Sunday, August 5, 2012

Nifty reverses and closes above 5200

Friday(3-8-12) Nifty opened at 5196 with a loss of 32 points, moved down to 5165, moved up to 5220 and closed at 5216 with a loss of 12 points. Nifty futures open & low was at 5100 which is a freak trade. Mini Nifty futures(used in the table) range was 5177 - 5247, having a difference of 70 points. Tomorrow's Agni level is at 5289 and Nifty may move towards that figure.
A study regarding the relation of Agni level with Nifty was done using the table given below and the intra-day movements of Nifty to answer a query in comments column. Out of 29 days where the difference between Agni level and Nifty was more than 120 points Nifty reversed in 11 days only. So, the answer given is quoted below for the benefits of all.
"If the difference between Agni level and Nifty is more than 120 points, chances for taking a reverse position exits provided a)that level is achieved before 12:00 noon b) Nifty reverses more than 20 points. On 27th,30th July and on 3rd August chances were there."


Atharva said...

Dear Sir,

Thanking you for your reply. Honestly I did not understand it..

Will you please help me to understand it better with e.g. of 3rd July.On 3rd when NF opened it was not 120 pts less than agni level. So we should have waited for it drop below 120 pts. i.e. 5193 NS..and should have taken long once it crosses 5313-120 = 5193 after making low of 5164.65

Since it has happened only 11 times out of 29 during last 7 months;do you suggest not to initiate these trades...
Also my query was if agni level is broken during intra day, how to manage the trade. It is broken on intra day basis but EOD basis earlier trend has resumed.

Looking forward to your valued comment

Nandi said...
This comment has been removed by the author.
Nandi said...

Dear Atharva,
Believe you intended 3rd August and not 3rd July. Please not that one cannot go long just because difference between Agni level and Nifty is 120 points. That's why two conditions added to it a) 120 points must exceed by 12.00 noon - it was satisfied at 11.30 b)Nifty must reverse 20 points - when Nifty reversed above 5185 after reaching 5165 satisfies second condition. Then only one can go long on that day. First do some paper trades and be confident yourself before doing these type of trades with close stop losses. Do not involve in any trade with out full confidence, otherwise you will be at the loosing end only.

Regarding Agni level breaking - please reverse your position when ever Nifty crosses Agni level without waiting for EOD ie. intra-day. However, now a days we are facing gap-up or gap-down opening on which we retail traders in India can do nothing. But, FII's can exit and reverse their positions in Sgx Nifty and reduce their losses. We are at receiving end only now.
Hope your doubts are cleared.

Atharva said...

Dear Nandi,

Thanking you ..Now it is very much clear to me..

Coming back to movement around
Agni level..Toady we went below 5287 and currently trading @ how do we initiate trade?

You have suggested to open up the trade moment it crosses agni level..

If I take short based on todays agni level of 5287; what should be sl and how to manage these trades.

Thanking you once again,

Warm Regards,

Nandi said...

Dear Atharva,
Please consider that Agni level is having a width of 16 points and the centre of which is 5287 today. As such action can be taken when Nifty moves above 5287 + 8 = 5295 or 5287 - 8 = 5279 ie. 5295 and above long and 5279 and below short. So, 5279 is SL for longs and 5295 is for shorts. Please also note that gain in trading comes only we have luck on that day, otherwise Nifty will reverse after hitting our SL. Wish you best of luck.

Atharva said...

Dear Nandi,

Thanks for guiding on this..

You have revealed a complete trading system ..

Now it is crystal clear to me

Thanking you once again

Best Reagrds