Update

The markets have moved between 4855 and 4887, two of the pivots we identified yesterday.Refer to this.

The move which we were waiting for yesterday, has materialized today.Never mind.

I was clear that a break of 4824 did not present a good risk-reward opportunity for a short in the short term.

I'll post some short term charts shortly.

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11.44.

Trade Alert : Nifty

Description : Buy Nifty

Price : Above 4891

Sl : 4870

Target : 4922

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12.00

On the downside 4844 needs to be protected today by the bulls.

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12.03

The market is not efficient; however, the mechanism
for establishing the current trade-able price—the auction process—is
the most effective mechanism for allocating securities to be traded among
those submitting bids and offers. Once the auction is underway, rather than
attempting to predict future prices, we instead observe as the market discovers
future prices. We continually assess the force and health of this
auction process in order to identify asymmetrical opportunities that can
provide optimal trade location—trade location with less risk.

Excerpt taken from " Markets in Profile " by Dalton.

Response is to a dear friend who says that I am siding with Bulls.
As stated earlier on the blog- We are neither bulls nor bears and we are not emotionally attached to either. Never let emotion come in the way of prices.

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2.26.

Nifty at 4895.Nifty is facing resistance at 4899. Needs to be taken out on this move up.Bring Sl to 4885. I'm not willing to risk more than 6 points on this trade, which has not gone to plan.

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2.52

Kiran wrote in the comments:

Appreciate your foresight and clarity of vision. Some of the other blogs which were shouting 4600 have fallen silent and so are the bears who called for 4400 and what not?

My question to you is keeping in mind that you didn't take a fresh short at the break of your 4824 level, is would the markets be still 80 points up today, if the dow had not reacted like that yesterday.


Good question Kiran.let me make an attempt to answer :

The Nifty gapped up to 4855, up 50 points and not 80. Please give a little credit to nifty as it managed the remainder on it's own. :) .

We live in a closely knit financial jungle, where money flows through the globe and players play regardless of boundaries or countries.Hence sentiment in one part can affect the whole and vice-versa.We are a strong financial market amongst the most liquid in the world, hence not immune to global currents.

Did I see a gap up. The honest answer is No.

But as an honest profiler, I would have gone back and noted the reactions between 4824 and 4855 and the day low and the day close.There was a story in all of that.

But in market profile we learn to look at the close and the open as exclusive events and see what results it gives us in relation to each other

This morning the market gapped up to 4855 and sustained above that for the most period unlike yesterday.The other reference was that of 4889, and I issued a trade alert above that.

It was very easy and based on yesterday's action. Two trades :

1) Long at 4855, target 4887
2) Long above 4891.

Hope this answers.

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15.10

Nifty on target of 4922.

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