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  • CNX IT: The Start Of A Tradable Uptrend

    It is observed that a H&S pattern that does not have a sharp right shoulder is likely to be unreliable. In other words, it is unsafe to short a H&S without an acute last bounce.

    The CNX IT is a recent example. What was more striking, was that volumes seemed to contract with falling index values, and expand whenever the index rose. The message was to avoid shorting.

    (click to enlarge)

    The pattern that seems to have formed is some sort of downward-sloping wedge. That is usually a bullish sign. In this case, the target is about 7400.

    (click to enlarge)

    The April future shows a downward sloping channel. Two hammers are seen. That is a sign of trend change. Its possible that we have a buy signal by the end of the next trading day.

    More at my trading blog

    Mar 31 10:01 AM | Link | Comment!
  • Trend Change Likely In The ASX 200

    The ASX 200 is a capitalization-weighted index of the top 200 Australian companies. The index futures of the ASX 200 are traded on the Australian Securities Exchange.

    (click to enlarge)

    The ASX 200 has been in an uptrend since the middle of November and had climbed over 720 points.

    The current consolidation has retraced just under a third of the previous move. Further, a small head-and-shoulders pattern has appeared in the last two weeks.

    A resumption of the previous uptrend is unlikely. The prices will have to go over 5165 before such resumption could be said to have taken place. Even so, a short move up cannot be ruled out. This uptrend should not be bought into.

    It is not yet time to go short. But its definitely the time to liquidate all longs. The index future to be traded is the one expiring in June 2013.

    (click to enlarge)

    Trading decisions will be at my trading blog.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Mar 20 10:02 PM | Link | Comment!
  • CNX IT: Time To Book Profits

    The CNX IT index has risen along an almost parabolic arc. It is now time to exit. The risks to the downside exceed the potential to the upside.

    (click to enlarge)

    The March future of the CNX IT has achieved its target following the breakout from a flag. This confirms the call to close the long position.

    (click to enlarge)

    It is possible that there is an upside from here. The stoploss would have to be placed below the ATR. But exiting at this level will make it a relaxed trade.

    More details at my trading blog

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Mar 10 3:24 AM | Link | Comment!
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