Trading Yoga

Candle Stick Analysis Daily 28th & 29th Sept The daily candles for the last two days shows that the current round of sell off has bottomed out and found support at 9700 levels.  The expiry candle (on Thursday) formed a bullish spinning top (lower shadow of 48 points and a bullish real body of 33 points near the top with an upper shadow of 20 points) at the bottom of the sell off. This indicates that the selling pressure has eased and buying has emerged. However, this required a confirmation on the next day. Today, the market opened gap up and saw some selling pressure but managed to end at the high of yesterday. The candle was bearish as close was lower than open. Further the real body was at the lower range and another spinning top has formed.  The follow up confirmation day though closed above yesterday, and the psychological level of 9780 and above the 100 day SMA of 9778. Weekly Candle Analysis The weekly candle shows a retracement of 492 points from the lif

BIG PICTURE SEPT 27th Yesterday's session seemed like the bulls were getting ready to get back into the battle. The first few minutes seemed to confirm the intent of the bulls. But the bears quickly retaliated to push the Nifty into Red and post the news about the surgical attack in the Myanmar border, the bears tightened the grip pushing Nifty below key support levels (See Trend section below). All broad based indices closed in red with midcap and small caps losing significantly. All sectoral indices also closed in red with PSU banks, Realty and Pharma being top losers.  The advance decline ratio was 1:5.5 with negative bias. There were 18 52 week high and 58 52 week low reinforcing the grip of the bears. The range for the day was quite wide at 207 points with a high of 9721 and low of 9714.50 indicating high volatility in the trading session. (See candle analysis below). CANDLE STICK ANALYSIS It was strongly bearish candle with a very smaller upper shadow and lower

BIG PICTURE SEPT 26st The market remained below yesterday's close for most of the trading session, though initial few minutes and some pockets between 2 PM and 3 PM saw Nifty go green. Finally it closed very close to the open (and yesterday's close) ... which by itself is a minor victory for the Bulls. The bears pushed the Nifty to 9820 at around 11 AM and from then on, Nifty found buyers all the way till close of the session.  While Nifty closed neutral at 9871.50 (down by 1.10 points), all broad based indices fared better and closed in the green, with midcaps and small gaps gaining above 0.7%. Sectoral Indices was a mixed bag with Metals and Realty being top two gainers and FMCG and Media were top two losers. IT and PSU Banks closed marginally lower as well.  The advance decline ratio was far better with 1:0.6 ratio with positive bias. 17 securities gained 52 week high while 38 securities witnessed 52 week low in today's session indicating undertones of bearis

BIG PICTURE SEPT 25th Another morning attack by the bears and it seemed like bulls have fled the field.  Only post 2 PM the Nifty witnessed some buying (probably short covering by day and positional traders) which helped it to recover some ground before closing. Nifty opened slightly below the Friday close, and with another day of Open(9960.10) = High (9960.50), traders shorting the market sent it tumbling to a low of 9816.05 breaking multiple supports. The Nifty closed at 9872.60 down by 92 points from Friday's close. All broad based and sectoral Indices closed in red. Small caps lost 2.34% while among the sectors, Realty took a big beating for a second consecutive day. The advance decline ratio was slightly better than Friday 1:4.5 with negative bias. The day's trading saw 21 securities reach 52 week high while 62 securities tumbled to their 52 week low, clearly indicating the change in market sentiment. The Index is now trading below the short and medium term daily

BIG PICTURE Week and Day Ending Sept 22nd The Nifty had the biggest daily fall of 2017 on Friday. The market displayed symptoms of bi-polarity, as Monday was a day of Euphoria and Friday it was deep in the dumps. On Monday Nifty managed to open gap up and break the life time high to create a new High. It sent the technicians back to the drawing board to re-draw the trendline. Then there was a drag in the next 3 days of the week. The lack of follow up day, the three bearish candle that followed Monday did indicate the Bulls were involved in a close battle with Bears and not really in control at the top. And Friday the big whack and fall came. Friday's fall was much bigger than anticipated. It broke multiple support and closed at 9964.40. The fact that it followed a hammer pattern on the prior day added to the surprise element.  The bears started with a morning attack and it was relentless as if the Bulls had fled from the field. Nifty opened gap down by 27 points and man

BIG PICTURE SEPT 21st The Nifty lost another 19.25 points for the 3rd consecutive day after Nifty managed to break the All time High of 10137.85 mark.  All broad based indices closed in the red and sectoral indices also ended in the red except for Pharma which gained a whopping 3.33% in the trading session. IT marginally gained 0.02 to give company to Pharma.  Top 2 losers were Media and Realty. The advance decline ratio was 1:2 negative bias. 56 securities reached 52 week high while 15 securities reached 52 week low in the day's session. The trading range for the day was very broad more than 100 points in contrast to the last two days of narrow range trading sessions. CANDLE STICK ANALYSIS A third consecutive day of lower close and bearish candle for the Nifty  Volumes were average. The market opened bullish above yesterday's close and reached the high of the day. The selling started within the first hour relentlessly to take the market more than 100 points lo

Big Picture Sept 20th  Nifty lost another 6.4 points in a flat trading session to close at 10141.15. All broad based indices closed red today. PSU Bank, Pharma and FMCG gained while all other sectors closed lower today. Advance decline ratio was close to 1 with negative bias. Only 88 securities reached 52 week high today versus 10 securities reached 52 week low.  The series of red candles after a gap up bullish candle achieving Lifetime high on Monday, is like a high rope walk by the bulls. The trading range has been narrow and the lower close seems like the rope is flexible yet giving good support to the weight of the bulls. And this formation at the top of the chart ... like a sling rope walk into nothingness and bulls praying for the staircase of bullish candles to appear.  Candle Stick Analysis Nifty closed ~27 points lower than the opening forming a bearish candle  The candle barely had small lower and upper shadow. The candle revealed the bearish grip on the tr

Big Picture Sept 19th The market opened near the top at 10175.6 indicating the Bull's sentiment to carry on from where they left yesterday.  The high of the day was again an all time high by a few more points. The bears had other plans though, and the Nifty touched a low of 10130 finally closing 10147 losing 5.55 points in the days trading. All broad based indices except Nifty closed in green and sector indices indicated a mixed picture. About 5 of the indices closed in red with Metals and PSU Banks vying with each other for the top loser spot. Realty meanwhile was the top gainer. The advances and declines were 1:1 indicating a neutral day while 114 scrips reached 52 week high and 11 securities reached 52 week low. Technical Story One look at the today's candle, it looks like a mirror image of yesterday's candle. An island of two candles at the top, the candle today an inverse of yesterday's candle. Yesterday was a celebratory candle, Bullish (Green ca

Market Sept 18th Well, literally a flying start to the week. Nifty opened gap up, above the high of the previous week and never looked down.  The expected selling did happen in the second half but the sentiment could not be changed.  All broad based indices closed in green and all sectoral indices closed in green except for PSU Banks which lost 0.23% with SBI losing  0.55%. Advance decline ratio was positive and 125 stocks reached their 52w high and 21 stocks reached 52 w low in the day's trading. Daily Candle : Nifty opened at 10133.10, and reached a life time high of 10171.70 made a low of 10131.10 and closed above 10150 at 10153.10. This resulted in a bullish candle gap up (above all the 5 candles of last week). The bears were taken by complete surprise with this jump and sprint by the bulls to stay out of the resistance zone of 10130-10140. The bulls cleverly kept the day's range restricted to 40 points. This meant that it did not attract much profit

Market Sept 14th Another great arm wrestling match today. Till 11 the Bulls made merry. Past 11 to past 2 pm a big tussle ensued between supply and demand pushing the index below yesterday's close and finally the Bulls won the round managing to close 7.3 points above yesterday at 10086.60. See the details in the graph below. The market breadth for Nifty was negative with 28 declines versus 23 advances. All broadbased indices closed in the green today. Among the sectoral indices, Pharma gained a massive 2.63% today outperforming every sector by a huge margin, while Metals and Realty were top losers.  The advance decline ratio was almost 1:1 indicating a more neutral market breadth compared to Nifty. 53 securities reached 52 week high today including the likes of HDFC Bank, Hindustan Lever etc. 15 scrips reached 52 week lows.  Candle Stick Analysis The Candle stick formation today was a bearish candle though the index close above yesterday's close but

Market Sept 13th In my blog on Sunday, I had written that swift movement of the Index needs to be viewed with caution . Nifty had two bullish sessions on Monday and Tuesday, and a very good session during most of the day today. But as I said, haste makes waste. All the euphoria came to naught as the momentum was not strong enough for Nifty to reach the peak let alone break out into a new all time high. A brief look at the story the data provides. The Nifty range was 10063.15 to 10131.95 and the huge selling pressure at higher levels brought the Index down below the opening level of 10099. This has created a bearish candle (as the close was lower than the open). The body of the candle is near the low indicating that the bears won the day in a very convincing manner.  The Bears managed to drag the bulls from touching distance of the peak of 10137.85  to a place lower than where they started the day. The narrow range of the candle body, the bearish formation, the location of the

Market Sept 12th Today was a strong follow up day for the Nifty.  A follow up day is a bullish day followed by yet another bullish day indicating strength behind the rally. Now let us look at some key statistics to understand how strong or weak the follow up day was.   Market opened gap up at 10056 a good 28 points above the high of yesterday. The day's high was 10097.55 while the day's close was 10093.05. Today's low of 10028.05 compared to yesterday's high of 10028.65 The market overcame the resistance at 10060 The day's candle broke the Bollinger Upper Band decisively after tentatively tagging the upper band yesterday. Turnover was 300 crores higher than yesterday and 1000 crores more than Friday. Turnover was 474 crores higher than simple 10 day Moving average of Turnover Considering the volume, the price and the shape of the candle, one can say the Bulls have done their bit today to assert their presence. The Nifty is now within

Market Sept 11th  The market started off on a bouyant note despite uneasiness on the geo-political front not fading away, and the GST news about input credits. The Nifty made a confident start with a gap up and continued the upmove till about 2:50 PM. The last 40 minutes of trading saw the Bears trying to push the index close below 10K levels, and Bulls managed to close at 10006.05 a good 71 points above Fridy's close. The range for the day was 9968 to 10028.65 about 60 points of which the bears managed to wrest 22 points from the day's high. The market breadth was positive with all broad based indices participating in the rally and closing the day green. All sectors too participated except for Pharma and PSU banks, both Pharma losing 0.41% while PSU ending the day marginally in the red. The advance decline ratio was positive with advances to decline ratio close to 1.2 to 1. About 97 scrips achieved new 52 week high while 26 scrips touched new 52 week low mark in the day&#

Market Sept 8th and Week ended Sept 8 Today's blog will look at pure price action, with out any indicators or oscillators. I hope at the end of the blog we will realise how much the price action reveals the market sentiment. The stories it tells, the patterns it creates to give a clue to what next. That is the big question, is it not ... what next ?  Commentary on Friday's price action On Friday the market opened near the high and closed somewhere in the mid-range for the day.  The market opened positively only to be dragged down by the selling pressure till 2:30 in the afternoon. Seeing a bargain at 9913 levels, buyers rushed in and the Nifty recovered to 9940 and finally close at 9934.80 - with a gain of about 5 points above Thursday's close. Now a look at the story the daily candle narrates. The very small upper wick (or shadow) barely seen, indicates the inability of the bulls to take the price much higher than the open. The long lower wick (or sha

Market Sept 7th Nifty moved in a narrow range losing initial gains in the morning session. The broadbased indices were all green and the sectoral indices were also positive with Metals and Auto sectors being top two gainers while FMCG was the loser. Media ended in red with a minor fall. The market width was slightly positive with Advances slightly out numbering declines. Technically the Nifty ended above all key EMAs indicating bullish bias. The India Vix also indicated bullish activity in the options market. The Daily Chart of Nifty with Bollinger band indicates that the market is likely to trade flat as the Bollinger band has started narrowing in the last three days. The Nifty range for Sept 8th is 9911 to  9961 with support at 9891 and resistance at 9990. The Bank Nifty range for Sept 8th is 24189 to 24440 with support at 24079 and resistance at 24550 Stay Connected : If you wish to participate in a discussion on this blog, please join the Facebook Group If y