Balachandran Viswaram’s Post

The Nifty closed above 22,000 for the first time in a month. The last time it did so was back on January 16. On the charts, it has also made higher highs over the last three sessions.

Nifty new high, non-stop high! RSI: Daily - 78 Weekly - 77 Monthly - 84 Previously, monthly RSI of 84 was seen only in 2007 (excluding 1992 when Nifty was introduced) So, this kind of a raging market is new to most of us and definitely new to me. Till 26200, I could estimate based on flag and pole breakout pattern on monthly charts but beyond this, it is out of my imagination and accept that humbly. Markets going higher is fine but not good if it happens in a single stretch. But that doesn't matter as markets can be irrational. The most important question is: Where will Nifty stop? Honestly, I don't know! What to do with the positions? Apply the basic rules of trading. If it's crossing your risk appetite, exit it for now and later you can enter when you feel comfortable or when you understand the market better. Anybody around cost to cost or minor loss can take an exit. I plan to hold my positions as long as I feel comfortable. All bulls would be rejoicing and giving higher targets and all bears are in desperation to prove them wrong. Neither of them need to celebrate or prove each other wrong, it's all about your own money at stake. If you are comfortable to buy here, please do, if not comfortable then patiently wait! Ultimately markets will come to its senses but when exactly, nobody knows although I expect before Dec or mid Jan. Most importantly, for now, avoid reading any views of bullishness or bearishness!

Nifty Outlook - Next week Markets are in a tight zone with pressure applied both from bulls and bears side. Apologies, was busy in few products set up, thus could not update last week. We took 2 trades last week. Trade 1: On Nov 1st (Friday), we built heavy shorts at 24280 levels but managed to eke out partial profits at 24134, while remaining neutralized cost to cost despite high notional gains initially as focus was to employ strtaegy as a hedging tool rather than a speculative one. Trade 2: On Nov 5th (Tuesday), we flipped and added gradual long positions at 24150 levels, on condition that market will close above this level same day (which happened eventually). We booked partial profits at resistance level of 24500. Additionally, increased long positions when market briefly went below 24135 on Friday. However, markets did not show a decisive bounce as a result we were forced to exit longs around 24130 with small losses. However, last week close, show renewed signs of weakness, thus we have again taken short positions again on Friday's close at 24140 levels with first target price of 23900 and then putting SL on rest at cost price. If market, opens higher early next week, we plan to increase shorts. Strategic shorts created at high levels are already in place. #fno #trading #optiontrading #niftyoptions

S&P500 Emini – Tuesday, May 7, 2024 High-Probability, Cash-Flow Generating Trades: Mastering Intraday Entries. Discerning high-probability entry points is crucial for generating consistent returns in the market. This post delves into several recent trade setups that showcased the effectiveness of a disciplined technical analysis approach. Precise Long and Short Entries for Maximum Gains: Bar 3 signaled a powerful confirmation, solidifying the continuation of the uptrend from the opening. This presented a lucrative long entry opportunity, albeit with a defined range to optimize profit capture. Bar 15 displayed a classic shooting star reversal pattern, hinting at a potential uptrend exhaustion. We strategically awaited a confirmation bar from the bears to capitalize on a short entry with a clear support level (ovn-h) for targeted profit booking. Bar 35 emerged with a hammer pattern, followed by a robust bullish reversal on Bar 36. This confluence signaled a compelling long entry opportunity, especially considering the bar's closing price near its high and decisively above the 20-EMA resistance. Bar 47 witnessed a powerful reversal, pushing the price action higher from beneath the 20-EMA. This not only confirmed bullish continuation but also presented a fantastic second-chance long entry or a strategic scaling-in opportunity. Bars 60 through 73 formed a bullish ascending triangle pattern. This formation suggested a high likelihood of another upward price surge by the session's end. Bar 74 emerged as a decisive breakout bar, solidifying the bullish momentum and offering a high-probability long entry point to capture the anticipated price advance. Important Disclaimer: These are speculative trades with the potential for high profitability. However, they are short-term in nature and employ stringent risk-management rules. This approach is not intended to constitute investment or financial advice and is best suited for experienced traders comfortable with a higher degree of risk. Key Support/Resistance Levels for Today: Yesterday's High, Low, and Close: 5207.75, 5174.00, 5204.00. Overnight High and Low (as of writing): 5174.75, 5155.75.   Warning: I do not solicit business through direct messages. #financialservices #hedgefunds #stocks

Nifty Stance Bullish ⬆️ The stance on Nifty has remained bullish for many consecutive weeks, and it seems like there is nothing that can deter this powerful train. On a weekly basis we gained 190pts, we saw a minor weakness on 10th July but by the 3rd hour that day, we resumed the buying momentum. The new ATH is now 24592, just shy of 24600 and this surge came today when NiftyIT swung close to 5% intraday. Quite ironically the IT component firms were rallying 6% or more when their CEO said, they arent sure if the firm was on a growth path. From a trading perspective, there isnt anything to be done specifically. The premiums of close OTMs are so cheap that it is ill-advised to short them. Somehow this morning, I was tracking 24800 and at the premiums of Rs14, I felt it was too much undervalued. Once N50 picked up momentum, this strike rallied till 48 before closing at 23. I still think 23 is undervalued even after N50 moved up 186pts intraday. Probably it could be because we have a holiday in between. My ratio spread algorithmic strategy is paying good dividends, each passing day — I am making finer adjustments to the re-entry and stop loss logic. The only disadvantage right now is that the direction of Nifty has to be chosen manually and if I get it right — the algo will close in the green, 100%. If the direction is long, I need to run the Call ratio spread, if the direction is bearish, I need to execute the Put ratio spread. If I get the direction wrong — then the losses are quite steep. Weekly, we had another green week. The stance remains bullish till we get a red week. I am quite sure the bears are facing an existential crisis. --- BankNifty Stance Neutral ➡️ Banks had a losing week this time, we fell -282pts ~ 0.54%. The fall was quite intense on the 11th of Jul when we hit a swing low of 51749, the beauty of that day’s price action is that we managed to close in green even after that selling rout. This news broke out on 10th July — “RBI Raises Alarm Over Misuse Of Internal Accounts In Banks, Orders Closure”. If the same news had broken in the US, the component banks would have been down at least 20% that day. We did not even fall 1% that day, interestingly a 16mts candle today at 10.51 managed to surpass the total points we fell on 10th. The stance has been changed to neutral as we lost some bullish momentum. We never went bearish though, despite that news BN component stocks managed to do well to absorb the selling. Interesting data points to watch out for next week would be 1. The reaction to higher than expected inflation — 5.1% vs 4.75% last month. 2. 2800 crore outflows in Quant MF in the last week plus the news of CFO quitting. 3. The sudden surge in IT stocks has more legs or not.

Nifty Analysis - Stance Bullish ⬆️ Recap from yesterday: “Nifty managed to pull up and close above 22358 which is not a bad thing at all, but what was worrying is how NiftyIT traded today.” How many of you really thought we would hit a new ATH today? Even if you happened to read yesterday’s post-mortem report - you might not have gathered enough courage to go long. The markets really took all of us for a ride today. The opening hours it spent below the 22295 support showing a strong intent to fall. NiftyIT was trading with deep cuts and went almost to negative 558 points by 11.39. BankNifty on the other hand started strong and stayed strong and could pivot NiftyIT to go green. Even though the market views all favored us, the positions did not. The underpricing of the call options and the strong short-covering really hurt us. What is more saddening is the low conviction of the CALL short sellers, the moment the market turns - they run for cover. And this running away is fueling further upmove which triggers the next strike’s covering. The strength of the last 2 GREEN candles requires no special explanation. Right from the support level, it went and took out the all-time highs. Two things were in favor, firstly the strength of Banks and then the massive reversal of NiftyIT. We are maintaining our bullish stance for tomorrow as well, but we are not expecting 22600 to be broken tomorrow. BankNifty Analysis - Stance Bullish ⬆️ The major move in Banknifty in the opening hour itself. See the encircled region and see how the 47465 support came into play. Support and resistance have the highest weightage in my technical indicators arsenal. If you have been reading my reports - you may agree to it without doubt. The only thing is, you need to draw the horizontal lines carefully. Two things happened when BN rallied 713pts ~ 1.5% in the opening hours. Firstly it gave so much of positive momentum to Nifty50 that even a laggard like NiftyIT had to reverse course and align with the GREENs. Secondly, it threw our algo positions under the bus. The swift movement ensured whatever MTM loss the positions went into, we were sure that the end was never going to be in green. Not quite sure if we will take out the ATH tomorrow, but seems like we are going to have another green day tomorrow. As long as the support of 47465 is respected, the bulls are going to have a nice time. Algo Trading Our algo trades ended today with a loss of 19656. The opening hour casting its spell, the MTM loss was almost 65710 at a point, so we are quite thankful for the wonderful recovery we had post that trauma.

Has Nifty formed short-term bottom? Here's what to expect next week

Nifty Analysis - Stance Bullish ⬆️ Recap from yesterday: “On the higher timeframe, the last candle of the day stands out, ample GREENery for the Bulls to feast. We are not removing the double top (M pattern) for now, because to negate that Nifty50 has to take out the ATH.” Was the Nifty’s price action predictable in the last 2 days? What do you think after reading our post-mortem reports? Yesterday we had a rally from the support 21913 to the resistance 22051. And today we briefly touched 22051 support and then surged upwards. Today’s price action was 100% Bull dominated - we did not even have a retracement. Nifty ended the day with a gain of 355 points ~ 1.62%. The odd man out today was NiftyIT, which did not want to participate in the rally and instead went the other way. It ended the day with a loss of 204 points. BankNifty played a pivotal role today in helping Nifty50 take out its ATH, it is official - the new highs are 22353.3. And we may also have followthrough momentum tomorrow during the special trading session. On the higher time frame chart, 2 things happened today. Firstly, we broke past the 22051 support/resistance zone which meant we did not have any more resistance. Secondly, N50 went above the double-top pattern - negating that, so from the next day’s report it will get removed. Our stance is now bullish and agrees with what we had in mind yesterday. We were just waiting for the double top pattern to be negated. BankNifty Analysis - Stance Neutral ➡️ BankNifty also gets a stance change today i.e. from bearish to neutral. All that is pending is to take out the 47465 resistance to go bullish. Most likely that should happen tomorrow and we are eagerly waiting to trade on another Saturday. BN closed the day with a gain of 1166 points ~ 2.53%. But unlike Nifty, BN is not near its ATH. We have some more distance to cover. Look at the number of green candles in the higher time frame. 11 consecutive 63mts candles i.e. 693 hours of unchecked bull run. We are very sure if the same had happened yesterday - a lot of option traders would have tripled their capital. Expiries usually attract hero-zero traders and most of them prefer to load on BankNifty CEs and PEs. BN is safely out of the bearish channel and that is why the stance has been revised from bearish to neutral. Algo Trading Our algo trades ended today with a loss of Rs39177. It was on the expected lines as the algo is based on option selling and for strong directional move days like today - it will run into deep cuts. In a way, we are happy that the loss was not 63891.

WEEKLY TECHNICAL INSIGHT STAY LONG WITH THE STOP-LOSS OF 24300 THE WEEK GONE BY ·    In last week’s report we had said that 20-DMA, placed around 24550, was the immediate hurdle while 23893, the bottom made during the week, was the important support. ·    Nifty, after touching a high of 24472 on Monday, slipped to 24100 from where it reversed and surged all the way to 24563 before ending at 24541. For the week, the benchmark gained 0.7%, snapping a 2-week losing streak. OUTLOOK ·    Nifty closed above 20 as well as 34-DMAs on Friday and also confirmed a “Buy” on it’s hourly chart. 24825, the 78.6% retracement level of the recent 25078-23893 fall, is the next upside target, above which, 25078, the top made on 1st August, would be next upside level to eye. ·    24300 is the immediate support on the hourly chart, upon breach of which, 24100, the low made during the week, would be next downside level to eye. ·    Meanwhile, trading longs can be held on to with the stop-loss of 24300.

Nifty Analysis - Stance Bearish⬇️ Recap from yesterday: "Ideally, we need one more red candle below 22295 for some bearish safety. 22051 is the next support level which could be taken out pretty easily if the shorts pick up momentum." Nifty hits an intraday low of 22079 today and a decent recovery to end the day at 22177 (22147 weighted average close). Honestly, the dip buyers were not that aggressive, but the bears were not really able to push down the prices.  If you look at the higher time frame i.e. 63mts, our closing today is almost midway between 22295 and 22051. Tomorrow 17th April is a holiday, so our markets will only resume trading on 18th. Thursday we have the Nifty50 expiry, so that makes things more exciting.  For bearish continuation, we need to take out the 22051, whereas for Neutral stance shift, we need to take out 22295. If we fall further below 21913 then that would also mean the negation of inverse H&S pattern of 20th March 2024. The Nifty50 algo trades ended with a profit of 9195, exited prematurely in the opening 30 minutes itself BankNifty Analysis - Stance Bearish⬇️ BN managed to hold on to 47465 levels quite decently. All intraday straddlers would have had a decent day as there were no swings or whipsaws. We opened below the 47465 level but managed to close above it giving some hope to the Bulls. If we close above 47465 levels on the 18th, I might change my stance from bearish to neutral. For bearish continuation, we need strong downside momentum - agreed that we lost 288pts ~ 0.6% today, but not breaking the support level is considered a negation of the trend. In the higher time frame, this is more obvious. See the closing 63mts candle, it is strong green with the lower part of the body right at the 47465 level. The next move would be more based on news than technical analysis, so it would even make sense to keep a close eye on macros like Iran-Israel conflict. BN algos ended the day with a profit of 26757, again exited prematurely in the opening 30mts itself as the time condition of the profits were met.