Contrarian view on market, The Flipside.

HEAD AND SHOULDERS Pattern:

Look at the chart, index seems to be forming major reversal pattern called “Head and shoulders”.

Left shoulder top is at 5168 and strong bottom of 4531(Dubai fall bottom).

Head top is 5303-strong rebound from Dubai bottom.

Now we if fail to cross the high of head which is placed at 5303 and start falling then it may create right shoulders.

So the height of the pattern is 800 point (4531-5303).

Confirmation of the pattern will come by two ways,

1-nifty fu should not cross 5303 which is head high.

2-nifty need to break 4600 mark, which is neckline of the pattern.

If both happen then we conclude the successful pattern and big correction is possible up to 3900 levels.

GANN WHEEL:

If you are following the w.d.gann charting then around 5150 it is best opportunity to short nifty with stop loss above 5303(above the high of head and shoulders head) with possible correction up to 4750 levels

VOLATILITY INDEX: India VIX

This index is less referred by retail traders and investors.

In simple and common wording it shows next 30 days volatility of particular index.

But it also shows the “greed and fear” among the investor and traders.

When the VIX trading at low which indicates no one is buying put option –every one is bullish on market.

When VIX is trading at high which indicates no one is buying call options-every one is bearish on market.

Traders and investors can take benefit of the same and can initiate trades against the trend.

In our case nifty fu VIX is trading at lowest levels since inception!

So one can go short against the bullish trend if wants to take a contrarian trade position.

TIME SERIES

From 1980 it has been history that first quarter of the every 2 year gives major turning to market either on up side or down side. If we assume sensex has made high of 17790 then this pull back will not sustation anymore.

CONCLUSION:

Traders with high risk capacity can sell nifty fu with stop loss of 5310.

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