Going Short on Google & Facebook - Bearish Alignment

Hourly charts of Google and Facebook show how the bearish alignment of trends can be used to reap rich dividends. In the following charts, the daily hourly and 15 minute trend momentum have synchronised  bearish alignment, with the trigger line giving the sell entry signal.

Synchronized Bullish Alignment = Super Profits

A trader would normally focus on a single timeframe and take positions accordingly. However, the price plays a tug of war with the pulls and pushes of the three time frames. The resultant force would determine the quality of a trend.

In our  research paper Triple Trend Oscillator - Technical Insights we talked about synchronized bullish alignment of major, intermediate and minor trends.   An alignment of trends in the three time frames can result in a major impulse move in a relatively short period of time. High leveraged and safe trading positions can be created if the exact timing of such a move can be identified. 

The main requirement for such an impulse would be :

1. All the three trend i.e. major, intermediate and minor should be placed above the zero line.
2. The three tends should be bullish i.e. rising.
3. The minor trend should be placed above the intermediate trend and the intermediate trend should be placed above the major trend.
4. The trigger line should have crossed zero to generate a buy signal.

In the following hourly charts with TTO, the bullish alignment satisfying the above conditions is clearly visible with the resultant quick price movement.

A New Bull Market !!

Nifty has conclusively broken the multiple resistance  at 6350 levels and has continued to close above that levels on daily and weekly charts. With the  monthly closing also likely above that levels, it seems Nifty has finally entered the new bull phase and the current rally may be considered as the first wave up with its five sub-waves with target of 6700-50. Post which, a correction is likely and Nifty may come back to test 6350 levels. Nifty now has a long term target of 10,000 in the next few years.

Can TTO predict directional breakout ??

Bollinger Band  squeeze indicates an impending breakout move but the direction remains uncertain. Sometimes there are false breakouts, to be followed by a reversal and a powerful  move in the opposite direction.

With TTO it is possible to anticipate the direction of the breakout move as can be see in the daily chart of YESBANK  below. The hourly trend line moves above the daily trend much before the breakout and continues to hover above it. The trigger line which mimics the extreme short trend, instead of correcting further, begins to move up and thus translating the strength to the hourly trend which now crosses the zero line.

TTO & TRIX

CNX Nifty hourly chart plotting TTO and TRIX.  Multiple trend information can allow the trader to take a more confident trading position. The visible strength of the major trend may be used to add trending positions.

INFY Pullback

INFY attempting a pullback  as can be seen from the trend transition taking place in the chart below. The target is any body's guess......

Nifty in Consolidation Mode

Nifty remains in sideways consolidation mode, before the next upmove. The major trend remains in strong uptrend. However, a retest of  6435 or below cannot be ruled out before the next upmove begins.

INFY Fall - Didn't TTO foresee it ??

We discussed the top and reversal of INFY in the post YESTERDAY ....
http://eqtrend.blogspot.in/2014/03/how-infy-top-and-reversal-was-detected.html

How INFY top and reversal was detected ??

INFY and technology stocks had a good month long run before they ran out of steam and other index stocks took over to lead NIFTY.

The top and reversal could be easily established on the hourly charts with TTO as shown below. The hourly trend started falling below the daily trend, even as the stock was retesting  new highs, giving a clear signal of impending reversal.

The 15 minute trend continued to show weakness as it failed to pull itself up above the hourly trend. This provided a clear exit signal at 3840 levels. Earlier, the 15 minute trend had started rising above the hourly trend indicating a buy.

Even the daily charts suggested sell as indicated by the trigger line crossover. The buy was indicated at 3580. Once the stock touched 3760, the indicator was showing continuous loss of momentum.

What is Triple Trend Oscillator (TTO)??

The Triple Trend Oscillator (TTO) is a trend following oscillator devised to identify the exact technical strength of a stock or indices over multiple timeframes and can also be used as a trend and momentum indicator.

Like many other technical indicators, TTO oscillates around a zero line but with a difference. It incorporates trend oscillators which mimic the trend momentum across three timeframes, plotting them simultaneously, thus giving an overall view of the trend position. Thus it provides a better indication of trend strength which is not possible when trends are viewed in isolation. As indicated by TTO, a stock would be extreme bullish when all the three trends lines are above zero and extreme bearish when they are below zero.

For more details, click here .....

http://eqtrend.blogspot.in/p/what-is-triple-trend-oscillator-tto.html

Modi Wave or A New Bull Market ??

Nifty has surged  this week, when no one expected it to, trending at ferocious velocity. The trending move started right from 6100 levels after it consolidated between 6000-6100 and crossed the crucial multiple resistance at 6350 closing at a new all time high. Those who positioned themselves early have gained tremendously from this move within a short period.

 The monthly charts paint a very bullish picture for Nifty as it crossed the resistance line with increasing volumes. Having crossed the multiple resistance at 6250-6400 Nifty has set lofty targets for itself for the medium and long term, if the support zone of 6250-6400 is maintained. In any case, Nifty has found itself a new higher base at 6000 and the downside looks limited to 6000 for now.

 The question in every ones's mind is- Are we in a bull market?? Or is this the Modi wave ??

 As of now Nifty has shown breakout, and conditions are similar to what they were in 2004 when the previous bull market started. The geo-political situation looks encouraging, investors are skeptical  and FII's are compelling themselves to find new reasons to invest in India. Nifty is all set to touch 10,000 in the next couple of years.

 Its a matter of time before everyone jumps the wagon !!

 A word of caution- The Third Front is rearing its head with every leader worth his name having prime ministerial ambitions. Though they all are suggesting each others's name, in their heart, hope to sit on the chair themselves some day. In the  event the election results throwing a surprise, Congress would not mind supporting the Third Front and spoil the party. If that happens, GOD save INDIA...

Trending Nifty

Positioning yourself early in a trade has its obvious advantages. One of the challenges is the leg effect in moving averages and several indicators like MACD.

The trigger line (the black dotted line) in TTO is a critical lead indicator for an early positioning in a trade. As the trend change flows from a lower time frame to a higher time frame, taking a position based on the trigger line crossover can make a big difference in the trade profitability plus it keeps you on the right side of the overall trend.

For an exit, wait for the next crossover in the opposite direction to book profit instead of using a trailing stop.

The strong trending moves in Nifty continues, as we wait for an exit signal for long trade entered at 6239.

Dow Jones Hourly Trend

Dow Jones with negative divergence looking at trend reversal...

Trade F&O using TTO

High leveraged trades in F&O can be tricky. Stop losses can be used for risk management but a few stop loss triggers can take away a substantial part of your capital. What is important is the entries are timed precisely and once an entry is made, ride on the position till exit.

Equally important is the stock selection which can give the best trending position. Using TTO one can analyse the long term trend and take position in a shorter time frame with a precision entry using a minor trend, all this information available on the same  indicator.

Notice how the thin black line zero crossover can be used to make precise entry in the direction of a larger trend. Even if you miss the first entry or are not confident, one can always use the second crossover for a good directional trade.

Triple Trend Oscillator for Intra-day & Positional Trade

Triple Trend Oscillator (TTO) can be effectively used for intra-day and positional trade in F&O as the underlying trends can be  used to take a safe trade position, whether long or short.