The trader's good fight

I went long yesterday at 4650 and guess what? As I write this note, the Shanghai Composite is down 3%. Typically India reacts to such large falls in Shanghai and we might surely gap down!!!. The Shanghai Composite is trading below its RSI 50 levels clearly indicating that the trend is down. I have mentioned in the past that SHCOMP tends to act like a lead indicator. If this is true this time too, then the world markets could correct.

The chart I sent yesterday of the Nifty clearly shows that the Nifty is trading between an overhead resistance at 4750 and a trendline support joining MArch and July lows. Currently the trendline support is at 4440. That is the reason why the moves in the Nifty have shown reducing magnitude in the last few days. Only when one of the two breaks conclusively can we expect an extended move in Nifty.

As I said before in the note, I went long yesterday at around 4650 levels. The moment I pulled the trigger, I started having visions of the market crashing. I felt a desperate need to keep tweaking my trading system that has worked so well in the past. Then I remembered the Shanghai syndrome and fought against the desire. The affliction was strong and was a worthy adversary. But the hero fought the good fight and emerged victorious in the end. The system was not changed and right prevailed over wrong. I am not sure though that our hero has too many such fights left in him!!!