Thursday, August 22, 2013

Fresh short build up or selling climax in Nifty ?

Fresh short build up or selling climax in Nifty ?

Trade in Nifty futures as per these levels

Buy at / above: 5274   Targets: 5289 – 5308 – 5326 – 5344
Stoploss : 5256
Sell at / below: 5256   Targets: 5240 – 5222 – 5204 – 5186
Stoploss : 5274

Addition of 34 44  800 shares in open interest with fall of 100 points seems that fall is supported by fresh short positions ….if it is true nifty will see 5k soon ..but if it is deception or selling climax  then sharp reversal can not be ruled out ..see OI increase is highest in this series .even on expiry day oi increase was 32 95 900 .


Definition of ‘Climax’

A market condition that is characterized by very high trading volume and a dramatic downward or upward movement in price. High volume and downward price movement indicate a selling climax, while high volume and upward price movement indicate a buying climax. Either type of climax signals the end of a trend.

Investopedia Says

Investopedia explains ‘Climax’

Selling into a climax run can be a good exit strategy, because by selling during a period of euphoria, investors can lock in dramatic gains. A buying climax can bid a stock’s price up to levels it will never reach again, or that it will not reach again for at least a decade. At the end of a buying climax, prices can fall sharply as investors realize the stock has been overbought.

Writing about “The Selling Climax” in Technical Analysis Of Stock Trends, authors Robert Edwards and John Magee observe that:

Most true Selling Climaxes, if not all, have been produced by distress selling … They have come at the end of rapid and comprehensive declines which exhausted the margin reserves of many speculators and necessitated the dumping of their shares at whatever the market would bring. This process is progressive — feeding upon itself, so to speak — with each wave of forced sales jeopardizing another lot of margined accounts, until at last millions of shares are tossed overboard, willy-nilly, in a final cleanup.

Bad? Good? Indifferent? For Edwards and Magee, it depends on where you stand as a trader.

Such is a Selling Climax in which the total turnover may exceed any single day’s volume during the previous upswing. It is a harvest time for traders who, having avoided the bullish infection at the top of the market, have funds in reserve to pick up stocks available at panic prices.


22 Aug 13, 07:20 AM

[×] [o] Admin: Scores Killed in Syria, With Signs of Chemical War—Middle East – more blow

22 Aug 13, 07:25 AM

[×] [o] Admin: Dow closed at 14897.55 below 105 .44 or 0.70 %

22 Aug 13, 07:31 AM

[×] [o] Admin: Asian markets are trading between 0.2 to 1.2%- possible intraday recovery can not be ruled out – negative news flow inducing fear and panic in markets

22 Aug 13, 07:50 AM

[×] [o] Admin: expecting flat to slightly negative opening with possibility of extremely volatile session ahead may close above 5350 …market will be weak only if move below 5260 with volumes and that will be there only if more negativity will be spread .

22 Aug 13, 07:55 AM

[×] [o] Admin: positive newwwwwwwwwwws—–Asian shares pared earlier steep declines on Thursday after activity in China’s manufacturing sector hit a four-month high in August. Japan’s benchmark Nikkei index neared 13,400 points, Australia’s S&P ASX 200 moved off its two-week low, South Korea’s Kospi rose above its one-month low and the Shanghai Composite reversed losses.

22 Aug 13, 08:01 AM

[×] [o] Admin: Shanghai 0.2% higher China’s benchmark index reversed early losses to enter positive territory as investors cheered the latest PMI figure. Nikkei flat Japan’s benchmark index also erased losses to cross 13,400 points after losing as much as 1.4 percent earlier in the session thanks to a weaker currency.

22 Aug 13, 08:33 AM

[×] [o] KRISHNA: Good morningg :D

22 Aug 13, 08:34 AM

[×] [o] Admin: gm krishna

22 Aug 13, 08:43 AM

[×] [o] renu: gmmmmmmmmmmmm

22 Aug 13, 08:44 AM

[×] [o] Admin: gm renuji

22 Aug 13, 08:44 AM

[×] [o] Admin: ur view on market pls

22 Aug 13, 08:44 AM

[×] [o] KRISHNA: Good morning sis :)

22 Aug 13, 08:45 AM

[×] [o] renu: bank nifty comp bottomed out,,,,,,,,,,,, i odnt see more correction,,, for the last lows

22 Aug 13, 08:46 AM

[×] [o] Admin: u dont see correction

22 Aug 13, 08:48 AM

[×] [o] renu: noooo,,… but,, unless BUY signal genertaes due to pos vol,. nly invetsors shld enter

22 Aug 13, 08:51 AM

[×] [o] Admin: so you are seeing consolidation here at 5250 or reversal ?

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Fresh short build up or selling climax in Nifty ?

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