Saturday, May 31, 2008

Weakness is confirmed.......

I will be in a train starting tomorrow morning till markets opening on monday.

Yippi!! I am on leave for a few weeks.

In anycase I am not expecting much in the markets expect a blood bath to continue. The nifty white candle that we saw on friday is well engulfed by a big black candle of thursday it seems as though bears are either enjoying their time eating the bulls or they just do not have it in them to crack the bulls fully. If they do crack the bulls then we have a long way down the ravine before we recover. If not then this tussle will continue for some more time to come.

Momentary relief signs -- nifty tries to move away from the lower side of bollinger band -- but just about, Stochastic and StochRSI are giving buy.

Bearish signs -- The bearish engulfing candle, TRIX, RSI and MACD. Global cues from US closing are neither way.

So best of luck to all for monday. (any developments that may happen on sunday re not discounted in this.)


Friday, May 30, 2008

Kisme kitna hai dum......

GOD save small investors in this tussle that is happening between bulls and bears. Though everyone would say the round has gone in bears favour -- and it may be true too -- but do I sense a bull waiting to strike? Let's see.........

How the operators make a fool of everyone. All this while when I, alongwith thousands of small investors were waiting for the shorts to be covered -- and a bounce back to happen -- a different ballgame was being played. Operators were building longs -- and selling in cash for delivery (probably) -- when while we waited patiently for shorts to unwind and thinking that operators are keeping markets depressed to help with shorts -- it was longs that they were unwinding and then the results are in front of us -- heavens fell -- and so did my BHEL. Only saviour in this story was that when I turned on the TV - heard 'L & T results due today' and bought one lot -- fortunately results are now history and stock went through the roof and I got 150 points before I squared up and sat on sidelines (waiting for bounce back to happen for BHEL)

How do we see it today? -- not good -- not not good at all. The problem is that now there is nothing but to shout bear.

5 EMA below 20 EMA and divergence increasing.
RSI below 50 and facing down.
MACD bearish.
TRIX below 1
We are not showing any signs of moving away from the bottom line of bollinger band.

But then there are some good indications also. The force with which the bears tried to hammer bulls I thought that they will breach 61.8% Fibonacci's retracement -- that they could not do. Infact they could not even touch it in the best of bear times yesterday. They may attempt breaching it today but I am sceptical. If they cannot then I expect a bounce smarter than what I was expecting it to be yesterday. Second -- StochRSI is now generating buy signals. The second signal that is turned buyer favourable is that in slow Stochastic the fast line has crossed over above the slow line and will shortly join StochRSI as a buy signal (please do not mistake this with bullish signal -- they are just giving buy signals). Next support we have at this or these levels is the bollinger band that generally is not breached as an everyday affair. The band however is widening and that is showing greater volatility (as if we did not know already).

So I hold on to the sidelines (sic!) with my BHEL and wait for miracle to happen. If the stock does touch and not breach 1568 (cash) then it makes a double bottom and should (repeat should) show a smart recovery.

Global cues good -- but watch out for our inflation data. Upto 8% -- no shock -- above it hold on to your shorts and have a ball.


Thursday, May 29, 2008

Expiry.... The saviour!

That is the single word that is giving us relief. Last day's so called white candle was not enough to break the body of the previous two black candles, so near term bearish sentiment will remain. Infact as always Jaggu is late to work so has not updated his TRIN -- so that part remains missing in my analysis today.

US closed green -- Asia started green and that helps come what may. Next as mentioned above the expiry helps and final rollover figures are yet to be seen. But remain careful as the Nifty comes close to 5050 levels -- as an absolute --5100 may be possible and that is the time you dump your 5000 nifty calls (if you hold them and take puts). The reversal should be there thereafter on the downside.

The reasons for being midterm bearish --
Firstly, TRIX finally touched down the midway marker and facing down. For so many days it held but even with yesterday white candle it gave up. It leads! so trust it.

Secondly, we tag along the lower side of bollinger band, - MACD and RSI down showing weakness.

Only StochRSI has crossed the 20 marker and says to build some positions (long) that is not supported by any other indication.

So the bottomline? Trade like a bull till closing -- take light positions and do not rollover till you are convinced about the direction the market is taking. Like I have been posting left right and centre asking for advise -- I am long in BHEL and would like to know if anyone has tracked this stock and can give his/her opinion about its future.


Wednesday, May 28, 2008

Thank GOD for small mercies....

When I was a bull I lost ... When I was a bear I lost ... when I am an idiot I gain....
Well this time over I decided that I will and will only trust the charts irrespective of others and my urges. This is what I did... went short on IFCI as the crows had to caw and thank Almighty that the market behaved in a predictable manner and showed weakness nearing close. That made me recover some of the losses I suffered for last few days.

I now have no doubt in my mind about the intermediate weakness. but nearing expiry I feel Firstly, all longs have squared up as the stop-loss would have triggered covering of longs approaching expiry.

Secondly, now the shorts that have been built up in last few days will have to be covered and so we may see green.

The world markets may be meakly moving up but are up and that gives us some hope.

Unlike yesterday when I was almost sure that we will end up weak but could not say in so many words ... today we may remain green and end green though marginally. It may be a small white candle only today.

1. TRIX above middle path -- but any downside will see it below now.
2. StochRSI just about raised its head and should now cross 20 in next day or so. Just as I have been saying -- you cannot just keep it at 0 marker for so long.
3. Slow stochastic below the 20 marker and again its time it crosses this marker even if for a moment.

However RSI, MACD and jaggu (TRIN) continue to be bearer of weakness. That alongwith breaking of rising wedge (bearish sign) and a falling channel (lower tops, lower bottoms) SO any rally or recovery is likely to be short lived. The falling channel was completely missed by me and I saw the reference on Nifty


Monday, May 26, 2008


That is where the bulls are. Rather I would like to put it this way -- this is where I am. And as I say this all the indicators possible have now clearly changed to bearish and like will be said on so many sites - and will be shouted by so many idiot boxes -- it is THREE BLACK CROW PATTERN now and that spells further doom. The markets with this now should definitely test 4785 Nifty.

Does the fall stop there? well it should have a breather -- small white candles for a day or so but in near term should continue its journey downward. Beyond this it has smart support at 4629 and it would be best that we do not try to crystal gaze beyond that.

Let me show you hope -- TRIX is still above the middle marker and with yesterday's onslaught still hovers above middle line.

TRIN says it is overbought (courtesy jaggu dada).

Lastly StochRSI is in dead zone and cannot be kept there for so long. And expiry being just another two days away -- may see a sharp bounce back.

My say for the day? -- we may open in green and remain green -- beyond that you can already see me hanging above LOL

Long live the Bulls -- the bulls are dead


Sunday, May 25, 2008

I remain to be a bull

Okay I lost this round -- but all is not gone. I am alive to fight another day. I have spent hours and hours pondering over the charts and they do not tell me that its all bears. The bears could not touch and break 4914. The TRIX remains undaunted and remains above the 50% line -- mind you it has hardly flinched in last so many days of onslaught of the bears. The StochRSI is at zero line and cannot be kept down for so long. It has to bounce and will change the dynamics of the markets.

Now the bear part of the indications that I read.

Firstly, RSI looking down, MACD fast line below the slow line that indicates that bears are in control (mind you they are trailing indicators) but both signals have still not crossed over the neutral line. The divergence has increased though a little bit.

Secondly, Jaggu says the TRIN is very bearish. Some how i have never gained whenever I have positioned myself against TRIN.

Thirdly, the fibonacci retracements show that the market can now go to 4880. That incidently is the 50% retracement line. If it touches this level then there is all the likelyhood of another sell off upto 4780 levels being 61.8% retracement.
If the 50% retracement is touched then there is a very strong possibility of us touching 4780 on nifty. But there will have to be a breather inbetween. two levels of retracements are not breached in one go.

Now even if we take from a short term perspective, there has to be a breather. I don't think that the retail is now not in numbers like last time to panic and create a sell-off we saw the last time over. Then if that is so -- there is a time to start buying selectively.

Now the problem with this theory is that the Oil factor is just not factored adequately in this. The oil will ease off. and that itself may be a trigger in short term to trigger buying.
Next the fed cut is now just not likely to matter anymore. So don't be disturbed by the stories that fed is not likely to cut rates any more.

RPL is yet to touch the first retracement line at 182.60 , unless there is a massive selloff in this stock tomorrow the TRIX will remain above the 50% line and is still not signalling a sell till it does go below this line. The StochRSI is at zero line and cannot be kept depressed at this levels for very long.

Please understand -- what i am doing here is to help me and everyone else make a informed choice on which ever side of the fence you decide to sit. I am sitting long -- but please do not follow me or anyone else blindly -- these are trying times for the stock markets and the conditions change too rapidly and with too much of force behind them that it is difficult to predict. by anyone. The best have lost to the markets.

Peace on earth and all the best to everyone for monday. Hedge your positions. Do not deploy all your funds -- which ever way you feel the market will swing. Cheers



Friday, May 23, 2008


I am sure that everyone wants to know -- but who the hell knows?
Well I will disregard the fact that the inflation nos are due in my analysis but just an inkling - PM said that inflation continues to be a worry -- does he signal an increase in inflation before it is declared? maybe -- maybe not. Inflation will ultimately be controlled and in any case -- we have been shouting 8% and now 8% may have already been discounted in our stocks -- may not surprise us to break downwards.

A timely monsoon on its way may be a good thing to water down the hoarders. And like in stocks it is the hoarders and speculators that do the most of the damage either way driving the commodities sky high.

Rising Oil -- read my last blog -- the oil will go up and in a way it is good. This is the only way that the alternatives will be looked for and the appropriate technology will develop. I do not know the top of this graph -- but some say 150 $ others upto 200$ either way it will act on demand and supply. OPEC knows that after this commodity finishes -- there is nothing much there they can rely on to give them the kind of income they are used too.

The nifty made a long black candle yesterday. but inspite of all this I am still not a bear. the reasons are :

Firstly, Stochastic RSI on nifty is giving a pure buy signal. It just cannot be more louder than this. And mind you it is a fairly powerful signal.

Secondly, we are not breaking support lines with too much of conviction. the Fabonacci retracement line is around 4980 and that should not be easily broken this time around. Seen Da-Vinci-Code? heard of fabonacci numbers? may be an intersesting reading if you have time.

Thirdly, TRIX is not negative so far -- it was dipping -- but it hs not crossed the zero line so far -- it is one of the so called a leading indicators and Slow EMA line is still above the fast line -- struggling to be above -- but it remains above the slow line.

Finally, I do not know what to make out of candles purely but for sure they are not bearish.

The bad part of the story -- MACD fast line has crossed down the slow line and remains below. Pure RSI below 50% mark though just. as jaggu says on his site. TRIN is bearish. I am a fan of TRIN though i do not have the paitence to sit tight every night and to work it out -- but it says beraish -- you better have TRIN on your side. I was introduced to TRIN by radhika_nandlal on moneycontrol and have been a fan for a long time now.

Tell me -- why don't you selectively enter IFCI and Relpetro? may be worth a while. The rumours of another stake sale round have surfaced in IFCI and above 188 rpl may suddenly breakout and cross 200.


Wednesday, May 21, 2008

Maniac Tuesday

Another crazy day. Our indications were for a bright trading day but like it had to be -- the world markets were weak (actually weak is an understatement considering europe and us have tanked) and that led to a sell off everywhere. The oil pot is just boiling and does not intend stopping. Does this make our economy weaker? Well the govt bails us out -- but in the process diverts tons of money from elsewhere to support keeping oil prices in control -- and just scr*w's the economy out of shape. The oil is 129 $+ ? where does all this take us? -- well in deep deep trouble.
See there is a old theory about oil production and demand -- that is called Peak Oil

The explanation on Wiki is as given below:

Peak oil is the point in time when the maximum rate of global petroleum production is reached, after which the rate of production enters its terminal decline. If global consumption is not mitigated before the peak, an energy crisis may develop because the availability of conventional oil will drop and prices will rise, perhaps dramatically as they are doing now. M. King Hubbert first used the theory in 1956 to accurately predict that United States oil production would peak between 1965 and 1970. His logistic model, now called Hubbert peak theory, has since been used to predict the peak petroleum production of many other countries, and has also proved useful in other limited-resource production-domains. According to the Hubbert model, the production rate of a limited resource will follow a roughly symmetrical bell-shaped curve based on the limits of exploitability and market pressures.

Some observers, such as petroleum industry experts Kenneth S. Deffeyes and Matthew Simmons, believe the high dependence of most modern industrial transport, agricultural and industrial systems on the relative low cost and high availability of oil will cause the post-peak production decline and possible severe increases in the price of oil to have negative implications for the global economy. Although predictions as to what exactly these negative effects will be vary greatly, "a growing number of oil-industry chieftains are endorsing an idea long deemed fringe: The world is approaching a practical limit to the number of barrels of crude oil that can be pumped every day."

If political and economic change only occur in reaction to high prices and shortages rather than in reaction to the threat of a peak, then the degree of economic damage to importing countries will largely depend on how rapidly oil imports decline post-peak. The Export Land Model shows that the amount of oil available internationally drops much more quickly than production in exporting countries because the exporting countries maintain an internal growth in demand. Shortfalls in production (and therefore supply) would cause extreme price inflation, unless demand is mitigated with planned conservation measures and use of alternatives, which would need to be implemented 20 years before the peak.

Optimistic estimations of peak production forecast a peak will happen in the 2020s or 2030s and assume major investments in alternatives will occur before a crisis. These models show the price of oil at first escalating and then retreating as other types of fuel and energy sources are used.

Pessimistic predictions of future oil production operate on the thesis that the peak has already occurred or will occur shortly and, as proactive mitigation may no longer be an option, predict a global depression, perhaps even initiating a chain reaction of the various feedback mechanisms in the global market which might stimulate a collapse of global industrial civilization. In early 2008 there are signs that a possible recession will be made worse by rising oil prices.

This is the genisis of the oil problem and mind you there are alternative sources of energy that have been developed -- but the nations that have developed those are waiting for the right amount of panic in the world before they will declare such alternatives and make another tons of money.

Meanwhile -- if the oil continues to skyrocket -- be prepared for bad -bad times to come - till ofcourse the alternative sources of energy are declared and competitively priced -- and economically available.

Psst .... that is why I am so bullish about Reliance Petro



Saturday, May 17, 2008

Mauja Hi Mauja

Okay -- my wishful thinking for the markets to go down did not work so like a good Indian -- I changed from being a bear to a bull. ;-)
The results - have wound up with some losses but overall in green. I now am long in maruti and Reliance petro. The reliance petro was trying to show signs of a strong breakout had it ended above 188 so took a plunge. It finally ended 187.25 and the breakout did never happen. Infact the RPL and Maruti both have made a black candlestick How I got impulsive I will never know. So for now it is just a long wait and watch for trading on tuesday.
By the way I have not tracked RPL and would really appreciate if anyone who tracks this stock can throw some light.


Friday, May 16, 2008

Ass ????

As expected the markets made an ass out of me. Against my all logic and perhaps the logic of a lot of others. the markets went up and then up and then continued up. The dip inbetween was to confuse people like me into thinking that our short are great and we have done well.
The US markets opened weak and the are now all 0.5% or more up. Just do not know what to make out of all this.
Anyway -- there is a large - confident candle on nifty today and if this is any indication we will open gap up for sure. Which way are the indexes going -- well there is still a talk of remaining at an arms length from the markets because if you cannot afford to track it minute to minute -- then anything can happen in a very very short span of time.
The weekend is around the corner and these are the times that no one really wants to carry their longs overnight -- forget longs for a weekend -- so ? expect some profitbooking be all who have made some quick buck this week.
My score? well just a little above the breakeven line and why? because mostly i did not trust myself and some because thursday -- the shorts especially in tcs just did not work.
See all of you tomorrow.


Wednesday, May 14, 2008


Each passing day now makes taking sides very very difficult. Okay I will now try to put it this way -- there are now two patterns playing a role.
Firstly is a Tweezers that has been made between today's and day before's candlesticks main body. What does this imply? It signals that the top has been tested and unfortunately the bulls have not been able to close above this level on these occasions.
This would now become a resistance that has not been broken and may lead to the markets touching -- or continuing with their journey to lower levels.
How strong are the signals? - well pretty strong and only thing now going against this continuation of lower slide is that the world markets have ended strong.
To confirm the weakness ending -- the markets must close above the 5012 levels. That is the tweezers top.
So basically i am not giving a call today till the trend is established for sure. and mind you -- the trend is around the corner -- whether it is for good or for bad.
Unfortunately i am sitting on naked shorts that is not good and may have to come out with a bloody nose if i do not get a good opportunity to exit.





Bear Vs Bulls

Bearish thrusting pattern was was made yesterday. What it essentially meant was that market opened higher (but less than the halfway mark of day before's candle body) and went low -- below the day before's trading range -- attempted a recovery and though it ended higher than its opening -- just could not break the halfway point of the previous candle. Had it broken the halfway mark -- it would have become a trend reversal sign.
well for today -- just did not have time to read scripts. was just too busy. so will go by trin as given by jaggu. Have you heard of TRIX? well it is one of the rare leading indicator. It is turning bearish but is still indecisive so i will not bet on the market being purely bearish. bulls can save the day if they decide to.
best of luck.


Tuesday, May 13, 2008

Market Behavior -- likely to make a fool of us all

The world we live in is crazy to be sure. Is the market on its way to recovery?
Well with the global indications along with the crude going down seems so. How far and how long it will be true is anybody's guess.
The industrial production going down will affect? yes likely.
Then how do the candlesticks see the markets today?
Well yesterday the market made a candlestick formation that is not exactly a sign of reversal.
The pattern formed is called a thursting pattern and for the recovery to happen I would have loved the closing price to be 5028 on nifty. Under the influence of the world markets the market may open gap up or go upwards but may close in red. Crazy -- that i have to give a bearish outlook on a perfectly bullish day. Well then that's what life is all about and that's what the candles say.

Be carefull -- the markets can swing down.


Sunday, May 11, 2008


To all who make an effort to visit the site. I started with this blog expecting that I will do well and like always just did not have time to update it. I never knew that blogging takes so much time and effort.
Anyways - the effort continues.....
Today I would like to talk about or better write about a site where there are some of the best tutorial available on technical analysis. This site is called informed trades and is maintained by David waring. He gives his tutorial as small downloadable videos. The videos are well compiled and the entire text and the graphs used in videos are available in addition to the videos themselfs.
Okay being in our country -- where bandwidth costs more than an average individual makes money on markets ;-)........ means that visiting this site often for same tutorial can be painful.
Next what i would suggest is that use a small plug in available for firefox called Video DownloadHelper and download the videos.
Now to the next part -- playing the videos. on utube they will play without any supporting software but for ofline -- downloaded videos i suggest you download vlc player and install it. After you install it right click the downloaded file and select open with -- then point to the vlc player.
There -- you have one of the best tutorials where you do not have to read the text learining stocks.
Hope that it is useful.
The links to the sites / software i mentioned above are: -
Informed Trades
Video Download Helper
VLC player