I generally do not like do day trading or intra-day trading as it involves playing with lots of volatility in short span of time. The ECG of your heart changes with stock market chart.
But for those traders, who earn their bread and butter from intra day trading, here is one simple way to do that.
I’m giving here technical chart of Nifty on 15 mins chart using Japanese Ichimoku indicator. The chart image has been taken from new MotivWave free software.
On 5th Jan 2011, ints intra day movement, the price closes below Kumo. That was bearish kumo breakout. The same was confirmed was closing of Chikou Span(CS) – the yellow line below kumo. Whenever, the price and CS closes below kumo, one can easily take short-sell call on that stock.
I’ve added another useful indicator on this chart – Elliote Wave Oscillator. It also starting histogram below zero line; thus confirming selling.
The result – Nifty is moving downward from that kumo bearish breakout. At the time of writing this article, Nifty is trading around 5988 levels and looking at charts, it seems, Nifty will move further down.
Now, the question arises, when shall one exit from such short sell calls? The answer is Kijun-Sen line (the blue one). When the price closes above this blue line, book your profit.
The thickness of kumo reflects the resistance of the price. Nifty must closes above the kumo to start bull run. See "Resistance at these levels" label on chart above.