Nifty moved from 8070 to 8970 a move of 900 points within January 2015. The move came unexpected and riding on the wave of some positive news developments and could be a major part of the pre budget rally.
Option traders, who positioned themselves for the move made a killing of upto 400% return within the month. However, the question is, was it possible to identify this upmove well in advance ??
The answer lies in the theory of Integrated Trend Analysis which forms identifiable patterns in Triple Trend Oscillator (TTO) to forewarn impulsive move and is a proven and fool proof method of trend detection to position onself ahead of the move. A synchronized bullish alignment is one such pattern which identifies a bullish impulsive move well in advance and is always almost 100% accurate.
To know more about Synchronized Bullish Alignment :
http://eqtrend.blogspot.com/2014/03/synchronized-bullish-alignment-super.html
http://eqtrend.blogspot.com/2014/03/trading-f-using-tto.html
http://eqtrend.blogspot.com/2014/04/trading-naked-options.html
In the hourly chart of Nifty below with the TTO, post a mild correction around 13-14 January, all the three trend oscillators - major, intermediate and minor were positioned above zero, with the minor and intermediate trend oscillators continued to be above the major trend oscillator. This is a perfect setting for an impulsive move that followed.
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| Nifty Hourly Chart |
The trigger (black dotted) line continued to oscillate around the zero line and giving a risk free (black arrows on the price chart) entry into the impulsive trend every time it crossed over the zero line. The weakening of the trend was indicated by the intermediate trend oscillator falling below the major around 28th January, which is where the intermediate top has been made.
The following table shows the option prices for Nifty 8200 call options during January 2015, indicating the super profits that accrued to option traders.
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| Nifty CE8200 Jan 2015 : Source NSE |
Triple Trend Oscillator (TTO) is an advanced technical tool for brokers, fund managers, financial advisors, traders and investors and can be used for equities, futures and options, forex and commodities.
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