Trading strategy in Volatile Market

Market shown that it is 'Supreme ' and made mockery of most of the analysts . Globalization took toll on Indian markets. Most of the analysts including me, were not comfortable with the way market was trading above 4200-4300 and were of a view that market will go down and try to test 3800-3850.

Market did the same but not in the way everybody thought. It was going down like falling the house of cards. IF that was not enoguh, the V shaped recovery after making bottom near 3800 made most of the players on wrong foot.
The non-stop news coming from US ,making players unable to take any sort of positions be it long or shorts. Daily Gap up & down in Indian market ( curtesy Dow Jones) made all investors, traders & Players like HNIs, Large traders or small Fund managers very uncomfortable.

Market shown its Suprimacy , So players has to go to basics. The first rule 'Bull Market has no Resistances and Bear market has no Supports'. The supports were breaking so fast in 6-7 days of downfall from 4500 to 3800 that the levels were just numbers and no supports.

Second Rule - In bear market relief rallies are too fast and vicious. The same things we are observing now, we are about open a good gap up on Monday . So we are retracing fast in 3 days to the fall. To add to the 'Firangi induced' volatility, is our last week of expiry. So every player will be ready with his position to cover on or before expiry as future look very uncertain.

FIIs are Major sellers in Market causing Rupee to depreciate as much as 15% in last few days. However IT stocks are not able to gain much because sentiment is much hampered for these stocks as much of business for them is from US ,and everybody is suspicious about the health of US companies to spend much on IT development . This would have been a boon for IT companies as they were to have Super profits of 15 % due to depreciation of Rupee.

Trading strategy : Last few months It was looking like market moving in a range with small volatility. So major HNI and Small Fund Managers were happy in selling Options ie calls and puts to get 'COOL' 3-4 % of profits in a expiry. This time many of them had burnt fingures because of two way movement. They had to go for hedging/ counter hedging and made things more complex.
While doing this one tends to forget simple rule that 'OPTIONS WRITING PAYS ONLY IN NON TRENDING MARKETS'. One can not be stuborn with markets and make a single strategy (like Options writing) to earn in every type of market.

It is better opportunity ( & simple too) to play with plain Options ie calls and puts strategy like Strangles, Straddles etc. Plain calls and puts are paying much more with limited risk .

Now we are moving in last week of expiry and are about to open with a gap up on Monday. Technically there are series of resitances starting from 4330 to 4550. It is advisible not to Fight with market and Play with simpler tools like Options, when we move 100 - 200 points in nifty in a day. (Those watching charts can watch Candles & gaps in daily charts)

Hoping this write up will be eye opener and Wishing all Happy and Safe trading.

Nifty Futures for Sepetember

Nifty Futures has a good support at 4210 -4150. The trendline support looks good.
Nifty can move up, on the back of fall in crude prices. ( But Dow is not supporting as of now !!!).

One can expect a possible pull back (may be on Thursday or Friday).

Nifty Futures has a rest at 4650 --4725. It will require much efforts to cross these hurdles.

One can go long on pull back ,near the supports.

Nifty Futures for 25 th Aug to 30 Aug 2008 : SG

Nifty futures may open gap up around 4390-4400 on monday because of strong US markets. We are entering in the Expiry week ,So Some Volatility is expected.

The Nifty has a resistance 4400>>4465>>4515 .The suports are at 4330>>4310 and Finally 4250.
This being Expiry week and we are opening Gap up and directly near resistance of 4400 . One should be cautious at higher levels.

Buy on DIPS only can be the strategy.
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Nifty futures for the Week 11 to 14 th Aug -- SG

This is the truncketed week because of holiday on account of Independance day ..Nifty futures may open gap up around 4600 on monday because of strong US markets.

The Nifty has a resistance around 4630 >>4656>>4695>>4720.
The suports are at 4590>>4565 >>4515 and then 4470 >>4440

Be careful as this is Truncketed week . (Small week - Big Week End)

Unitech going towards 220 ? --SG

Inverse Head and Shoulder is visible in Unitech. This is a bullish signal.

If Unitech is able to trade above 176-77 for a day or two , it can see the targets of 210-220 range.

Trade(Swing):
Buy Unitech if it trades above 177 with Stop loss of 170 , for a swing target of 210 to 220

Nifty Futures -August tgt 4700>>4900

Nifty future is looking good on the charts. If it manages to trade above 4535 for a day or two, we could safely say we can see 4900 in August.

With Crude cooling down and World markets stabilizing, there is a high probability of Nifty future moving up and going toward 4900. There is a rest at 4700, if NF is able to cross this rest it can show next targets of 4880-4920.

On the down side there is a good support at 4110 to 4070.One can buy at dips with suitable stoploss.

I will try to post some Options Strategy at dips, so that the risk is reduced much and one can gain for bigger targets.

UPA Winning Vote of Confidance? -The Charting Way---Santosh Gundecha

It is said that charts speaks. Now can we have better event than this (Vote of Confidence)? Today Nifty Futures just broke Falling Wedge on upside at 4050 levels. We are still on border, however we have broken on upside. The next targets are coming at 4185-4220 and then 4320.

I am not looking at any other view or news. Just trying to read chart. It is a difficult task but I am making an attempt as a Case Study. If we trade above breakout level of 4050 on Monday and Tuesday too , we can safely assume that UPA IS WINNING the vote of confidence.

I know I am making a big statement . All analysts will start saying this , after result is declared.. I am making a view with my neck out .

The other view:
The other view I am saying now , which u all will say , is contradicting to my earlier view but please read between lines. We are more intersted in markets, and its movement. If we trade above 4050 on Monday and Tuesday ,we are surely going up..Let the result of UPA be any ways. May be we will have some blip on 23 rd and People get trapped in shorts and market start moving up. So I will suggest to be careful in shorting after voting is done.

This is all my guesstimate, and attempt to read chart. The condition here is market stays above 4050 for two days.

The last but not least..My favorite subject-- Astro views.. Lets hope Saturn and Mars are cooling down and helps market.

Disclaimer- This is just an attempt--Pl trade with stop loss in place and make ur own judgement before trading and investing , as this is not a small issue.