Thursday, September 18, 2008

War of the worlds.....

1538 hrs: So we did manage to close up by 200+ points on Nifty - Long live the bulls.

0600hrs 19 Sep 08: Bears watch out - we can have 200 point rally on nifty seeing the US end. So the dragonfly Doji was not telling a lie -it is just that I did not have a courage to listen. Gentlemen - welcome to a green trading day today.

18 Sep 08: What better entertainment do you want from the BSE & NSE brothers. It has suspense, drama, action, dance - twist and everything you would like in a good masala hindi movie. Here the hero -- in this movie "Beer is a king" is up to all kinds of funny tricks to let the bull down. For people like me who have been on the sidelines waiting for the salary to come - it was entertainment. For those however, were dependent on the trading for their income. I can imagine what the times have been like.

To start with, I say again at the cost of repetition that the markets have shown wonderful resilience to close above the 4000 levels. The day opened at 4005 on nifty, and the market fell to 3799.55 a point above 52 week low of 3790.20. Thereafter, it climbed all the way up to close 29 points in Green at 4038.15. if this is not resilience then there is no word as a resilience. The Europe, meanwhile, that had opened in green, briefly went red -- recovered into green and just short of closing once again, dived deep into red. FTSE closed 0.66% red, Dax, 0.04% green and cac 1.06% red. US that open the green is already trailing in red, before even midsession has started. The US trouble is wider and deeper, and above all, much beyond my comprehension. So with every news that comes out there's a new level in stocks, all the world over. High on one day and low on the other day. Presently Dow is trading 0.17% in red, NASDAQ 0.45% down and S&P 500 0.33% red. where does this leave us? Well, it's too early to say, the swings are wild. So till the end of the trading session, and till the Asia opens -- it is difficult to take sides. But once again, chances of it slipping red or closing green are about equal.

The horror story on the candles continues. I would have called the candle today, a dragonfly once again, indicating a reversal of the downtrend, but am no longer sure. The volumes were higher than normal. The Bollinger bands continued to widen with the candles trailing the lower edge. 5 EMA continues traling well below the 20 EMA mark. On MACD divergences has remained about the same as yesterday, but the Red Line continues to trail below the blue line, giving bearish signals. On the RSI there is a small turn to the upside -- but overall it is still bearish. Mass index is just about to point short of 26 marker. TRIX is looking down, giving us no respite whatsoever. It is only the slow stochastic and that is generating a buy signal with both red and blue line above the 20 mark and the Red Line also above the blue marker.

The inflation figures were out today. Though the figure stood at 12.14% -- a shade higher than 12.10% in the previous week -- it showed the signs of stability. The inflation during this time last year was 3.46%. With the above data in hand one can justify both the bullish or the bearish mood. Bearish, because there is a tick increase in inflation and does not show is a sign of slowing down. Bullish, because it has remained stable for the fourth week in a row. So now you can take sides as to what you want to justify the bears or bulls.

For those who are more technically oriented - the resistances and supports for nifty are as under: -

R3 4376.20
R2 4213.15
R1 4125.65%
Pivot 3962.6
S1 3875.10
S2 3712.05
S3 3624.55

Best of luck for tomorrow, and I will try my best to update this blog before the market opening.



Uma said...

ok a dragonfly is a reversal?? I am willing to bet on it!!

S S Cheema said...

Yes Uma - dragonfly is a fairly strong reversal. It is opposite of Gravestone Doji. and yes it is supposed to be powerful.

Anonymous said...

Hope you are bearish still - LOL

Cheema good show - continue being a bear till end of this year.

S S Cheema said...

To tell you the truth - I can never be bearish about the India I live in. Don't mistake my humour for seriousness and vice versa. India - where I have been born and bought up is the place to be for the next century.