Rajandran R Creator of OpenAlgo - OpenSource Algo Trading framework for Indian Traders. Telecom Engineer turned Full-time Derivative Trader. Mostly Trading Nifty, Banknifty, High Liquid Stock Derivatives. Trading the Markets Since 2006 onwards. Using Market Profile and Orderflow for more than a decade. Designed and published 100+ open source trading systems on various trading tools. Strongly believe that market understanding and robust trading frameworks are the key to the trading success. Building Algo Platforms, Writing about Markets, Trading System Design, Market Sentiment, Trading Softwares & Trading Nuances since 2007 onwards. Author of Marketcalls.in

Nifty June 2016 Trend Overview – Top Down Approach

1 min read

If you are trading any charts to get a clear view about the trend it is good to start with Dalton’s Top Down Approach. In the top down approach we will start the day by looking into the monthly, weekly and then daily to understand the overall state of the trend. From top down approach one can understand the state of long term trend, intermediate trend, short term trend and gives you a fair perspective about the market rather than doing a bottom down approach. Lets understand the state of trend with Nifty Spot Charts and the sentiment associated with it.

Nifty Monthly Charts

Monthly

Monthly timeframe tracks the state of long term trend. Nifty Spot on the monthly charts is on one timeframing mode i.e in the last 4 month nifty is consecutively making higher high and higher low so far. It should be noted that previously nifty spot is in downtrending one timeframe mode for almost 6 months till Feb 2016 followed by a strong trend reversal on the monthly charts.

The Current One timeframing setup is quite alarming and doubts the continuation of the up-trend and the current uptrend could be limited/capped. Potentially we could balance in a larger range. Sentimental indicators are holding positive so far.

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Nifty Weekly Charts

Weekly

On the Weekly timeframe nifty spot had a nice clean breakout from the previous 5 weeks of consolidating and downtrending range. Weekly timeframe monitors the state of intermediate trend. Current intermediate trend is clearly up and no weakness is visible at this point. Trading Sentiment turned positive very recently.

Nifty Daily Charts
Daily

Daily timeframe tracks the state of short term trend. On the Daily timeframe we are in the consolidating phase. Markets are in sideways (8150-8250) range for the last four trading session. Sentiment is holding positive. Recent rally had left three gaps in Nifty Spot charts 7769.5, 7949.5 & 8074.65.

Overall comparing all the timeframes we can conclude that all the timeframes are showing positive sentiment but high possibilities of limited upside from here on. Last four months of continous uptrend would have eliminated all the fears from the market and the Indian VIX is trading below 16 handle. From short-term investing perspective, stock selection from Nifty 50 pack is not going to be a easier task from here on. And this month could be one of the boring month ever from trading perspective and you can expect lots of whipsaws if you are a trend follower. Bullishness remains in the market but overall market would do possibly nothing!

What do you think? Sell in June and Go Away?

Rajandran R Creator of OpenAlgo - OpenSource Algo Trading framework for Indian Traders. Telecom Engineer turned Full-time Derivative Trader. Mostly Trading Nifty, Banknifty, High Liquid Stock Derivatives. Trading the Markets Since 2006 onwards. Using Market Profile and Orderflow for more than a decade. Designed and published 100+ open source trading systems on various trading tools. Strongly believe that market understanding and robust trading frameworks are the key to the trading success. Building Algo Platforms, Writing about Markets, Trading System Design, Market Sentiment, Trading Softwares & Trading Nuances since 2007 onwards. Author of Marketcalls.in

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