Tuesday, July 15, 2008

Drop in oil may give a break...... hope you are not short overnight!

Like I said yesterday, there topsy turvy will continue - all the same we have broken the previously laid down support and are once again on our way to go further down. Finally the time has come when the analysts were saying that the selling was not the result of selling in Futures and options but was done by dumping cash stocks. This ideally gets us to the last stage of panic. There is nothing there after expect that after this stage finally is over the retail will take a long time to gain confidence and step back into the markets. Ofcourse after selling his stock at the very bottom - he will pick it back up when the markets build euphoria and are at a high. That's the cycle we / retail investor goes through. Rather than slowly build a portfolio now - the dumping has started.

There seems to be two significant news in the world markets - firstly oil dropped 7 odd dollars and Intel posted better than expected Q2 results. That boosted the US markets to come off their lows- go green - but ended once again into red - but not to the lows seen in early trading. DOW and S&P500 about a percent down each and Nasdaq flat in green. This prompted Nikkei to perhaps open flat go in green and is now trading confused near the flat line only. Strait times too has opened green. If Asia remains flat or green - it may prompt some recovery after the blood shed we say yesterday. Only problem is that our domestic news on politics is too overwhelming to be ignored.

To candles now. Nifty has violated the 2nd jul low of 3848 by 12 points but managed to close above it. If we violate it again then we are going down once again for sure but I personally would not think so. Unfortunately the markets have never listened to me. MACD after remaining bullish for so many days and taking a beating - has started to give up and red closing today will get the red line below the blue line definitely and turn the tables on MACD. RSI will too will give up at this rate. Stochastic had given up a long time back and was already giving bearish signals. That leaves up with TRIX and surprisingly the TRIX still holds it s head above water and looks up. StochRSI too has dropped to 60-65 levels and I would call it an improvement.

As I am about to press the publish button - Nikkei dives down and is definitely down quarter a percent and Straits still sails green but just. We should have gone to just short of 4400 to have begin this journey southwards - but then markets have decided and done what it felt the best. So here we are. A red opening with a further downside is a possibility but will not be good at all. I would expect a flat opening with some recovery as a lot of index heavies are in middle of nowhere actually - neither overbought - nor oversold but still with some positive indicators. But then as I said the market never believes me or follows me. I am as sc**wed up as anyone else so make your opinion as to what the market will do today.

Happy trading - If you have survived so long then what is these few days here and there. Best of luck - and do not forget to see Jaggu's TRIN before forming opinion.