Strong trend ….should we believe?

Daily chart of NIFTY closed up turning bullish within the broad range. Present range is 5150-4950, 200 points of maneuvering space in between to oscillate with. Daily chart is not in trend, price is coiling between EMA's, which is not a good sign for trend followers, while return to mean trading systems get a fairly good opportunity. It is left to the type of trading signals they use; it should be prudent enough to catch the bottom and tops for reversal. The market at present does not have small ranges when it turns around. So, the gains are likely to be very low and risk/reward not favorable on any trades.

With both Weekly and Daily in non-trend, no trades in the daily chart are likely to give any profits. The same goes with daily/hourly. Hourly is opening out and is likely to go into trend very soon. Will it break the 5150 resistance? As of today's closing there is tremendous strength, but sideways market loose all their charm when they hang behind the Dow, FTSE, CAC, DAX etc., The probabilities are high, reality is to be seen in the next session. On the hourly chart 35 stocks from the NIFTY component list are in strong trend, this is an indicator that the index will open out to trendiness.

At present we are running a Trend long position on the hourly chart which got filled at 5034 with a stop of 4970 on futures. Spot/ future difference turning to premium was an added advantage to this trade and the markets too. Trend traders hold on to your longs till further directions come from the charts.

As we are writing have the US markets having a fantastic bout on their exchanges. Above 2% gains on all the indices are seen and all are gaining strength too. WE trade the charts as they pan out, there are bound to be losing trades with any system, the same we have kept as an open book for every one to witness here. We have run a streak of losing trade just recently and the running long trade too has open profits, we do not know where it will close. But disciplined approach to the markets pays handsome rewards in the long run. It is a real life experience.