Thursday, January 19, 2006

>Nifty 19-01-2006


Nifty 19-10-2006
Gapped up through 2830. (oh man)
The corrective view is out of window.!!
Took a little while to digest the move and imagine the implications.
Should have taken yesterdays fast vertical rise earlier to close more seriously.

This points us to an import clue in trading. Speed of moves.
A very important things which goes un-noticed very often.

As was mentioned in eariler post Nifty >2830 puts an end to correction.
Getting long as soon as the moves slowed down and retraced in earlier parts
of the day was a low risk trade setup.

Expect much more in nifty in coming days.

We have a 5 legged rise from 2785.
Wave 3 = 1.6 * Wave 1 and Wave 5 = Wave 1 till now.
Wave 5 can still extend and reach to 2895 to make it to 1.6 times wave 1.
Though thats not something you should trade as it gives a poor risk profile.

So whats the action plan.
Wait patiently for this upmove to slow down and show some retracement.
Look at 23.6% and 38.2% retracement of this move and that would give a good area to take longs.

This move went from 2785 to 2875 today. thats 90 pts.
Next upwave would atleast do 90 or more points.
Expect 2 more such powerful up waves.which can easily take
index greater than 3000 which is the longer term targets.
Get long on retraces.

2 comments:

Paresh Shah said...

Rajeev,
Excellent review for the uninitiated or barely initiated. Keep this up as it is my favorite. I would also be grateful if you could give specific ideas at which point you would go long. Percentage retracements are easy for those who understand TA. There are also the just initiated who need some helping hand. Trust you will oblige

rajeev said...

Paresh
Would day that donot indulge in Futures/Options trading until you are in total comfort with your system and that you know the rudimentary stuff.

Mistakes in futures trading leads to huge % losses.