Above chart shows how Sensex divergence gave a buy signal at newer lows. Although there are more studies done before we initiate a buy but above chart would be a good reference for all techies.
Although i may not be a great fan of indicators and we use combinations of many technical observations but above analysis was part of technical methodology through which we were buyers at the lows !! to gain a quick 15-25 % bounce in specific stocks and 8-10 % index bounce , whereas the market-men went short.
Technically a bounce to 13500-14200 is possible but we would be looking to book partially on stock specific levels closer to upper range. A bounce from 12200-12500 to 13200-13500 is a 10 % index jump! if it comes.
On Monday when markets just broke below 12500 the usual market consensus was to go short while our view was to go long late in the evening when nifty was at 3830. We saw an intraday bounce to 3890 where large leverage positions were advised to be booked and carry rest. The technical reasons remained for the bounce but the US global cues did give a huge scare to the stoploss but the technical reasons to remain bought were still in place and markets not breaking 3750 gave confidence to add position. Markets and technicals may not always go with the general market consensus but markets are supreme and they continue to move as their supposed to although the participants may go wrong in their view. The bounce back was strong and Nifty reached our tgt of 3950 !. Would update more tonight if possible.
Messages sent to clients :
Buy Nifty Futures in 2 parts at 3845 and 3795 stoploss of 3750 tgt 3950 positional.
Nifty futures raise stop to 3830-3840 if takena larger leverage position book part at 3880-3900.
Nifty futures keep a stop of 3750 keep provision to add.
Book profits in Nifty futures at 3935-3950 or keep a trailing stop of 3900.
Its better to pay a fractional % ge of ur investment for a little professional and disciplined approach to investing and trading to generate gains with lesse risk then erode the portfolio without any help or rather learn the process of technical analysis and be independent in your decisions . We can help you in both of it by stock specific advice or training course . Check http://analyseindia.blogspot.com for more details or mail to firstname.lastname@example.org .