Good morning.
We are playing that pocket of yesterday, between 5385 and 5410 again.
A break of 5385 should move it to 5355 and above 5410 can see 5445.
The value areas are 5402-5411-5420 for Nifty
For the bank Nifty these are 10169-10116-10063.
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Friday, July 30, 2010
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46 comments:
Shai Nf showing momentum
Can a buy @ 5390 With 5382 as sl for 5410 a good trade?
GM Shai & ALL, also if possible update the BN plz?
Good Morning Shai & friends.
10169-10116-10063 for BN
Can any body throw some light on the BN level, means how to trade with the given level.
thanks,
GM Shai & folks!
ES futures yesterday went pretty close to 1089 levels.
Still 1083 is the reference level right?
GDP data coming out today:
http://www.marketwatch.com/story/gdp-data-may-quell-or-spark-double-dip-fears-2010-07-29
Musti,
You can take any view in between levels depending on your comfort levels.
But auction theory tells us that some times price moves randomly, sometimes with a purpose.
Our accounts will be well served if we identify the movements with a purpose.
Reproducing Girish's comment from the last post :
Although options data on first day of series doesn't matter much but - at least one can look at biggest OI on puts and call side to decide current market range.
http://1.bp.blogspot.com/_xQfPkpQXjMc/TFHGTu7n46I/AAAAAAAAArQ/IvwHt1g_l6c/s1600/OI_analysis.GIF
Next series Futures OI observations:
Nifty futures OI:
August series starts off with OI of 2.6Cr whereas July series began with an OI of 2.96Cr
OI deficiency this series was due to profit booking/long unwinding (21L futures contracts) seen a few days back - on 26th July - in the price range 5463-5422.
Banknifty futures OI:
August series starts off with a MONSTROUS OI 27L compared to just about 19L on first day of July series.
This to me is a bearish sign especially because most of the rollovers have come above 10000. There were at least 4 gap ups on the way up to 10000. So watch out for air pockets top POP. If a serious selling starts in Banknifty it could tank 300+ points in 1 day.
July 30, 2010 7:12 AM
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Pls refer. Bank Nifty came very close to 10200-10211 yesterday.
Girish,
1078-1083 now.
Guugu,
With the value levels, the best strategy is to play an exit of value, with a tight stop loss a few points within value or POC.
You can also take trades above or below POC, depending on the info the market provides.
Thanx Shai! I got it
Thanks Shai.
I will be watching every tick tonight!
Both Nifty and S&P charts are not that inspiring as of now.
I have entered into some longs for this series - Probably I will close all at EOD and wait till Monday - even if it means that I miss a good entry point.
Good Morning Shai and warriors
Shai i am long in Bn since wednesday at 10030 should i exit or hold
since wednesday
I missed the bus in BN yesterday cz of som personal obligationss
Today RNRL seems intresting with almost huge OI in Rs 50 Call seems like we are heading for a santa claus rally in RNRL
@Powertrade
You mean Options sellers are bent on doing a mass harakiri in RNRL. :)
Powertrade,
I will suugest a part book nearer to 10200.
Your trade is safe as long as 10116-10225 holds.
I suppose so I have taken a risk in RNRL Rs 50 Call option ... as today ADAG boeard meeting also.... Rs 1800 is a decent risk taht can be taken ... As RNRL is known for wild Movements
Thanks shai
...read as 10116-10125
Stacked day for eco data. Also end of the month, so look for some interesting action as USD hedges get taken off/put on.
For those of you trading overseas markets and forex, fx street has a nice calendar - updates automatically as the data is released.
http://www.fxstreet.com/fundamental/economic-calendar/
Hi Shai,
BankNifty last 2 candles of 30min closed below VAH-10169, Can Short now? Or what is guidance for short or buy when auctioning around VAH. If short is ok then what SL?
Bose
Daruma,
Neat link. Very global. Thank you.
I was surprised to see the ES back off from 1019, so close to that 1029 level, as much as it has done.
1078-1083 if not defended will call for a recheck.
GM Shai,Viren & All Friends....
Chandra,
Short below 10149, with day high as stop, if you have to.
Better short will be below POC.
Be quick to take profits.
Hi Shai,
Thanks
Bose
Hi POWERTRADE....ur right there with RNRL....extremely OVERSOLD & showing divergences on all timeframes.
Shai...excited about Vtrender2....should be more thrilling than Part 1 as in the case of Munnabhai 1&2 & Dhoom 1&2.
Shai i am out in BN .. would wait for some dips to buy....Thanks Again...
Sir
i m new on this blog . Any view on Bharti Airtl i have short position @316
Mkt Profile Trading Guidance
Q: Is the opening higher or lower than the previous close?
A: If the opening price is higher or lower than the close it signals a change in sentiment overnight. The greater the difference in price the more significant the change.
Q: Is the opening higher or lower than the previous day's value area?
A: This is more significant because what was considered fair value yesterday is no longer considered fair value today. It's important especially if the price has previously been balanced, for example, price has been in a narrow range and moving sideways.
Q: Did opening price match, exceed, or fail to meet the opening call level?
A: It's important to get the opening call so you know exactly how bullish or bearish the opening was, i.e., price has opened 10 ticks higher than yesterday's value area, but was due to open 20 ticks higher. The opening can be regarded as a failure on the upside if price never reaches 20 ticks higher in the first time period.
Q: Was yesterday's close at one extreme of the day's range?
A: The current day's opening determines if the previous extreme close was caused by short term traders forced to liquidate or by long-term traders entering the market. If the opening is higher, and the initial balance remains higher, this confirms the close and we can expect a trend-up day. If the price breaks above the initial balance, or support is found when the price returns to the previous day's high or value area high, this indicates an uptrend. If the open is lower than the previous close, this suggests a potential for price reversal.
Q: Was yesterday's close within its value area?
A: This suggests the market ended with the day balanced. It's important to see if there were any spikes or rejections of value as these might point the way to the next trend.
Q: Where was the highest level of volume?
A: This provides an area of support or resistance indicated only with Market Profile, an important consideration when placing stops.
Q: Where was the control point?
A: The control point is the highest volume of trade at a price, or prices, in a close range. The control point indicates fair value and aids in placing stops.
Q: Are there any zones of support and resistance on the previous day's extremes of value areas?
A: Value Area highs and lows prevent poor stop placements, but also provide low risk entry points against the short-term trend. These trades work especially well in broad sideways markets, but can also be used as profit taking points.
The following FAQs apply to the first hour after the market opens.
Q: Is the Initial Balance Range much smaller than normal?
A: If so, it is highly likely that price will break out in one direction or another, or possibly both directions. Typically, in the absence of any news event that may drive a price, a breakout is not regarded as a directional move.
Q: Has the first letter created a tail (spike) that has not been touched by the second letter?
A: This suggests the opening was regarded as unfair value and often precedes a directional trend move. It's crucial to know the opening trading range.
Q: Was yesterday a trend day, a balanced day, or a neutral test day?
A: Balanced days, where the open is near the close, have similar properties to Japanese Candlestick Dojis, and indicate potential turning points. A neutral test day occurs when price distributes in one direction outside the initial balance, then reverses and distributes in the other direction. This is often caused by news events. Generally, short-term traders are caught on the wrong side and the reverse can often be swift and violent. Neutral test days indicate nervousness and a possible change in trend and can be compared to key and hook reversals, as well as Japanese Candlestick engulfing patterns.
Trading Methods For Market Profile
Only trade in the direction of the trend (Trend is determined by a rising or falling Point Of Control/POC)
Trade setup #1a: In a down trending market, when the current session opens below the previous day’s Value Area/VA enter a short trade at the previous day’s lower VA and again at the previous day’s POC/HVL placing a protective stop for both trades 1.5 points above the previous day’s upper VA.
Trade setup #1b: In an up trending market, when the current session opens above the previous day’s VA enter a long trade at the previous day’s upper VA and again at the previous day’s POC/HVL placing a protective stop for both trades 1.5 points below the previous day’s lower VA
Trade setup #2a: In a down trending market, when the current session opens within the previous VA enter a short trade at the upper VA placing a stop 1.5 points above the Day Before Yesterday’s/DBY POC or High Volume Level/HVL (the open price must be at least 2 points below the previous days upper VA)
Trade setup #2b: In an up trending market, when the current session opens within the previous days VA enter a long trade at the lower VA placing a stop 1.5 points below the DBY’s POC/HVL (the open price must be at least 2 points above the previous days lower VA)
Trade setup #3a: In a down trending market, when the current session opens above the previous days upper VA and below the DBY’s lower VA enter a short trade at the DBY’s lower VA and again at the DBY’s HVL placing a stop for both trades 1.5 points above the DBY’s upper VA (if stopped out on this setup and price remains above the stop level, change directional bias for all category 2 trade setups for the remainder of the day)
Trade setup #3b: In an up trending market, when the current session opens below the previous days lower VA and above the DBY’s upper VA enter a long trade at the DBY’s upper VA and again at the DBY’s HVL placing a stop for both trades 1.5 points below the DBY’s lower VA (if stopped out on this setup and price remains below the stop level, change directional bias for all category 2 trade setups for the
remainder of the day)
Trade setup #4a: In a down trending market, when the current session opens above the DBY’s lower VA and below the DBY’s POC enter a short trade at the DBY’s POC and again at the DBY’s upper VA placing a stop 1.5 points abve the DBY’s High Of the Day/HOD (if stopped out on this setup and price remains above the stop level, change directional bias for all category 2 trade setups for the remainder of the day)
Trade setup #4b: In an up trending market, when the current session opens below the DBY’s upper VA and above the DBY’s POC enter a long trade at the DBY’s POC and again at the DBY’s lower VA placing a stop 1.5 points below the DBY’s Low Of the Day/LOD (if stopped out on this setup and price remains below the stop level, change directional bias for all category 2 trade setups for the remainder of the day)
Profit targets for all trades should be in consideration of the risk of each respective trade and should be placed in consideration of the previous days POC, VA or HVL
(Category 2)
Trading Methods For Market Profile
Category 2 trades are based off the current sessions VA, HVL and POC with profit targets of approximately 2 points (they will generally setup after steps 1 and 2 have occurred in the market profile’s development)
When a Category 2 trade’s entrance level matches up with a previous days HVL It is referred to as a Category 2+ trade (category 2+ trades are generally good for 3 or more points)
Step 1 being vertical movement of price and step 2 being the capping of step 1
Step 1 will generally takes place during the Initial Balance/IB period of the day (the first 60 minutes) Step 2 often occurs during the IB period as well
Step 3 is when the market begins to move more in a horizontal direction than vertical direction and the bell curve begins to take shape
Step 4 is when the bell curve is becoming fully developed and its POC tries to drift towards the center of the IB, if it is not already in the center (occasionally steps 3 or 4 do not fully develop and the market enters step 1 again, this is known as minus development)
Minus development is very helpful in showing the direction of the market.
SHAI Bn again a buy .... It seems tooking to the 5 day chart
Thank you Pawan for those notes.
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I must add that market profile is a very discretionary approach to trading.Within the implementation of rules, should lie your ability to read the market action, identify who is in control and recognize when this control changes.
shai and all
hi..
5385 spot in???
@Pawan Jangid
Thank you very much for the notes. It will be helpful for more and clear understanding if you could take an example of say, Nifty, and explain during the weekend pls. It is a request.
Regards,
Veer
Can we look to short below 5385?
guggu,
I went in a meeting, could not respond to you.
Hope you did well.
@ All,
I've not been in a position to contribute today, have been busy putting up a few things together for Vtrender 2.
Watch this space for the announcement tomorrow.
Nope I did nothing
Bye Shai & friends, have a great weekend!
bye shai and all ....
Last Week's Observation:Buy BPCL @ 635 T1=645 T2=650 both targets achieved within 3-5 days.SL given for last friday not touched though it is activated on monday...could have reentered @ 635 again....working on better SL policy.
Today Bought RNRL @ 42 SPOT as per POWERGRADE'S observations for 10-15 days.SL & Targets not calculated yet.
Shai.....waiting for.....Part 222222222222222.
See you all next friday.
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