on weekly chart is the first sign of the rally losing momentum. Further while NIFTY has crossed its OCT High of 5399 but SENSEX has not yet crossed its OCT High of 17908.

SENSEX

So this range of 5322-5427 is non trending range and no new positions are advisable to be taken within this range..


Some reasons why this rally to take a pause and expect a correction :-
1) DOJI Close on Weekly Chart
2) RSI Showing Negative Divergence
3) NIFTY retraced almost 50% of its fall from 6338-4531. (Retracement @5435) 
4) Wave 3 looks complete here.


So at this current juncture I have two alternatives in my Mind :-

BULLISH ALTERNATIVE

1) BULLISH ALTERNATIVE -  Considering the Complex Corrective got over at 4531. I have labeled this rally as an Impulse where wave 3 looks to be complete at 5427. So a correction in wave 4  is expected till 5210 where there is strong support. After retracing in wave 4 down Nifty will resume its Up Trend and head to 5650-5700 to finish 5 wave Impulse thereby completing wave 1 on larger degree.

BEARISH ALTERNATIVE

2) BEARISH ALTERNATIVE - Considering this rally as an Expanded Flat Corrective I have labeled 4531 as Wave A & 5427 as Wave B. Now the sharp down move in wave C shall take NIFTY to 4250 or lower.. So while this down move starts a first leg will be a 400-500 point drop to 4940-5040 beginning from next week.


Currently I'm placing equal probability for Bullish & Bearish Alternatives. So I will simply wait and watch how the Market is moving in next couple of weeks..


Considering this Rally as Bullish shorts to be taken only below Weekly low of 5322 with the stop loss of 5380 for a target of 5210.. If NIFTY holds 5200 a fresh buy can be initiated depending on the structure of this correction.. So A fresh buy will be given only if 5200 is held.. Or in case this rally continues to go above weekly high of 5427. 


Below 5200 it can head to 5140 or till 5080 considering this Rally to be Bullish.. 


Holding on to 5200 will show the strength of Bulls.. 


But if NIFTY breaks below 5080 I will consider the Bearish alternative and then aim for 4250 or lower.


So lets wait and watch for the next couple of weeks..




HAPPY MINTING..


THANKS & REGARDS,


HARSH DIXIT.

BEARS GOT FRIED ON FRIDAY.. SO DO I..

NIFTY

SENSEX

Hi Friends,

Finally SENSEX has broken out of the year long Channel. Now I would like to revise my Bearish stance on Market and look for Bullish alternatives if any..

Well but as this rally is overstretched I would not jump into buy now.  The RSI on most of Indices & Stocks showing negative divergence. So there has to be some sort of correction.

Well this doesn't mean one should take a shot call. All the early shorts(Bears) got fried on every Friday since last month. I always wait for confirmation. Though I have initiated short at 5285 would book loss and move with the Market.

At 5060 I called for early short and got stop out at 5130. And now at 5285 again called for short & will get stop out tomorrow with gap up opening expected.

But after gaining 500-600 points on each swing in NIFTY since last 6 months a 150-200 points loss is a healthy correction. :) 

Its a give and take Business. I gave these 200 points to Market & Gained a Valuable Lesson. That an Early Trade without Confirmation would only lead to losses.

So till the time NIFTY doesn't break below the Upward Rising Channel I would not Initiate any short position.

Well since the year long Channel has been now broken upwards I may look for Bullish alternatives. But I'm in no hurry to buy.. 

As I'm an Elliot follower would simply look at the structure of the fall (i.e. whether a Corrective or an Impulsive) and decide whether to buy on dips.

Till then Stay with the Trend and be Disciplined..

Happy Minting..

Thanks & Regards,

Harsh Dixit.

40 TRADING RULES WHICH ONE MUST FOLLOW

HI FRIENDS,


THIS IS THE CORE BASICS OF TRADING:-


1  TRADING IS SIMPLE BUT NOT EASY
2  WHEN YOU GET INTO TRADE WATCH FOR SIGNS YOU MIGHT BE WRONG
3  TRADING SHOULD NOT BE BORING
4  AMATEUR TRADERS TURN PROFESSIONAL WHEN THEY STOP LOOKING FOR NEXT INDICATOR
5  YOU ARE TRADING OTHER TRADERS NOT STOCKS OR FUTURES
6  BE VERY AWARE OF YOUR EMOTIONS
7  WATCH YOURSELF WHEN YOU ARE TOO MUCH EXCITED
8  DON'T OVER TRADE
9  IF YOU ARE COMING TO TRADING WITH IDEA OF MAKING BIG MONEY YOU ARE DOOMED
10  DON'T FOCUS ON MONEY
11  DO NOT IMPOSE YOUR WILL ON MARKET
12  BEST WAY TO MINIMIZE RISK IS NOT TO TRADE WHEN IT IS NOT TIME TO TRADE
13  THERE IS NO COMPULSION TO TRADE 5 DAYS A WEEK
14  REFUSE TO DAMAGE YOUR CAPITAL
15  STAY RELAXED ALWAYS WHILE TRADING
16  NEVER TURN YOUR DAY TRADE TO OVERNIGHT TRADE UNLESS THERE ARE TOO MUCH SIGNALS
17  KEEP WINNERS AS THEY ARE MOVING YOUR WAY
18  NEVER OVERWEIGHT YOUR TRADE
19  THERE IS NO LOGICAL REASON TO HESITATE IN TAKING STOP LOSS
20  PROFESSIONAL TRADERS ALWAYS TAKE LOSSES AS THEY TRUST THEMSELVES TO DO RIGHT
21  ONCE YOU TAKE A LOSS FORGET IT AND MOVE ON
22  FIND OUT WHAT LOSS PARAMETERS WORK BEST FOR YOU AND ADJUST ACCORDINGLY
23  GET A FEEL FOR MARKET DIRECTION BY DRILLING DOWN LOOKING AT MULTIPLE TIME FRAMES
24  DEVELOP CONFIDENCE BY DOING YOUR TRADE SETUP SAME WAY EVERY TIME
25  DON'T BE STUPID BY ADDING TO LOSERS
26  TRY TO TAKE POSITIONS IN PART IF NOT SURE ABOUT TRADE
27  RING THE REGISTER AND SCALE OUT A POSITION
28  NEVER LET YOUR EGO COME IN YOUR TRADE
29  WHEN EVERYONE IS RUNNING FOR STOCK ALWAYS TAKE PROFIT IN IT
30  EMBRACING YOUR OPINION LEADS TO FINANCIAL RUN
31  ALWAYS BE A DISCIPLINE TRADER AND NEVER TRY TO WIPE OUT YOUR TRADING ACCOUNT
32  SIPHON OUT YOUR PROFITS EVERY MONTH AND PUT THEM IN SEPARATE ACCOUNT
33  ALWAYS RISK SMALL MONEY IN YOUR PARTICULAR TRADE BY CALCULATING RISK
34  ALWAYS PROTECT YOUR CAPITAL AND STICK TO RISK REWARD RATIO
35  IN FINANCIAL MARKETS HERO'S OFTEN GET CRUSHED TO KEEP IT MIND ALWAYS
36  STICK TO YOUR TRADE RULES AND YOU WILL NEVER BLOW UP YOUR ACCOUNT
37  MARKET CAN RE ENFORCE BAD HABIT AVOID IT
38  TAKE PERSONAL RESPONSIBILITY FOR EACH TRADE
39  NEVER THINK HOW MUCH MONEY U CAN MAKE FROM TRADE FIRST THINK HOW MUCH RISK
40  WHEN YOU ARE NOT SURE ABOUT NEXT STEP OF MARKET NEVER TRADE






HAPPY MINTING..


THANKS & REGARDS,


HARSH DIXIT.

NIFTY TOUCHED 5240 IS IT A BULL TRAP?

SENSEX

NIFTY

Hi Friends,

As expected NIFTY almost achieved 5250. But is this a Real Bull Rally or just a Trap for Bulls?

Well as I mentioned in my earlier post any Rally above 5100 seems more like a trap for Bulls. And as I mentioned all the Bears who are in hurry to short will be Fried. :)

The psychological Mark of 5200 is now taken out and year long channel has been broken on upside thereby creating an euphoria. But we have witnessed similar action in April at 5944 where 5900 was psychological mark and in July at 5740 again breakout from channel and psychological barrier of 5700. But we know what happened after such move.

Thought the year long channel has been broken on Nifty; we can clearly see that it is still not broken on the SENSEX. So this move seems more to be a Bull Trap than Real Rally.

Wave Count wise 5 wave advance looks to be complete at today's high or it may get extended to 5285 max. where B leg would be complete. And then the massive wave of short selling in Wave C cold take Nifty to 4250.. For the time being lets keep short term target of 4980.

 RSI is now showing negative divergence but the trend will turned Bearish below this upward rising channel. Expecting a two day tennis match between Bulls and Bears. Simply meaning distributions before the big reversal which could take place on Monday 6th Feb or latest by Tuesday.

This view will get negated above 5350 where I will end Bear Market and accept that Bull is King..

Happy Minting..

Thanks & Regards,

Harsh Dixit.