Retracement or Reversal?

 

Source :- http://www.investopedia.com/articles/trading/06/Retracements.asp

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Market Trends

Market Trends are classified into :

1. Secular Trend = A secular market trend is a long-term trend that lasts 5 to 25 years and consists of a series of sequential primary trends.
2. Primary Trend = A primary trend has broad support throughout the entire market (most sectors) and lasts for a year or more. Length of these markets generally last from 1 to 3 years in duration.
3. Secondary Trend = Secondary trends are short-term changes in price direction within a primary trend. The duration is a few weeks or a few months. This cycle could last as little as two weeks or as long as six to eight weeks.

 

Source :- http://en.wikipedia.org/wiki/Market_trend

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Interpreting Stocks : 20th July 2010

NIFTY EOD Analysis as on 20th July 2010

 Red Candle in a rangebound market, with low volumes showing that the supply was less today.
NIFTY is approaching the support level at 5346 level. IF Global Cues favour, we may see a bounce from this level to upside.

EMA3 is above EMA13 (+).
Slope of EMA 13 is up.(+)  EMA 13 is at 5346 level
EMA13>EMA39.(+)

Answers for Yesterday
Todays Bearish Signals:
1) MACD and Price -ve divergence.
2) MACD on the verge of giving a sell signal.

NIFTY is moving in a rangebound market since the past few days and falling downwards.
Supply has been reducing now and NIFTY is approaching the support level at 5346 level. If all favours well, we may see upmove from this level now.
Also, the 5400 level resistance is acting as a barrier to move up. We are really in a tight range now.

Questions
What is going to happen next? Let's wait and watch.

Important Points from Teach a Man to Fish...

1) After an intermediate uptrend, the correction should be only 33-66% of that cycle. (One intermediate cycle = one intermediate uptrend and one intermediate downtrend).

-- Greater the retracement, the increased likelihood that the primary trend has reversed to the down.

2) Substantial increase in volume during the price decline supports the down move.

3) The market moves in trends. We have an uptrend, downtrend and sideways trend.

4) That there are different categories to Trends. We call it Major (when we are talking long term and of the monthly charts), Intermediate (off the weekly), and near term or short term (off the daily).

5) We know that a series of higher highs and lows is termed a rally. That a series of lower lows and highs is termed a decline, that a series of higher pivot lows and highs is called an Uptrend, and a series of lower pivot highs is called a downtrend.

6) Basically, in a nutshell, for starters, keep away from trades where the daily is setting up, and the weekly is still in a downtrend. The desire to predict and get in at lower prices will cost you dear. Get into another stock where we have a weekly in an uptrend, and then buy declines.

Source :- www.traderji.com

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Interpreting Stocks : 19th July 2010

NIFTY EOD Analysis as on 19th July 2010

 Red Candle in a rangebound market, with average volumes showing normal selling pressure.

EMA3 is above EMA13 (+).
Slope of EMA 13 is up.(+)  EMA 13 is at 5343 level
EMA13>EMA39.(+)

Answers for Yesterday
Todays Bearish Signals:
1) MACD and Price -ve divergence.

NIFTY is moving in a rangebound market since the past few days. The 5400 level resistance is acting as a barrier to move up.

Questions
What is going to happen next? Let's wait and watch.