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