Absorption

This is an interesting pattern that can occur in Nifty Futures frequently. This is a game played by Big money to trap the retail traders. They can be some institutions or some HNI cartels.Whoever they are, be very careful when you see this pattern or slightly different variations..

Nifty gaped up above the previous day high and printed two bullish candles which closed at the extreme. The sentiment was extremely bullish.Next two candles were reversal candles with topping tails. Traders thought it was a normal pullback and bought aggressively.For the next one hour NF traded at the area forming an ascending triangle with higher lows. Everybody expected a breakout to new highs

Big sell orders were sitting above this level and all the buying was getting absorbed quietly. After a while Bulls started panicking and started to exit bringing the market down.Who ever played this game made lorry loads of money for sure.

At this time NF was trading at a hefty premium . This gave the sellers more confidence . Even if spot Nifty goes up there was enough "Crumble Space" to absorb and minimize the impact.

Pay attention to absorption  and play the right side of the market

29022012

Nifty gaped up above PDH and printed 2 bull candles. Naturally the bias was for an up move after a pull back.Most of the people might have bought the pull back. Those who went long at the pullback will be stopped out and they will also miss the FTC short trade. The other 4 opportunities were good.

Notice how  the price respects  the prominent levels like PDH,PDC, DO etc.

Aya Ram Gaya Ram

Every one who is familiar with Indian politics might have heard  this term "Aya Ram Gaya Ram".
It was Haryana which gifted this usage to us when then Hassanpur MLA Gaya Lal changed parties three times in a day in 1967. Mr Gaya Lals's feat was immortalized in the phrase " Aya Ram, Gaya Ram."and is regularly used to denote defection and horse trading by politicians.

But for us, the Traders, Gaya Lal is a role model. Watching  the developments without any bias and joining  the winning team  without hesitation is one of the "Must Have" character  of a winning trader.Anything can happen in Markets at any time. It is disastrous to approach and trade the markets with a bias.

We are not permabulls or permabears . We are with the winning team. We sit on the fence until the bias is clear and join the winners.

Defection is not a bad thing in Trading.

Thank God. The Anti Defection Bill is not applicable to traders.

28022012

Nifty Gaped up above the previous pivot high . Expectation is move inside the previous day range. BOP of previous day pivot high gave a long. There were no significant levels within the move. First trade gave good profit. Second BOF also gave some profit. I expected a sell off after the DT, HOD breakout failure which was also around the Friday bottom and PDO.A breakeven trade
I wonder why Nifty is trading at such a high premium.

27022012

Market opened within previous day range . First candle itself is a breakout candle of PDL. A major transition to outside day. trading below PDL, DO, PDC. Trade the trend. Avoid temptation to go CT. There were two BOF . But if you notice the First Trouble Area., it is too close . Even if one attempted the second one. there was enough time to exit without a loss.
There were no major decision points on the way down except a BRN which did not hold.

Very very difficult to ride the trend till end. Most of us will be shaken out by a pull back



 

The Chinese Bamboo