September 10, 2010

  • Breakout from Ascending triangle looks strong.
  • S&P 500 Futures Hour chart is showing an Ascending Triangle in its hourly time frame.
  • Break of this one can give good direction. Ascending triangles normally breaks on the upside. But that rule has been violated many times. So we can expect an upside or a downside breakout.
  • Start entering after a breakout or breakdown for small profits. Small profits because of the small time frame, This being an hourly time frame chances of whipsaws are higher too.
  • Dow Jones futures daily chart is in a triangle pattern. and trading near the resistance line.
  • The stochastic indicator for daily chart is approaching oversold region. One main thing to note is if you plot the stochastic indicator for daily time frame in dow jones futures chart, after the low of 9504 the indicator has gone to the oversold region main times but the index never went to the 9504 levels, this shows the presence of some positive divergence. 
  • So according to the above observation two things are possible, Price makes another higher low from here close to the supporting line of the triangle and then a reversal from there resulting in a breakout from this triangle OR a breakout from here itself. Since it is a triangle a breakdown of the triangle is also possible.
  • It can bee seen from the 2nd chart clearly the importance of 10360 level . Price has come to this level and has given good direction from this level.
  • The first chart shows the index trading around 61.8% retrace levels.
  • From this level price may give good direction soon.
  • Nifty weekly chart showing a clear breakout above the channel.
  • One can remain long above the channel. 
  • Stop losses can be kept at 5550 or 5530 for positional traders.
  • The candle looks like a shooting star formation. But the gap between the previous and the current candle is not prominent.
  • The index got resisted at 80% retrace levels. If it manages to go above 80% we can expect S&P 500 to retrace 100%.


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My Favourite Quote

"All through time, people have basically acted and reacted the same way in the market as a result of: greed, fear, ignorance, and hope. That is why the numerical formations and patterns recur on a constant basis."
—Jesse Livermore