Techncial Set up:Bank Nifty,Infosys and Reliance Capital

By | July 11, 2012

Risk = The Distance to your Stop loss. Which means you have to have carefully studied where is the best place to put your stop. Its the exact %loss that will occur if your stop is hit. If you hold positions overnight, this distance is less defined, since large gaps will widen stops, I guess put/call option hedges would be better than stops for large positions.

 Reward – The Average Distance to your Profit exit or ‘Stop’. There must be a specific exit point, otherwise you ‘profit’ may disappear as you hang on to the trade i.e. you have to actually take the profit when you get it, just as you would a loss – I learned that the hard way, countless times I had profits ( my entries are quite good), but then kept the trade rather than taking the profit, only end up with a loss…somehow that is more emotionally difficult than a straight loss.

Therefore if you don’t use stops, or don’t take profits when they occur, your risk/reward is undefinable. I now refuse any trade I can’t define the risk/reward.

Bank Nifty

Bank Nifty has broken its trendline joining the tops of Nov 10 and Feb 12. Now the price confirmation is required to confirm the breakout with price staying above 10680 for this week.

 

Buy above 10767 Tgt 10807,10863 and 10950

Sell below 10711 Tgt 10660,10610 and 10560

Infosys

Infosys will be coming out of its earning on Friday,Stock after its dismisal earning in Q4 has done nothing,trading in a band of 2300-2552.

Staying above 2450 will lead the stock to touch its upper end of range 2550 and below it will touch lower end ie.2300 in this week

Buy above 2468 Tgt 2489,2516 and 2540

Sell below 2450 Tgt 2432,2424 and 2400

 

Rel Capital

 

Trading with in a channel with negative divergence on Stoch.

Buy above 383 Tgt 386,393 and 400

Sell below 377 Tgt 373,368 and 364

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