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Stocks

4% Down: Worst Day In Two Years

We’ve had a 4% down day on the NSE, with a graph that started ugly and looks uglier:

image

This is the biggest one day fall in two years – since 17 Aug 2009.

The longer term chart of the Nifty sees that we’re in some kind of mid-range:

image

There are two gaps, one around the 5200 level and another created today. if 4900 holds, I expect to see the upper gaps close – the position there is to buy October calls at the 5100 level. If 4900 breaks, it looks ominous and will likely approach the 4780 support (I’d like to work that through futures, not puts).

Sectors – Realty was hurt the most:

Sectors

I don’t like intraday trading but much of my stops and profits are getting booked on an intraday basis. These are trend days – days I identify by the fact that they break away from “mean reversion”. As we opened gap down, I would have expected the gap to close in the first hour – when it didn’t, it was time to go short. (I’m not saying this in hindsight: I did go short in the first hour)

The discipline is finally setting in. I’m respecting stops. I’m working the trends. I’m ignoring the desire to trade when there is no trend. Need it to stay that way.

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