May 6, 2014

CRUDE Oil descending Triangle and 200 SMA

  • Crude oil 4 hour chart shows a descending triangle pattern.
  • Price staying below the 4 hour cloud will favor bears of Crude oil.
  • Bulls has a bigger support in 200 Day SMA. Only a daily close below 200 SMA will give good results for the Descending triangle pattern.

Bank of America chart update

  • Bac weekly chart testing the crucial 23.6% Fib level. Weekly close below this level will extend the fall for bank of america.
  • Previous resistance level is trying to act as support. Bulls need a big up move from this level to avoid bigger correction.
  • Price sustaining below 200 SMA will continue to support bears of BAC.

ES in a range

  • ES one hour chart shows price in a range.
  • Candlestick chart shows false violations outside the range. An hourly close outside the range may give bigger moves.
  • 4 Hour chart shows cloud acting as strong support level. Bigger fall on breaking below the cloud.

NIFTY Midcap 50 Index analysis and thoughts on trading the election results

  • I received many mails to look at stocks and How they are positioned just before the election results are announced, So for a change i thought of analyzing the Mid Cap 50 Index.
  • First chart shows price staying above a crucial resistance zone. But the next chart shows Big Negative Divergence in Weekly chart. So for those who want to play the election results i would like to say that we are in a no where kind of level. For a trend watcher we are in an up trend so he may hold on with his longs But the Divergence also looks Good for a short trade. 
  • Since i am trying to make money from the markets playing such an event may wipe off my capital substantially by 10 to 15% so i would wait for the next day for a better opportunity.
  • One may also look at the option Premiums in Nifty and Bank Nifty they are too expensive to buy. Many wanting to play by buying both puts and calls or a straddle. For those who want to buy straddles the premium should be low,  This is an option writers market, They will not let the market move too much, with such high premium even a 300 - 400 point move in nifty is unlikely to give much profit for the straddle buyer. On the contrary its the options sellers who are likely to get greater profits this time. 
  • So for option buyers they should take a risk with buying a naked call or a put. Straddle is unlikely to give big profits. Or one has to wait till the announcement day to see if the option premiums become low to buy a straddle.