Year: 2010

Here is an updated chart I had posted last weekend calling for a sideways move in the market this week.You can find my last post here

The changes in the chart are in the heat map on the left which gives you the volume profile for the entire bracket of 5730-6092 and the new heat map on the right which is this week’s volume profile.

As you can see from the red in the charts, there is a clear accumulation of volume at 6000 levels which would give rise to the possibility of a directional move coming from these levels.

Besides, the market put in a non-trend day today, which in itself will call for a large move to follow either immediately or the day following.

I was chuckling away when some TV presenters were attributing holidays, year end etc etc to describe today’s action, but every profiler would be rubbing his hands in glee at the prospect of an eventful day coming up.

5930 or 6067 have a 50 % probability each from current levels and one of them would be definitely visited.The 6000 straddle will be a good bet with a 20 % stop loss in the front month options.The gains in one will exceed the 20 % loss in the other.

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Sideways – 2

There is a reason why we all at Vtrender love to trade the Bank Nifty.

I used to be a Nifty trader till Vtrender happened at the start of this year and Shai’s love for the Bank Nifty rubbed off on me so much that I trade the Bank Nifty today more than the Nifty.

Besides that it is so easy to work with the Bank Nifty if you are a profiler.

Consider today’s high of 11680 which was the zone where the Bank Nifty had sold off earlier as also the weekly VAH to the point. Or the lows near 11440 which are Oct 26th lows pre bank Scams which were used to buy the market this afternoon.

If you study Profile and trade the Bank Nifty, you would get 8 moves out of 10 right each for 50-90 points without a directional bias in the market.

If you want to know how to do it, hold that thought, we will have a webinar early next month on the subject.

Let’s look at the charts :

The market undid the good work of yesterday and for tomorrow 11520 will be the key.

Earlier this morning if you were on the chat box, you would have taken cues to book out longs partially- a signal which we gave live here at 9.36 this morning 20 mins after the market open with the Nifty then at 6040 and the Bank Nifty at 11680 !

Longs from 58XX levels are still safe as long as the Nifty trades above 5944 and the Bank nifty above 11320.As Shai had called over the weekend, we are in a sideways zone, and profits have to be booked before they get eaten up by the market.

This is also my last post this year as I head off for some R & R.

See you next year. Happy Holidays !

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BN and Market Profile

The open of the morning was a test drive to check out the previous day’s POC, to see if their was any unfinished agenda there.

Price was quick to reject the lower value and orderflow confirmed a long at 9.45 which was valid right upto day highs !

As expected in the later part of the day and posted in my view on thursday, the rotation between 5955-5990 happened in the later part of the day. My last post on the subject of rotation is here

The Nifty future has to defend 5944 tomorrow for an upmove above 5990 to materialize. The target in that case would be 6070.

The bank Nifty was resisted at 11440, which was pointed out by Girish in the trading room as support from 26/11.

After two unsuccessful attempts, the Bank Nifty took the path of least resistance which in it’s case was downward.

In the process the BN put in an inside day today, which will call for a large move either tomorrow or day after.

The orderflow of the Nifty future is here :

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Normal Variation

If you have been following profile charts, for the past few weeks you may have noticed that value has been going sideways for a few weeks now.

To illustrate the activity of the Nifty further, I picked up some bar charts and did some good old fashioned trendline analysis.

Have a look :

The chart is a 30 minute bar chart of the Nifty future for the past 30 days.

6097 and 5730 represent the extreme ends of the bracket we currently find ourselves in. Within this channel I have introduced two light blue horizontal lines ( on the right ) which define the path from the lows to a possible top of the bracket, the Nifty future took through the current week.

Also included are two heat maps based on volume profile.The larger heat map on the left is for the entire duration of the current bracket ( 6097-5730) and the one on the right is for the last 5 days of activity.

The black in the heat maps represent zones of low volume activity with the color gradient going to blue, green, yellow and red as the volume increases.This option helps us to get a visual display of high and low volume areas.

As you can see the extreme ends of the bracket ( black zone) have been quickly rejected and price hasn’t spent a lot of time there, whereas the middle ( red/ yellow) is where the market has auctioned most of the time neat the 5950 zone.

So whilst we are within the blue channel, we are looking for signs to see if there may emerge a breakout based on the last five days of activity.

Unfortunately we can see a replica of the past 30 days in the last 5 days of data.

The red and yellow in the past week are exactly where they were in the past one month.

So the inference is that the sideways range in the Nifty would continue.

This market is an option writer’s delight.

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Sideways

Two statements from last evenings post here

“5868-5863 holds the key in the Nifty tomorrow.”

“The Nifty chart showed the presence of a buyer at 5925 levels”

The Nifty moved sideways till the afternoon and once the RBI news got digested the low at 5863 was bought and the Nifty finished a 100 points higher from there.

We have a full session of trading in international markets, before we resume again on Monday and lots can change from a sentiment point of view between now and then, but the damaging part of the afternoon move was that value was not created higher and the point of control stayed in it’s place.

At the worst the bulls can hope for a rotation in the 5990-5955 low vol zone before a move higher, buy 5955-5945 will have to be defended.

The bank Nifty chart showed a buyer at 11180 early in the morning, and the fact that the market stayed above vwap was in itself a statement that the market would seen higher levels later, despite the news flow.

This market also has to stay above 11244 all of next week for it to move up again.

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Responsive buyers appear

Lots of queries, lots of emails and lots of discussion coming around the Order Flow systems we are employing in the Vtrender trading room.

A trader’s forum has people inquiring about an “afl” for the system and elsewhere people are comparing it to moving average crossovers and what not.

We are amused.

We reserve our comments, happy in the belief that our traders are finding a way to “kick the habit of losing money in the markets”.

I’m not even worried about the rate decision tomorrow. I’ll buy the blue and sell on red.

The Nifty chart gave 5 trades today :

The bank Nifty chart was a simple sell at the morning, with a small whipsaw in the afternoon.

The 5 trades in the Nifty would have given you 80 + points today, enough to pay for an entire month at Vtrender !

The bank Nifty would have paid for a quarter with over 400 points on 1 lot.

Even if you trade one signal a day, rest assured you would not lose your subscription amount to Vtrender.

But then if you want to sit on the fence and keep analyzing, will you ever trade?

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Order Flow for today

The open in the Bank Nifty was below Value low and the selling continued throughout the day. In the process the Bank Nifty closed below the weekly values too.

The purple dotted is value area low from yesterday and the large red PNF candle at 9.30 confirmed seller intentions.The initiative selling continued throughout the day and every rise was used to send the index even lower.Buying attempts at 11370 and 11300 were quickly decimated and the day belonged to the sellers by a margin !

For tomorrow as the market waits for the RBI news, it will be interesting to see responsive activity coming from buyers if there is an early morning sell off again.

The Nifty chart showed the presence of a buyer at 5925 levels.But once he was taken off it was difficult for the buyers to capture that level again.Prices however did make it to 5955 which was the previous days Point of Control as also the high of the day.

5868-5863 hold the key in the Nifty tomorrow.

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BN sells off ..

The Nifty and the Bank Nifty future put in bell shaped profiles to finish the day today.

It was a sideways to an up day today with a lot of the volatility we have so gotten used to, missing from the action today.

Ahead of the Policy decision on Thursday, the Bank Nifty chose to operate in a 100 point range for most of the day.

What do you do when the Market decides to settle in a range?

You trade the range.

Easier said that done, as you do not know what is around the corner.The range which you know of, can easily crack when you take the trade and in the Bank Nifty it can send you off by 100 points in an instant.

Thank fully for us in the trading room, we have Shai’s orderflow charts.

I managed 275 points in 4 trades between 12 noon and 3.00 pm today, by just following the green pink rule. Green for buying and pink for selling

Take a look :

*First Trade : Short from 11605, reversed at 11550 for 55 points
*Second Trade : Long at 11550, reversed at 11609 for 59 points
*Third trade : short at 11609, reversed at 11551 again for 58 points
*Fourth trade : Long at 11551. exited at 11654 for 103 points.

There was a fifth trade at 11654, which could have brought me 11580, but which I did not take. Also 4 other signals were generated before 12.00 and two of them would have given you 100 points plus.

No need of any Technical Analysis. It has been built in. Just follow the signals from the charts.

As Shai says we are truly on the way of letting people know that you can make money in trading and you can “kick the habit of losing money in the markets”.

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Bells

Nowadays, nothing gets me more excited than talking about our orderflow indicators.

It has been a ‘work in process’ and both Viren and myself are very excited to see it in it’s current form. I plan to spend the full day in the trading room on Monday with our subscribers discussing it in bits and pieces and I am sure even by the end of the audio session I will want to talk about it some more !

Here’s why I am excited- If you spend a day trading all the signals the orderflow gives, you are guaranteed to have a profitable day.The only disclaimer I want to add is that the market should move more than 30 points in a given day !!

This is the Bank Nifty chart of the past three days :

There are two signals in the chart : a blue-red signal which gives blue for buying and a red for selling as an intra day stop and reverse method and a green-pink signal which indicates a green for buying and a pink for selling. Click on the chart to enlarge.

Have a closer look at today’s action :

Just following the blue line today would have given you 500 points in the Bank Nifty today !

I remember back in September, just after we started Vtrender Live I had uploaded a video explaining our mission statement– to bring you charts everyday which would give you the best possible location to carry out favorable trades.It was also the time, when we had introduced our vision slowly to our subscribers.

Here’s that video again :

http://www.youtube.com/get_player

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Order Flow