As shown in the hourly chart of Nifty Futures, both toping tails and bottoming tails are visible. Which is indicating that Supply is coming in higher levels and also the bottoming tails are saying that Demand also came in, unlike previous 3 days. We may also consider this as Demand is coming in dips.
Nifty Futures Daily Chart:
Yesterdays move is with higher volumes when compared with the previous 3 days up move. For a true sustained reversal, Demand should be clearly visible but in this case high volumes didn't come yet. Also in the yesterday's down move or retracement (at present) is with high volumes which is not a good indication for bulls. Unless we see clear increase in volumes in the upmove one can't trust this as a reversal.
Nifty Futures Hourly Chart:
On the lower side nifty may take Support from yesterday's low below which next support is at 4130-4120 levels.
18 comments:
Hi Doji,
I have a silent reader of your posts on a regular basis and appreciate your efforts from the deepest core of my heart. I would request you to let me understand that which time frames should you suggest for intra-day trading in options and futures. I have been trying 3 months (daily OHLC to identify applicable patterns including candlestick ones), 5 days (OHLC, 1 hour and 15 minutes) and daily (tick, which actually shows multiple whipsaws, 1 min, 3 min and 5 min. But somehow it has become very erroneous to track so much data.
I would request your suggestions in relation to the above.
Regards,
Dipen
Hi Dipen,
Thanks for your appreciation.
For intraday, I keep my 5 min and 1 min charts on the front screen. And I do zoom out to 15/30/60 minutes charts to check on swing patterns.
whipsaws are integral to the market and that is how market differentiates the wise from the un-wise. If every thing worked as written in the books, who is supposed to loose? :)
You will learn to avoid some of them over a period time, dont worry. And it surely takes more than 3 months. please be patient and concentrate on learning.
Also, as you spend time every day , it will be not as difficult to read this amount of data.
Doji
Hi Doji,
Thanks for your prompt response and suggestions. Will you suggest Amibroker (with Pattern Explorer) or Metastock for better chart reading.
And actually about the three months matter, what I wanted to say was (may be you will find it to be a bit amateurish) I use three months charts as well. Sometimes I have seen trends and reversal signals confirming their position in three month charts.
Its been like a year I have been into trading. And I would like to share my experience in some matters. Like sometimes I find failure of the syntax in price formation after confirmed pattern formation. Volumes are the ones that come into role then. And possibly its the role of Investment Psychology which governs the scenario.
During trading I have using MACD, RSI and ADX to interpret divergences, trend formation and definately oversold / overbought conditions, but using them in intraday markets seems a bit irrelevant under the "ticking circumstances". It is as you rightly said,"f every thing worked as written in the books, who is supposed to loose?" So do you feel that charts are more relevant than technical indicators.
Regards,
Dipen
I havent used metastock much, but will surely suggest Amibroker. Charting is easy as well as system development.
Sorry I took in the wrong meaning of your 3 months mention :)
Yes, patterns that form naturally based on supply-demand disequilibrium are the one that have high success ratio and volumes are important to decode them. Pattern also form by co-incidence and randomness, which may not show any volume support. They may not or may not work, but definitely not tradeable in my book.
No, I dont think charts are more relevant than technical indicators. Both are interlinked. price-volume-time are the primary data that market gives us. Indicators are secondary, so are patterns. so all it boils down to is how you interpret them. I do look at indicators, I have custom built indicators specifically to compliment my style of trading. So, what I am trying to say is that you dont compare visual chart to indicators but develop the best of both. Hope this helps.
Doji
Hi Doji,
I have observed the formation of a cup and handle in Nifty. I would request you that if you can make a quick glance at my blog (http://trading-in-nifty.blogspot.com/)and let me have your views, it would indeed be very kind of you.
Awaiting your feedback on the same.
Regards,
Dipen
Hi Dipen,
Nice analysis. This pattern is infact discussed in many forums since the cup shape is formed. Interestingly, the bottom of cup here is an accumulation but the up move does not have significant volume support. Any one trading this on should keep closing trailing SL in my opinion.
Doji
Hi Doji,
Apologies sought for so much delay and lots of thanks to you to make me understand the failure of the cup and handle formations. Actually I found the formation of a significant inverted Head and Shoulders over a pretty long period (both in daily and weekly charts).Again, the Bullish Gartley Pattern as discussed by you also supports the bullishness of the market but somehow the volumes seems to be a bit lagging.
I have one request for you. Actually I have tried many things in options, but lack of proper datas lags down my approach. It is my request that if you can provided tick datas of "In the Month" options, it will not only help me but a lot of us.
Awaiting your reponse on the same.
Regards,
Dipen
Hi Dipen,
Sorry, wont be able to provide options data.
Doji
hi dipen if u are interested in options,google "samao sky",download a software called "options oracle".. in case of configuration issues, do let us know :)
Doji,
Thanks for your reply. But can u tell me some technical indicators which apply strongly to options.
Kurichh,
Thanks for referring me to the software. I will use it and let u know as to whether I am facing any difficulties.
Thank you once more for your cooperation.
Regards,
Dipen
Kurichh,
Downloaded the software, installed the same, but having problem in downloading option details. Cannot identify the symbol for NIFTY options or others, traded on NSE.
Seek your advice on the matter.
Regards,
Dipen
hmmm...on the left hand corner there is a box in which u will have to type in the script name... also in the configuration option,set the data source or server to nse wala :)
else email me :- saurabhkurichh@gmail.com
also dipen i wonder if anyone uses TA in options :) :)
dipen did u get the software to work for u ??
if not .. then first under configuration tab, choose the server as "dynamic server NSE ", and then in the top left corner there is the box for the stock name , hit enter or click refresh after that :)
do let know in case of any prob
Kurichh thanks for your support and successfully configured the software. Even though initially everything is making tangents over my brain :) yet I suppose I can understand the greeks and others with practice.
And about the TA, actually I was trying to configure a correlation between ADX and Delta of Options. Actually trend confirming indicators help a lot in buying exact puts and calls.
Regards,
Dipen
Kurichh, I came across one of your posts where you have mentioned that you do analysis of IEOD Data. Can you suggest me a few guidelines as to what I should do in relation to IEOD Data for next day trading.
Dipen
hi dipen....if u have read it somewhere written by me...then its a mistake on my side,would ask doji to delete that post :)
No issues Kurichh, but can nu help me in linking PIB to Amibroker.
Dipen
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