Rajandran R Founder of Marketcalls and Co-Founder Algomojo. Full-Time Derivative Trader. Expert in Designing Trading Systems (Amibroker, Ninjatrader, Metatrader, Python, Pinescript). Trading the markets since 2006. Mentoring Traders on Trading System Designing, Market Profile, Orderflow and Trade Automation.

Nifty, Nifty Constituents and Escape Velocity

2 min read

Nifty : CMP 4327.47

 
Nifty Did it. Ya it takes nearly 24 trading sessions to make the candlestick to close exactly
well below 20 day EMA(4385) but this time nifty closed with a little positive note. In my
perspective A candlestick to close below 20 day EMA and remain closed well below 20 day
EMA will definitely invoke a short term downtrend in case of nifty. But As Usual nifty trying to
confusing traders and investors with its little boost.
 


 

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In Physics there is a concept called Escape Velocity , It is commonly described as the speed
needed to "break free" from a gravitational field.If an object attains escape velocity, but is not
directed straight away from the planet, then it will follow a curved path. This is the concept used
in rockets to make it free from gravitational Field and to revolve around the orbit. And Now in
case of nifty the gravitational pull is downwards as its closed below 20 day EMA.
 
Currently nifty is facing a downward gravitational force(remember if a ball thrown upwards 
then the ball will take a curve path and fell down because of gravitatinal force. And it
will falls to the ground due to lack of Escape velovity).So nifty now needs an escape velocity
that is a force which needs to keep nifty above 4327 forever. The predicted nifty escape velocity is
4385 ie (>20 day EMA) to put nifty once again in its orbit. In any case if nifty closes below 4385
then once again nifty is poised to the gravitational pull and the acceleration is going to be strong
further to reach its ground soon.
 
In Simple terms Market has to remain close above 4385 by tommorow. Some of the stocks that
can offer the escape velocity to nifty :
 
 
Top Gears in Nifty:
 
RANBAXY,RELIANCE,BHEL,INFY,HDFC,ONGC: Still these counters are not giving up as its candle are
still manage to stay above 20 day EMA. Strong Escape Velocity may come up from these counter.
And Ranbaxy,HDFC,BHEL looks the most bullish among them. And Remember ranbaxy already
achieves its escape velocity(>20 day EMA).
 
Slow Gears in Nifty
 
SBI,ICICI Larsen & Tourbo, DLF : Situation is exactly the same as of Nifty. Candles closed well below
20day EMA. If these counters closed positive on coming monday(25th, Aug,2008) then chance of
formation of bullish morning star – a bullish trend revesal pattern. So a positive close in these
counter can offer further escape velocity to nifty. In case of SBI almost a DOJI symbol is formed
so any positive close will bring a trend reversal – Bullish morning doji pattern in this counter.
 
Dead and Broken Gears in Nifty
 
ACC,RCOM,TATA STEEL : Tradning well below 20day EMA for couple of days and considered to be
the weakest stocks among the nifty constituents.
 
Conclusion
 
Almost all the stocks in the nifty are well below the oversold in term of stocastic Indicator, showing
a sparking positive momentum. This spark may be enough to keep the nifty rocket to moving into its
orbit once again. Just hope for the spark to give some escape velocity to the nifty rocket.

Regards,
Rajandran
Author – Marketcalls

Rajandran R Founder of Marketcalls and Co-Founder Algomojo. Full-Time Derivative Trader. Expert in Designing Trading Systems (Amibroker, Ninjatrader, Metatrader, Python, Pinescript). Trading the markets since 2006. Mentoring Traders on Trading System Designing, Market Profile, Orderflow and Trade Automation.

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