February plays again.

The daily chart of NIFTY mirrors the February pattern again. In February it was quite a prolonged trend, but now it is fairly short. Market has turned bullish without any bullish divergence. Then the uptrend gave a strong 400 point move, but will the same repeat again? The probabilities are lesser because the weekly charts have a very strong bearish divergence on all the indicators and along with that; the prolonged indecisive movement of the market has rendered the weekly into non-trending zone. Any market when it is non-trending will coil the averages. Daily charts will likely hit resistance at 5185 levels.

For today the daily chart turns to long trades above today's high, this is only if the high is taken off. On the other side if it does not breach today's high, short trade will continue. A similar move came on 31^st May 2010. The number of stocks of the NIFTY component list strongly bullish today is 29, while the strongly bearish stocks are just 1 and the remaining in the neutral zone. 58% of the NIFTY components are bullish, gives a clear picture that the bullishness has quite good strength. This is according to today's chart patterns and readings. The immediate next session can change the scenario totally upside down.

As we write we are watching the US markets turning flat after a good take off, though it is too early to take decision of the US market now, we have just included this for the case of study. So, if you are going to trade your system with full trust, then you need to reverse the short position above today's high to long trade. The prevailing short trade will close with a small 85 points profit after having a peak of 400+ points gain, the same happened in February and it is a miracle that even then it was only 85 points profit. The only difference is that, in February swing traders got a chance to short and had also made some good gains while this time swing did not get any opportunity.

Hourly charts got filled into long position in the trend system on a gapped opening and has closed positive, while swing traders are waiting on the sidelines for their chance till the index retraces to value zone. The value zone on closing market price is at 5072, we expect the market to retrace to these levels in the next session and give an entry in swing trade. There are possibilities of a straight fall or a continued uptrend without reaching value zone, all are probabilities while we assume the most repeated pattern can happen.

Trend traders holding long from today's opening can continue holding their position till a reversal signal comes in. At present trend trades are not giving good results does not mean that it is not a worthy system. The present market is not having prolonged trendiness and hence we have smaller profits on the trend positions and large gains on the swing trades. If the market is in a strong like it was in the past year, the equation will tilt in favor of trend trades. So, having trades on both the systems will give an added edge to gain on both types of markets. With this we reveal a plain secret of position sizing & money management, we do not say that this is the ultimate, but this is also a secure way to trade in the markets.