Friday, December 7, 2012

Trading Nifty using Bollinger Bands® & Elliott wave

Trading Nifty using Bollinger Bands & Elliott wave

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Bollinger Bands work very precisely during corrections and Elliott wave helps us to understand when it is better to apply this technique for getting high probable trade setups.
The following was published in yesterday morning report. When Nifty was touching 5840 level in a steep fall many would have created short positions or would have exited their long positions. But our readers were aware about the crucial level of 5840 on closing basis. The below excerpt explains it all….
Nifty 60 mins chart:
Wave Analysis:
We mentioned in previous update, “There can be a possible Gap up opening today as LokSabha approves FDI in retail. It will be now important to see if market manages to sustain into positive territory throughout the day. Existing long positions can now trail their stops to 5840 level on closing basis which is the lower end of the Bollinger Bands and is also the low made on 3rd December 2012.  Conservative traders can use 5790 as stop loss level for their long positions. In short, expect range bound movement to continue as long as 5850 is intact on downside and 5950 is intact on upside.”
We have been very precise in capturing the short term to medium term movement on Nifty. Nifty had a Gap up opening as expected but failed to sustain there and turned lower. As mentioned in previous report we advised our readers to keep 5840 as stop loss on closing basis and Nifty made a low of 5839 and reversed from there. Also when markets have been making low in wave 4 near 5550 we have been talking about 5950 levels. The high made by Nifty was 5943 yesterday. From trading perspective the initial up move of 200 points from 5600 was very fast but there were opportunities in stocks that started rallying later.
We continue to use Bollinger Bands unless a clear trending move resumes on upside. Bollinger Bands provide important supports and resistance levels during corrections and it starts moving along with price during trending markets.
For today…………
To know the further trend of Nifty as well as which stocks are trending when Nifty is moving sideways Subscribe to our Equity Research Report “The Financial Waves Short Term Update”which is published daily before the market opens. To subscribe write to us at or call on +91 9920422202 or visit

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