Sunday, April 28, 2013
The market will looking sluggish this week the resistance of 19712 will be a major resistance for this week the market is expected to have 18624 as a support at lower side. we are seeing a negative divergence in in Sensex, this may drive to 18624.
Am I bullish on Sensex?
No, I expect a consolidation. We are seeing a risk building out in Sensex, as per me this week is the week for profits booking. Most of the short term players may book profit this week.
How much consolidation is good for Sensex?
18510-18000 need to be the support below which market is not healthy to grab. If market manages to consolidate below 18000 levels we may see a free fall upto 17500/16900.
Wednesday, April 24, 2013
The name may be fascinating, interesting, curious sometimes weird. The main myth with this pattern has stimulated my need towards understanding pattern at a higher level. When we go into, what is it all about? How this pattern emerged? We come to know there are 2 major parts in Sleeping Triangle. One is body and other is the sleeping body of the triangle. I call it as real body and sleeping body.
As per my observation the real body will be lengthiest price action before breakout. The real body get into new resistance. It will touch the higher price, the price action of the real body will be very high and sometimes it take a short time duration (it may be formed within couple of days). As the price action with real body is very high. We normally tend to see RSI and other Oscillators going to a overbought zone.
The sleeping body is the essential part which differs from a regular triangle. The price action will never tend touch the support (it will touch only once before giving a breakout) instead try to be at a higher level but the sentiments of the market drag the price action lower such that it from a channel. The volume will be much lower compared to real body.
The price action of the sleeping body can be seen sticking to the upper level. And show the sentiments to be bullish.
Sometimes we may see the price giving premature breakouts which will say the future breakout (intension of bullish/bearish breakout) and price action.
The breakout will be formed when the price hit the support and when the support is good the price rebound which cause a breakout.
Strategy: Trading using Sleeping Triangle
When we see a bullish breakout it is the only level where we can buy. As the price level is low it is the best opportunity to buy at a breakout and sell at a higher high. The triangles need to be traded opposite of a triangle. In the figure above, we can see a triangle which resembles as a descending triangle. In a descending triangle we normally place a stop loss above the trend line but here in this sleeping we need to place a stop opposite to the descending triangle
Types of Sleeping Triangle
These triangle are of 2 types namely an
· Ascending Sleeping Triangle(Bearish)
· Descending Sleeping Triangle(Bullish)
An example of descending triangle forming in Tata Coffee
For More details
Tuesday, April 23, 2013
After one cycle swing seen in reliance I am looking a reversal. The stock has a powerful resistance at 850. If it able to cross then we can see the stock going up to 920.
Indicators: we are seeing a bullish divergence which is been building from long days. We see this divergence in MACD. We have even seen a good crossover as most of the stock has been in a bearish mode. It is been a hotspot for many of the investors.
Fib Levels: As I had told above this stock may find resistance at 50%. If it manages to cross that level, it will reach to 920. Which will lead to 920 levels; the stock is looks potential and we may even see the stock moving more than 940 as the divergence is strong.
Moving Average: I have been looking for a long time. The stock is more sentimental towards 20 DMA. After confirmation of a breakout in 20 DMA this stock is found to be bullish.
Friday, April 19, 2013
Sunday, April 14, 2013
We have seen market consolidating, these days. The cocktail of negative news have driven market near to 18000 levels. Before it reach 18000 we are seeing falling wedge pattern forming.
A Falling Wedge
A Divergence Building up
Simultaneously, we are seeing a Bullish Divergence forming in market. As we are seeing a gap filling have started up in Sensex. We may see a reversal @18000 level after filling up of gap; which will eventually lead to a bullish breakout in Falling wedge.