Nifty has been doing volatile moves and will continue to do so while making a bottom. Giving good trading opportunities.
These are some charts I had made on the August 2013 and May 2015 similarities. It is possible to see a whipsaw similar to previous Head and Shoulder breakdowns. But i do not expect a V shape rally.
These are quick charts just for observation !! No two moves are exactly similar.
Head and Shoulders Whipsaws
August 2013 – Nifty at 5100 –
May 2005 – Nifty at 2000 before getting into a big bull market.
December 2011 – 4500 Nifty - ( I had written a lot of posts back then on the bullish reasoning )
Now look at the range of Nifty back in August 2013 and now in May 2015.
August 2013 – Nifty at 5100
A much deeper correction and much bigger swings also it had broken multiple important lows.
Currently our moves are half of it. We are basically not used to volatility given the nice run in last 1 yr.
Sentimentally we are nowhere close to August 2013. Remember USD INR at 68, Liquidity tightening, US, Europe etc 🙂
So do not expect moves to be similar and also bounces and falls to be smaller in size.
Nifty View
Continue to stick with the view of buying in steps and bottoming out is a process and can take its own time.
We got a good bounce from buy zones of 8080 and could book part at 8300. Re-entered the same at 8150. Will now add on another low with positive divergence or wait for a bounce to book again is the trading strategy. So have good buffer to the strategy and risk management is in place. No over leverage and keeping open to add.
Check this recent post sent to Technical Traders Club right on the day Nifty made a low of 8000.
https://nooreshtech.co.in/2015/05/nifty-technical-view-bottoming-out-is-a-process.html
The major focus now is to look for stock specific opportunities.
One more reason to be stock specific is the good strength in Midcap and Smallcap Indices which tells you a lot of selling is index based.
There should be a lot of trading and investment opportunities in smallcaps/midcaps going ahead.
Disclosure – It is safe to assume that i would have vested interests in all stocks discussed. Please do your own research and risk management. Take above post as educational or timepass.
There are few interesting stuff in store for readers this month !!
1) Free Webinar – May 16th 2015
https://nooreshtech.co.in/2015/04/free-webinar-trading-technically-and-long-term-technical-view.html
2) The Investing Lab – Delhi May 30-31st ( A must attend program for investors)
Planning for a session in Chennai as a few queries. If interested mail nooreshtech@analyseindia.com and may need volunteers to help.
DISCLOSURE
Nooresh Merani
Securities covered above: Alstom India, DCB Bank, KRBL, Welspun, Nesco, Avanti Feeds
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May 13, 2015
plz post a few selected midcaps for the short term,regds
May 15, 2015
Good of your view thanks