Conversations Nov 8

On CeTA exams:

Bhavin asks:
what are the job opportunities after clearing the 1st level or after clearing both the levels of ATA exams?
My Notes: Well, ATA will try to act as a clearinghouse, trying to encourage companies to hire analysts as well as bringing together aspirants and employers. But, all said and done, you must approach certifiction as a means to enhance your skills. It should not be taken as an employment generating method.
Prashant said…
i just wanted to ask, i have cleared CFTe level I exam. can I get exemption from CeTA level I?

My Notes: Yes, you will. We hope that the second level of CeTA will be more advancd than the IFTA exam, providing indepth learning.

Nirav has this question:
As per my knowledge in technical analysis there are so many techniques like Swing Trading,Japanese Candlestick charts,Elliott wave theory and may be others and also supporting stuff like technical indicators.
So I want to know that out of this technique which is the most effective in stock market and which is the easiest to learn and follow?

My Notes:
The search for the ‘perfect’ method continues. Since the search continues, we can assume that no one has found it yet.  Now, Swing trading is a style of trading, like day trading. Candlesticks do not represent an independent trading system, they have to be used as part of a system. Elliot wave is a complete system by itself, so are many other methods, including classical chart analysis.

You should experiment with these ideas. Eventually, you will come to realize that some methods make you comfortable during analysis while some others go above your head. The methods that help you are the most effective for you.

A side question is: which is the easiest? Again, it can differ for different people. But I would recommend that you should start with classical chart analysis, using charts and trend indicators.

Rohit has a point about MACD divergencs on weekly charts.
If you’ll look at the weekly chart of sensex, You’ll notice that the MACD divergence is in the negative for the past two weeks.

Historically since 2006 there are only 5 negative phases for Weekly MACD and four out of the five times Markets corrected severly.
Since Weekly charts are in control of the market now, I think Markets will test much lower levels very soon till we come out of the negative MACD phase.

My Notes: A divergence says that prices are probably running too fast and need a rest. From 2006 to 2008 January, there were multiple divergences, but the Nifty rallied from 3500 to 6300. Each divergence was followed by some weeks of dips / range bound action.

So, what I am thinking is this: let the market tel us where it wants to go. Currently, the Nifty is making higher highs – higher lows in the 60 minute chart. Either the pattern will come in the daily chart, reinforcing the up move, or the hourly itself will turn down suggesting uncertainty.