Sunday, November 30, 2008

A nation called India….

0700 hrs 01 Dec 08: Nikkei opens the month by opening red - dropping a bit and trying to recover - at the moment 1.98% down.

30 Nov 08: I am a third generation Indian – my grandfather was there in World War I, my father retired from Army – I am an Indian – I was born in Chennai – my brother was born in Dharamshala – I relate to each part of the country like no one else – being a Sikh I have spent my life in rest of India visiting Punjab during my leave only. I can assure you that my experience of the country can be matched by very few people. This country is a place of wonders – it has a life and mind of its own. It is a nation where President can be a Muslim, Prime Minister Sikh, master of the biggest and most powerful political party in the country a foreigner and blah blah blah…. the list goes on. Mind you the US that claims to be the biggest and most successful democracy – has yet to have the first non-white president take office. They did not let Communist party or the concept survive lest they find it catching on. Our’s is a great country – help it live. Actually so much would have already been written/spoken that I will just waste your time perhaps and you will skip the paragraph – but even at that cost – I would appeal – do not blame your problems at others and find in house solutions to your problems or our problems. Let us not do just lip service to the those who have laid down their lives for our tomorrow and that we can do by not being hypocrites – by just doing what we do best by doing it better. Must not let petty politics and issues divide this country. Call out that you are a proud Indian before you think religion, caste or job.

We would have probably had a good rally last few sessions had the events not taken the turn they did in Mumbai. There were operators who probably spread rumours of firing left right and centre to make the market move – trust us the Indians to take bets on others dying – life in a day in India. Shucks – I do get senti when I come to this but let me weigh in all the things. This incident of Mumbai will put a lot of pressure on the govt to show some performance after this set back. Let us see what they can do other than what they have already done to calm the nation. They have already stepped down Patil, Side stepped our punching bag – Chiddu – now we can expect the fuel rate cut earlier than before, the pressure on banks will increase to cut rates – there should be SOPS on infrastructure, housing and small industry. All this and the technicals’  should help the markets go higher. Like I have been maintaining for last few sessions – it is not the time to short – the technicals are building up an up move and will turn up to be a trap. There will be a time to short. Our GDP figures are better than expected. Inflation figures are better than before at 8.84% and we are likely to have the inflation drop further with the inevitable drop in fuel prices.

On the Global cues front US is reporting a surprising solid start to the holiday season shopping. Asia opened flat and ended green – Nikkei up 1.66%, Hang Seng up 2.48% and Strait Times up 1.29%. Europe too had its ups and down – opening flat going green – then red – then green and red again finally ending up green – but just about. FTSE was up 1.46%, Dax was up 0.09% and CAC was up 0.38%. US is showing green but on the yahoo site the markets seems to have ended abruptly so take the figures I give with a pinch of salt – Dow seems to be up 1.17%, Nasdaq up 0.23% and S&P up 0.96%. All in all all the indices are green. Like I said the shopping seems to be strong but do consider it that the industry had to take some very tough decisions of slashing prices more than before to attract crowds. Well all the same the very fact that the data inflow is strong – may improve the sentiment.

The candles have reached the middle of Bollinger bands and are slowly and steadily moving up – on step at a time. The Bollinger Bands are still contracting and that is good. The 5EMA line is catching up with the 20 EMA line and we may see a small crossover this time. Just by the way this would have been its third try this month. The candle was a small one with a small white body. The volumes are good. the MACD is bullish there was an attempt by the red line to crossover below the blue line but has turned up again. So as far as I am concerned it remains bullish. The RSI is bullish and Slow Stochastic red line remains above the blue line and is short of being overbought – good now – may turn bad once it enters overbought zone. TRIX is still looking up – so like always I go with the TRIX for medium term.

Pivot data…

R3 2868 against 2881 last
R2 2830
R1 2792
Pivot 2741 against 2719 Last
S1 2703
S2 2652
S3 22614 against 2557 Last
Projected High Range 2767 to 2811
Projected Low Range 2746 to 2702
Fib Projected High 2803
Fib Projected Low 2665

Best of luck for the coming week.


Thursday, November 27, 2008


Sorry - never realised as I heard the news yesterday night that it would be such scale of coordinated terrorist attack in Mumbai. It is sad every time precious life is lost to such cowardly attacks. Pray for our country - every time we have such an event - a part of everyone of us dies along with these events.

Jai Hind!


Wednesday, November 26, 2008

Don't you take this rally lightly...

0630hrs 27 Nov 08: So it did turn out to be a winning session by US - stock_market_cartoonDow closed 2.91% up, Nasdaq 4.6% and S&P up 3.53%. In Asia Nikkei has opened green – climbed up to 2.5% odd percentage – Moot question for the day – will Terror attacks effect our opening? Not likely.

26 Nov 08:People are terming this as a typical bear rally - and I do agree with them - but I do believe that the present gains will be built upon and not lost in the next few sessions. Infact ideally we should have had this rally starting a few days back - all the same "Better late than never". In my chat here and there - there is a mention of when to short - again my personal belief is that do not take shorting seriously in the near future because there is a vent up momentum that can burst up and leave the shorters’ in a bad bad situation. So being careful is the only thing that comes to the mind in the present circumstances. The confusion is galore and that is what there will be for time to come. By the way all markets are as confused as we are – the bulls want to test higher levels and bears want to do the same to the lower levels – test them that is. Who will win? bears eventually but there is another fight that is building up and that may be a fearsome one to say the least. We live in crazy times and there are no easy answers. All the markets around the world are as confused we are and we can take some solace in that. Let us see what we have in store as far as the other indications are concerned.

Asia was good baring Nikkei that ended down 1.33%. Hang Seng was up 3.81% and Strait Times up 3.5%. We too were in line with these markets Sensex ending 3.81% up and Nifty up 3.7% up. Europe was confused – well nothing new in this part of the world – they do not know whether Asia is the one to follow or to take cues from US. FTSE was down 0.44%, Dax unchanged at 0% and CAC down 2.16%. US started the day in red but has since climbed steadily up in green. Presently Dow is up 1.04%, Nasdaq was up 2.8% and S&P up 1.4%. The US is infact building up on its gains into the fourth strait session. There are four new reports that show the battered state of the US economy – Jobless claims – climbing, Spending reducing, factory orders falling and home sales just refusing to show light in the tunnel.

On the other hand we might has small packages of good news coming our way – UTVi estimates inflation down 8.4%. And if it does fall to this figure or lower then this will be the fourth straight week when the inflation has fallen. The analysts go step further by predicting lower than the RBIs estimated 7% inflation at 6% by the end of the financial year end march.

The candle today was white and good – the problem? It could not touch the yesterday’s high of 2791. The good news? the candle makes a bullish engulfing pattern. The candles are moving to the middle of the Bollinger bands and this time I do not see them stopping at the middle of the bands – they should go past the middle – probably to kiss the upper band. The 5EMA line has moved up towards the 20 EMA line and this progress is good. Volumes were better. MACD positive divergence has increased and red line continues trailing above the blue line. RSI is bullish, Slow Stochastic is good and red line remains above the blue line. TRIX has faced up and might improve the rally further. Mind you in the last 14 odd days  TRIX has not looked down.

So all in all we have better indications on the candle charts than past few weeks. Let us see if it carries forward. The markets have closed today just 10 points lower than the highest seen today.  Let’s look at the pivot data

R3 2881 against 2942 yesterday
R2 2838
R1 2795
Pivot 2719 against 2694 yesterday
S1 2676
S2 2600
S3 2557 against 2446 yesterday
Projected High Range 2757 to 2816
Projected Low Range 2707 to 2648
Fib Projected High 2794
Fib Projected Low 2610


Tuesday, November 25, 2008

Just when we thought that the bad news was over....

How many times do we say crazy and leave it at that - there can be no more bad news - the US does not rest a while to find new venues to post bad news. The latest in the list of bad news is that the home prices have posted record drop. The Obama now has started with trying to get a grip on understanding the magnitude of the problem he faces and keeping a provision of 800 billion dollars to try to fight off the recession - hell with the US bad news - the point is that when we had a fair chance to recover today - bulls just did not have it in them. Did they not have it or was it that bears were too strong? The volumes were fairly high - infact with such volumes a very strong upmove or down move could have resulted - but that too was missing really. Me? I had frankly expected a fair upmove considering that there were positive circumstantial conditions built up. The Asia was up, there is now a firm hope of fuel cut after the present round of elections - that is in Dec last week, we had closed negative for too long and expiry is this week. Now there is a twist - if we kept in the narrow range that we did yesterday and today - was due to shorts getting covered - then the bulls have had no role in the markets being green for last two days - for whatever time. And that is bad - that would imply that there is no serious buying in the markets that is going around and it was the bears only panicking that kept the markets green and if they decide they would be able to break so called support levels with ease. My My - how did I think of all this? GOD only knows - that is my theory. In any case the rally for whatever it is worth is just a bear rally and will disappear like water on sand.

The Asia was good - it remained good on closing as unlike us they had closed and were not too much affected by the Europe opening. Nikkei was green climed further up and then closed 5.22% up, Hang Seng was 3.38% up and Strait Times was 2.03% up in green. Europe opened red and that is what probably affected us and we too dropped. however the Europe had by mid session touched good heights. however towards the closings the markets dropped and closed flat but green. FTSE was up 0.44%, Dax up 0.13% and CAC up 1.18%. The US started the day with a bold face but now - by mid session it is deep red. Dow is 1.02% red, Nasdaq down 1.77% and S&P is down 0.79% - ready to break some new LOW records? We will just have to wait and watch. The crude too is dropping and as mentioned in one of the posts earlier the commodity is following the stock markets and they are leading the trend.

The candles - exactly two white and we are back to back candle - the candle really is not implying anything - just a black candle stick that looks like an inverted hammer and that has no meaning after a upswing. So that is that. Bollinger bands seem like expanding and that to just a wee bit. The divergence between the 5 EMA line and the 20 EMA line is same as before. Volumes were more than yesterday - MACD red line and the blue line are virtually overlapping but the red line is above the blue line - for whatever it is worth. Mass index is indicating continuation of the down trend. RSI is good but looking down. Slow Stochastic is good with the red line still above the blue line and crossing the 50 marker. TRIX is flat and yet to make up its mind which side to go.

Still we have a bit more positive indicators than negative - for that time being that is. Let us see where they take us. The Pivot data is as under.

R3 2942 against 2847 yesterday
R2 2846
R1 2750
Pivot 2694 against 2693 yesterday
S1 2598
S2 2542
S3 2446 against 2540 yesterday

Projected High Range 2722 to 2798
Projected Low Range 2782 to 2706
Fib Projected High 2831
Fib Projected Low 2596

Pivot remains virtually at the same place and the Resistances have moved up and Supports have moved down relatively - so another volatile session in our hands?


Sorry - another day of no update except pivots

R3 2847 against 2883 yesterday
R2 2800
R1 2754
Pivot 2693 against 2654 yesterday
S1 2647
S2 2586
S3 2540 against 2426 yesterday

Projected High Range 2724 to 2777
Projected Low Range 2702 to 2649
Fib Projected High 2769
Fib Projected Low 2603


Sunday, November 23, 2008

Rally Rally!! Run Run!!

2000 hrs 23 Nov: So it did turned out to be a good day after a nerve wrecking 7 days fall in a row. The run-up without any doubts was against all odds where the Global Cues were just not playing up. There is bad news all around and there is really nothing good except an odd statement from the Prime minister that we are on course to still achieve 8% growth. He is one man that one takes seriously - that was proved when the markets rejoiced his statement and we went up. Was there any other reason? I don't think so - so we climbed with still somewhat low volumes and FIIs still putting up the selling pressure. Okay here is what I really feel about the whole ball game played on friday - the bears were as it is jittery coming to these levels - last time the bears who would have entered the markets at these levels would have got a bloody nose - the run up was a good one - so for whatever reasons when the markets went and traded above the R1 levels the stop-losses got triggered and inspite of a brave front by the bears the markets recovered again. It would have helped that the weekend started next day and the expiry week started next. Now the question is how long do we go up before we hit the fan and drop again. Last time my levels were perhaps too high and we never really reached those levels. This time over I once again feel that we may go to 3k levels and above to about 3.5k on Nifty. But once again my assumptions are very hypothetical and there is just chart patterns and feelings behind my saying so - nothing like indepth study of charts financial data that others would be quoting. What is going in our favour ofcourse is the falling Crude, rising rupee and okay results - manipulated or not I can't say.

Okay the global cues so far - Asia started from deep red and recovered green - Nikkei up 2.7%, Hang Seng up 2.93% and Strait times up 2.98%. All Asia closed at or very close to the top trading range for the day. Europe opened flat to red and then went green. By the mid day however the markets gave away their gains and then never looked up. FTSE closed 2.43% up, Dax 2.20 % red and CAC down 3.33%. US opened flat and traded in a narrow range around the flat line - it was only during the last hour or so that the markets surged and surged well - Dow ending 6.54%, Nasdaq was up 5.18% and S&P was up 6.32%.

On the candles this was one attempt by the markets to show some correction after seven days of black candle with no respite at all. The Bollinger bands remain the same size - with 5 EMA line still below the 20 EMA but divergence has reduced. Nothing good really here to say. MACD lines that had merged have again shown positive divergence. RSI is looking up. TRIX is flat - emotionless. Slow stochastic red line has come out from the over sold territory but the blue line that is still below the red line is in oversold territory only - this is good so far as it will help recovery. Mass Index says that the down trend is still ON. 2525 - 2550 has become a strong support - and may hold an odd onslaught again - but for some reason we break it then lower levels of 2200 are very much possible on nifty.

R3 2883 against 2966 friday
R2 2819
R1 2756
Pivot 2654 against 2563 Friday
S1 2591
S2 2489
S3 2426 against 2360 yesterday

Projected High Range 2705 to 2788
Projected Low Range 2648 to 2565
Fib Projected High 2762
Fib Projected Low 2508

Higher levels are possible tomorrow - conservative outlook between R1 and R2 levels.


Friday, November 21, 2008

Copy of post from "Then Indian Stocks" web site

Corporates like Jaiprakash Associates have chosen not to account for losses on FX exposure in the accounts for the first half of FY09. As per current calculations, the company will lose about Rs 3 per share in earnings post-FCCB accounting. Losses of this magnitude when accounted for, will make JP's result move into RED by end of FY09.

These and many other stocks mentioned below are likely to face severe de-rating in the coming months, as the deliberate RBI policy to keep the Rupee weak implies a permanence in FX losses (Accounted or not) as the Central Bank has carried out a 20 per cent competitive devaluation of the Rupee against the Dollar, just like so many South East Asian nations and those in South America.


Indian markets have in the last few years traded at a premium to other regional markets because of better corporate governance, superior disclosures, high management quality and better capital productivity, apart from superior and consistent earnings growth. In a scenario of rising risk aversion, investors will take a tougher view on companies that adopt 'aggressive' accounting policies, even if these are in line with prevailing accounting standards.

This will reflect in the de-rating of such stocks, relative to peers that adopt 'conservative' accounting policies. During 1QFY09 we have seen a number of companies resorting to accounting policy changes, charging FX losses to balance sheet, subsidiary stake sale to group entities and other accounting practices to buoy reported profits.

Permitted, but not best practices

Capitalization of FX losses on FX debt, forex contracts etc. FX losses on translation on FCCBs not being recognised under the assumption that FCCBs will necessarily be converted.

Losses on outstanding FX derivatives, while being disclosed, have not been provided for in the P&L as per AS30 (most companies do not follow AS-30 as it becomes effective from 2011 )

Transfer of assets to subsidiary companies or group companies to boost stand alone profits and without any clarity on valuation methodology or justification of the same. Increased instances of related party transactions are visible.

Changes in depreciation policy and revenue recognition policy to buoy profits or revenues.

Fudging Up Accounts, In a permitted way

The following stocks are likely to face a severe de-rating on the stock markets.

Anantraj Industries
, a north Indian commercial developer, transferred part of one of its projects (0.52mn sf out of 0.75mn sf in a mall in Delhi) to its wholly owned subsidiary and consequently showed equivalent revenues in its standalone results (93% of 1QFY09 revenues).

As against standalone revenues of Rs1.72bn and net profit of Rs1.52bn, consolidated revenues are Rs104.8m and net profit of Rs77.6m. Out of the consolidated revenue of Rs104.8m, Rs68.05m (65%) is from the ceramics business.

DLFs non-DAL revenues declined 44% QoQ to Rs22.5bn and around 40% of sales have been to DAL, a group entity. 44% of debtors are DAL and of total debtors, the share of DAL has increased during the quarter with DAL receivables increasing by Rs14.5bn QoQ.

During 1QFY09, sales to DAL were Rs15.6bn, which is marginally higher than the increase in receivables from DAL. We would like to add that DLFs high level of transactions with group company DAL and high level of receivables has been a point of debate since it went public.

Dr. Reddy’s has adjusted mark to market losses on outstanding US$250m of hedges in balance sheet, while P&L reflects forex gains realised. The company also reclassified its contract manufacturing business (CPS) revenues into API and Formulations, which makes it difficult to analyse its segmental performance.

Himatsingka in one derivative contract had mark to market losses of US$41.5m as on March 24, 2008 and no provision has been made since the company has filed a case in court against the concerned bank. In case of another derivative contract, mark to market loss of Rs1.58bn as on 30th June has not been provided for since the derivative contract is still open.

HCL Tech has normally had a very large hedge position compared to its revenue base. While the rupee was appreciating, the company reaped benefits of this and reported US$79.2m in forex gains in FY07. The company has always maintained that it would prefer to lock-in a constant INR/US$ rate through hedging rather than suffer from the currency volatility.

However, the company unwound US$540m of hedges in Jun-08 and booked large forex losses. We find this change in forex policy surprising and the company has likely brought forward its potential FY09 FX losses to 4QFY08 through this change in policy.

Jaiprakash Associates did not provide for FX losses on outstanding FCCBs of US$400m through its P&L and plans to provide for the FX losses/ gains at the end of the year.

Jet Airways changed its depreciation policy from WDV to SLM, and thereby wrote back Rs9.2bn into its P&L, which helped the company to report profits during the quarter. It also helped Jet to report higher net worth, which will help in keeping reported gearing low. This is a one-time exercise. Jet also capitalised forex loss of Rs6.2bn on forex debt and adjusted it against carrying value of fixed assets.

Prajay Engineers, Hyderabad based developer, reported a loss in its fourth quarter results against expectations of a profit. The company "lost" records for a project worth 40% of its annual revenues at the site office.

The company in its press release said - "After the year end, basic records relating to sale agreements / revenue and construction expenses of one of the Projects of property development were lost at the site office, Vishakapatnam. The auditors in their report have stated that they were not able to verify the books and records relating to income of Rs1437.71m and relevant construction cost of Rs752.654m. Management is making all efforts to locate/ retrieve the lost records."

Ranbaxy has mark to market losses of Rs9.09bn on forex derivative contracts, which have not been provided for because the company believes "the gain on fair valuation of underlying transactions against which the derivative transactions were undertaken amount to Rs10.3bn." This argument is against the principles of conservative accounting wherein mark to market losses are being offset against assumed future profits.

Reliance Communications has adjusted short term quarterly fluctuations in foreign exchange rates related to liabilities and borrowings to the carrying cost of fixed assets. The company adjusted Rs1.09bn of realized and Rs9.55bn of unrealized forex losses in the above manner.

In addition, the company has not recognised Rs3.99bn of translation losses on FCCBs, since the FCCBs can potentially get converted, although the FCCBs are out of money. Adjusted for all the above, the company would have virtually no profits in 1QFY09.

Reliance Industrie
s, in continuance of its policy, adjusted "foreign currency exchange differences on amounts borrowed for acquisition of fixed assets, to the carrying cost of fixed assets…which is at variance to the treatment prescribed in AS11." Had AS11 been followed, profits for 1QFY09 would have been lower by Rs9.4bn (23% of reported net profits).

Sobha Developers, a south Indian developer, changed its accounting norms in 1QFY09 for revenue recognition which facilitates revenue being recognized earlier in a project cycle. According to its press release, if the accounting policy had not been changed, the company’s 1QFY09 PBT would have been lower by 20%.

Excerpts from the company’s press release: "With effect from April 01, 2008 the Company has changed its accounting policy for revenue recognition for sale of undivided share of land (group housing) on the basis of certain minimum level of collection of dues from the customer and / or agreement for sale being executed rather than criteria relating to the project reaching a significant level of completion to align it with revenue recognition policy for sale of villa plots.

This has been resulted in additional revenue recognition and higher profit before taxes of Rs321m and Rs150m respectively during the quarter ended June 30, 2008."

Tata Motors has transferred 24% stake in Tata Automotive Components (TACO), a company with revenue of US$675 in FY07, to Tata Capital, a group company, and booked profit of Rs1.1bn in 1QFY09. Management has declined to disclose the valuation methodology.

Senior management of Tata Motors, in a conference call with analysts, said, "I would not be able to share with you the specific valuation methodology, except to say that the things are done by an independent reputed firm and based on the company’s track record and the future business opportunity."

Tata Motors has also changed its methodology for calculating provisions for doubtful receivables, which resulted in higher reported ebitda to the extent of Rs507m (10% of ebitda).

TCS, the software major, increased its depreciation policy on computers from 2 years to 4 years. As a result, 1QFY09 PBT was higher by an estimated Rs500m (c.4% of net profit in 1QFY09). TCS follows cash-flow hedge accounting and till FY08, it used to recognise hedging gains on effective hedges in its revenue line, thus boosting the reported revenue growth and EBIT margin.

In FY08, TCS had Rs4.21bn from hedging gains, of which, Rs1.37bn was included in the revenue line. However, from 1QFY09, TCS will report all forex losses/gains below the EBIT line in other income. Thus the losses it had on its hedge position will no longer be booked in the operating line.

Zee Entertainment withdrew its buyback offer "for the time being" without assigning any other reason. This happened after SEBI made it mandatory that companies will have to complete the entire buy back within the stipulated time, if the stock is trading below the maximum buy back price at the end of the buy back period and the buy back amount has not been completed.


Thursday, November 20, 2008

Another day gone by.....

And we wait for yet another day for some miracle to happen. We are now at the lowest ebb perhaps as far as the markets are concerned. There is just no respite - one day after the another falling to yet another low. I got up early to update the blog and as I switched on my idiot box - there it goes - blah! blah! blah! Every third day Dow is going back to 1 years low and is presently at 5.5/6 year low, S&P is at 11 year low. So that's the outlook for today. If US fall at this rate then we are somewhere there. Mind you that markets had pretty well stabilised there in US and were infact along the flat line going one in green and once in red in a pretty narrow range. The proposal or let me put it this way that the US govt refused to put any pennies in the Automobiles begging bowl and that coupled with the fact that Crude broke below 50$ sent the markets crashing south wards. Just south wards may not do justice - let me put it this way - the markets dropped down in a well. The bottom is not to be seen yet.

Hardly anything worthwhile to talk about on the international seen except that the drop took all the markets one after the another to new lows. Europe was down on an average 3%. FTSE down 3.26%, Dax down 3.08% and CAC 3.48%. US like I have mentioned earlier - was somewhat alright till about an hour or so before closing - then it went down the well - Dow closed down 5.56%, Nasdaq down 5.07% and S&P down 6.71% - what is it again Standard and Poor - yeah the poor part. Seeing this the asia has opened week but not showing the kind of losses that US showed. Infact after opening with deep cuts the indices tried to go towards recovery - but the bears seem to be too strong yet. Never know, never know...

On the candles there is nothing new here too. Candles have finally reached the lower bottom and only hope is that the candles should not voilate the lower bands. MACD - having positive divergence for so long - has survived again - but any onslaught today and it will be in negative territory. RSI just short of going to the oversold territory. TRIX too is still not really looking down and that is actually some performance. On closing basis we closed above Oct 27 levels - yesterday the markets were basically trading within S1 and S2. Slow stochastic too is in oversold territory. Mass Index shows the continuation of the down trend. We should not go down further - but take it this way - the global indications are just too negative. Mind you - Asia is holding its head at about 2 -3% down Nikkei presently at 2.22%, Hang Seng down 2.99% and Strait Times down 1.65%.

Guys is there something wrong with me? Idiot box is recommending people to go short at these levels after we have dropped for 8 straight days. Crazy if they turn out to be right. Any way - The nifty pivots are...

R3 2766 against 2927 yesterday
R2 2695
R1 2624
Pivot 2563 against 2674 yesterday
S1 2492
S2 2431
S3 2360 against 2422 yesterday

Projected High Range 2593 to 2659
Projected Low Range 2608 to 2542
Fib Projected High 2669
Fib Projected Low 2466

Best of luck ... Will Pivot and S1 hold? It is challenging to spell this out but I feel so.


Wednesday, November 19, 2008

I was wrong.... and right at the same time.....

0730hrs 20 Nov 08: Sorry I could not post the blog yesterday night as the internet was just not playing up. The US has touched new lows as expected and the Asia opening is as bad - only relief is that Nikkei is not trading at the levels it opened at - almost 5% down and is now around 3% down. Hell - what is 2% for bears - it may be at the lower levels by the time we open for all we know. Guys - look at crude - 53$ and our govt is waiting for what to give us price cut - US becoming a Third world country?

19 Nov 08: The expectations of the recovery were not wrong, it is just that there is no impetus from the govt or any other quarters to make it work. They are waiting -- waiting for the right time to strike - when? their calculations take it closer to elections so there is time to go before so called measures are enforced with vigor to show some positive results. In any case that case scenario too is not very far away - just a few more weeks down the line. But if this remains the scene in the international scenario and there remains supported conditions in India (or unsupported - as the case may be) - this conditions will continue. The levels that are likely to be tested may not prove to be as strong supports as being made out by many quarters and the stocks may sink even below those levels. The international markets too are searching for the bottom and the bottom seems to be eluding everyone. No strategies seems to be wroking and lower bottoms seems to be the order of the day.

Asia closed mildly red as if searching for some news/event to grope on to. Nothing was forthcoming though and after a flat opening by Nikkei it slipped down, down and down. It was only near the closing that some semblence of sanity returned and the closing was above the days lows - but still at 0.66% red. Hang Seng closed 0.77% down and Strait Times was 1.59% down. Like in those days when we could see nothing but green - now a days we see nothing but shades of red. Europe was no better - it again opened flat in red and the and for the rest of the day did nothing but slipped down down and down. FTSE finished the day with 4.82% red, Dax 4.92% down and Cac down 4.0%. US too opened red but flat - made two attempts to break into the green but by mid session now is deep red. Dow down 2.01%, Nasdaq down 3.36% and S&P down 3%. I expect a bad bad closing for US today.

The Candle formed today was inverted hammer - a reversal signal - frankly I too am sick of giving out reversal signals as nothing is working out but all the same that is what is there on the candles. the candles have crept closer to the lower bottom. 5EMA line is lower than the 20 EMA line and is slipping down further. the volumes were a shade higher than last two days. Are the bears finding it difficult to touch lower levels - a lot do not think so as the feeling is that there is no buying in the markets at all. MACD red line has kissed the blue line and the divergence is very close to zero. TRIX has almost given up looking towards the sky and is turning flat. Mass Index shows the continuation of the present trend. RSI is still positive but to what effect? - cannot say. Okay now - the Slow Stochastics are oversold like in highly oversold. Seeing them like this I promptly pulled up one year charts and each time we had it at these levels - there were a few white candles. But all the same take all this with a bucket of salt - I really expect US to touch new lows either today or in a day or so. We might follow suite after all we have to test the Oct 27 lows and then only we can expect something.

All in all we may may drop lower and that is it. But in the first case where we are not able to breach OC 27th low on closing may be relief and if we do breach it then markets we will have an entirely new range to settle down at... a lower trading range for a long time to come.

The nifty pivots are...

R3 2927 against 2940 yesterday
R2 2829
R1 2732
Pivot 2674 against 2716 yesterday
S1 2577
S2 2519
S3 2422 against 2492 yesterday

Projected High Range 2703 to 2781
Projected Low Range 2763 to 2685
Fib Projected High 2814
Fib Projected Low 2574

To all the Jedi masters - may the markets be with you ...


Tuesday, November 18, 2008

New tomorrow.... Anyone looking forward to it?

Okay the fight has reached the following stage now in US - US auto makers are finding it hard to keep afloat. Why did they ever reach this stage - well recession is one of the reasons - the other is the head strong ability of the Americans to bang their heads against walls - no matter how strong the walls are. Over a period of time - there were studies done over and over again that the US auto makers were losing out to the world - Why? they did not budge their stance from producing gas guzzlers which were good on the "show off" scale but did poorly when it came to economy. The gas rates meanwhile steadily increased and the rest of the world - Europe and Japan in particular were fast to see and perceive the future. They moved on to economic vehicles with comfort level in the ever crowding roads. Okay - I just veered off the road of what I wanted to convey. Now some in the US administration feel that out of the 700 Billion pledged for relief of Ailing financial institutions - some should be set aside for the Auto makers. Ben Replied to this that it would not be a good strategy as the aim of the bail out was to stablise the financial institutions to the level that the lending and borrowing start again and the economy gets a stimulus. Well I too feel that the demand and supply should be stablised. The govt cannot keep paying for the follies or otherwise of all. Today it is auto makers, then will be toothpaste makers and the list will keep on going endless. So maybe they have to put a stop to this begging bowl - after all they are still engaged in Iraq, Afghanistan overtly and a dozen of countries covertly with now even Russia breathing down their neck. Any way it is their headache at the moment and they have to find a solution themselves only. Infact as of now the US has realised that the first installment of the bailout package - that is 350 billion is just not firepower enough to make a dent on the ongoing recession. But rightly so the balance 350 billion injection is being kept aside for the new administration to take action as deemed appropriate. OOOf! big money and bigger problems.

The markets were as bad as they could possibly be. In Asia the news of Japan being in recession seemed to have sunk in finally and after a day in green the Nikkei opened red and kept there only in a narrow band closing 2.28% in red. Hang Seng was down 4.54% and Strait Times was down 3.26%. Europe seemed to have had enough in the past few days and it started flat went down red and then recovered to close green - the best scenario in the present circumstances. FTSE was up 1.25%, Dax up 0.10% and CAC up 1.11%. Ofcourse the Europe closing takes input from the US and US too opened flat and has now climbed comfortably in green - it has shown a lot of volatility in the period till now. So inspite of being in green there is just no grantee as to what closing will be seen by the US markets. Dow as present is 1.83% up, Nasdaq up 0.51% and S&P up 1.53%. The data from US continues to be weak.

The charts - that were showing hope till yesterday have just gone bonkers and down in a pit. The candle today was big black one. It increased the size of the otherwise narrowing Bollinger bands showing that once again the down trend is ready to play out perhaps. Volumes mind you were still not too muck. The 5EMA red line is still below the 20 EMA line and looks down. MACD red line is still above the blue line and the divergence is reducing - bad bad. TRIX is still looking up -- looking up as in hope? RSI is falling back to the 30 marker (will enter oversold zone if the fall continues at this rate. Slow Stochastic red line is trying to cross over the blue line and both red and blue line are in oversold territory.

So now all is infront of you what I could keep there - take your pick - go long or go short tomorrow. I will still be with what I said yesterday - The market should go up some before testing our previous lows but they (markets) have been behaving extremely weak.

The nifty pivots are...

R3 2940 against 2932 yesterday
R2 2854
R1 2768
Pivot 2716 against 2768 yesterday
S1 2630
S2 2578
S3 2492 against 2605 yesterday

Projected High Range 2742 to 2811
Projected Low Range 2792 to 2723
Fib Projected High 2839
Fib Projected Low 2626

Ofcourse the best of luck to all remains ...


Monday, November 17, 2008

Doji?..... For what?

0630 hrs, 18 Nov 08: So US tried and failed at making a recovery - Dow is down 2.63%, Nasdaq down 2.29% and S&P down 2.58%. Asia has opened red - Nikkei down 1.56%.

17 Nov 08: Hold on guys - we have some more bad news on the cards. Japan has now officially joined the bandwagon of the nations in a recession. Citigroup has announced another cut in its work force by 53,000 hands (okay don't get it wrong - you can replace hands with heads and do not try to divide the figure by 2). They would do so in the coming months. Take the figure there with a pinch of salt - it is indeed 53 K jobs down and this is in addition to 22,000 jobs cut by Citigroup earlier getting the score down to 20% of its entire work group. Hey any one out there who doubts that India would not be effected by the ongoing Economic crisis needs to rework their outlook (like I had to do). Of Japan entering the recession is not really a surprise. They have been off and on trying to tackle with one economic crisis to another since a long time now. This happens not because they are not competitive but because of the inherent problems of a nation with virtually no resources. Now all nations are becoming hubs of development where in they are trying to look inwards for resource management and backward integration from development to production to distribution.

Okay if we have understood the current situation then there are a few things that I feel we should be aware of. Firstly, inspite of all the rantings by anyone here at the moment (I mean't our politicians) there will be no action till the last moment of the ban by the election commission. After all they have to save some good issues to be killed at the last moment to gain popularity. Another example I can think off at the moment is the reduction in fuel prices. Popularity measures? Second mind you we have corrected a lot by the for all the negativity around - after all who now doubts that we are in a recession! I personally feel that we have corrected a lot as far the pricing factor is concerned - what now left is the time factor that is yet to be factored in. At the most we may loose another 15-20% but by and large we will now be at these or little lower than these levels for some time to come. For how long will this recession last? No one really knows - did you know that in your lifetime you will never have same type of cold ever. It is same in stocks - there is no precedent of such a situation earlier. Each time we are in a hype or recession it will be new - the challenges will be new and so will be the way to tackle them - so we may be here at these levels for a long time now - that long time may be a year or two at the most. Remember I am no expert - I form my own opinion and I may turn out to be wrong. But take it this way - you have as retail two years to pick mango s and keep them to ripe - in any other situation you would have regretted that you have had a missed opportunity - now is the time to redeem your soul off this guilt at least - invest wisely and regularly - believe me this opportunity may be a once a life time - but do not go overboard. Do not borrow money and invest - do not go to second line of companies no matter what who says - remain in front liner companies and invest - invest.

The markets were bad today - the only good green market was Nikkei after they confirmed to the world that they are in a recession. Nikkei started in red - recovered and ended 0.71% up in green. Hang Seng and strait times had recovered form the days lows to finish near the flat line - believe me that was quite a feat. Hang Seng ended down 0.10% and Strait Times down 0.54%. Europe did no better - FTSE closed 2.41% down, Dax down 3.16% and Cac closed down 3.32%. Well well - US bad news flow is just not stopping. US opened red and short of the mid session is still there - in red. Dow is down 2.26%, Nasdaq is down 1.98% and S&P is down 2.05%.

On the candles its a Doji - does it show a reversal for what ever it is worth? There are two things that I would like to draw your attention to - firstly the Doji - that I have mentioned - it probably conveys the struggle in between bulls and bears and then closing near the opening levels - there being no clear winners. Second is all said and done - 2800 on closing can hardly be classified as violated. It closed at just a point below 2800 at 2799. The only point of worry really is that the volumes were less - take it anyway really - bulls lost or bears lost. I feel the Doji will show its magic and we may go up a little perhaps ;-). Hell it was a guess. Now the Bollinger bands are still narrowing showing a reduction in volatility - the breakout from these levels - should not happen as of now. We are in middle of the bands and drawing near to the lower edge day by day. The Positive divergence on MACD is still there but has reduced. Red line is above the blue line and that remains good. Mass Index is looking down. RSI remains good. Slow Stochastic is now in overbought zone - recovery once of these days - even if it lasts a few days only. The TRIX is looking up and gentlemen I will go by the TRIX and TRIN indications TRIX is here and TRIN will be there on Jaggu's blog. That is all there is to it. I feel we should recover from these levels but when and how I just do not know... My guess is as good as yours.

The nifty pivots are...

The Pivot data -
R3 2932
R2 2887
R1 2843
Pivot 2768
S1 2724
S2 2649
S3 2605

Projected High Range 2806 to 2865
Projected Low Range 2760 to 2705
Fib Projected High 2845
Fib Projected Low 2661


Ready for another Rock and Roll week?

The week that went by saw action in a fairly narrow band - with the overall direction towards the negative zone. Daily volatility for those who could make use of it was good (or bad - depending which side you were on the receiving end). The mutual funds have given a negative growth return since quite some time now. On the brighter side the IIP data was better than expected, Inflation in a surprise dip is in single digit and oil is now at almost one third the cost per barrel - from its highs a couple of months back. Third cut in aviation gasoline prices. And then there was this G-20 Washington summit on dealing with the economic crisis that has spread over the world now with more and more nations joining the crisis. A small run down on my views on these events. The mutual fund redemptions are kicking in now leading to further money being sucked out of the system. The injections of liquidity that are being given are due to work but will certainly take more time as the approach will become more and more cautious - the reason the banks still have not reduced rates? IIP data was a relief but experts on the issue see bad figures for the next quarter. Inflation has come down as the commodity prices continue to fall. Why? in the first stage everyone saw the money shifting from the equity to commodity, the hype of commodity being a better investment was echoing everywhere. Then came the realisation that if we are indeed in a recession then the demand for commodity too will wane and this is what is showing and leading to drop in commodity prices - be it steel, vegetables or crude for that matter. When commodity prices drop the drop in inflation is but just a matter of time - but the fall to single digit was a surprise and a relief all the same. Now it is this same logic that I have listed above - is working against us being happy about the inflation falling and leading to us being stagnated the present levels. A lot was expected from the Washington Summit and I feel it has fallen short of what many were expecting out of it. Bush continues to sing songs of the free economy - Dr Manmohan Singh rightly quoted The General Theory of Employment, Interest, and Money: “Speculators are harmless as bubbles on a steady stream of enterprise. But the position is serious if enterprise becomes a bubble on the whirlpool of speculation. When the capital development of a country becomes the by-product of the activities of a casino, the job is likely to be ill-done.” China did not pledge anything out of its 1.9 trillion dollar reserves for the so called bailout fund aftermath of the Summit. The topping in the summit came as major decisions were rolled over for Obama to take the hot seat and show direction.

Where does it leave us? as deep in Sh*t - as we were a week earlier. As on the last closing Europe opened green and was happy the entire day. It is only towards the end session when signs from US were not good that the markets dipped a little to close below the highs - but green neverthless. FTSE closed up 1.53%, Dax up 1.31% and CAC up 0.67%. US opened red (flat mostly) went deep down red for most of the session and then there was a surprise recovery that took most of the indices to green momentarily and then fell like hot bricks once again to close red. DOw down 3.82%, Nasdaq down 5% and S&P down 4.17%. Asia opening - Nikkei has opened red and almost immediately fallen down - now almost 2.46% down. No bets on it holding these levels for good or bad.

On candles? nothing that seems good. The candle was red with a large upper wick - unfortunately the upper wick too could not test the high of day before. the lower body and the lower wick meanwhile tested and violated the previous days lows. The volumes for the back candles started with lower than average and increased steadily over last three session to come to average. The Bollinger bands are narrowing steadily but they are still too wide by all means to show a sudden and violent change in direction. 5 EMA continues to be below the 20 EMA. On MACD the red line continues to be above the blue line but the divergence is reducing - might go in negative territory soon. All in all MACD is looking up and so is RSI that is bullish. TRIX is contineously looking up - wonder why? On the slow Stochastics the red line is below the blue line that is bad and red line has entered oversold territory - we might have a small relief coming in next week towards the end?

The nifty pivots are...

The Pivot data -
R3 3098
R2 3002
R1 2906
Pivot 2842
S1 2746
S2 2682
S3 2586

Projected High Range 2874 to 2954
Projected Low Range 2922 to 2842
Fib Projected High 2981
Fib Projected Low 2734

So that is all there is to it. The indicators are showing some hope in otherwise hopeless situation.


Thursday, November 13, 2008

While we were sleeping............

I was busy catching up with my sleep after a late night movie "Quantum of Solace". The world was busy churning out villains eating the unsuspecting investors in the world stock markets. We fell like a hot brick after we had better than expected IIP Numbers - Wait better than expected IIP numbers? then what in the hell is the reason for our markets falling? GOD only knows - but what is doing rounds is that we are in middle of slowdown in industrial production - a stage that is the second step in a recession - this follows what was seen recently - the financial/credit slow down. Theories, theories and theories doing nothing better than justifying the present state of affairs of the markets and not giving us a damn thing new. Well cannot blame anyone - the markets have a mind of their own and you can do only introspection and not peep into the future - that's the way. There would be a small group of people who would be actually enjoying this phase - so much volatility. But for others - these are bad times. Yesterday the markets were up then down and then up and then.... Do not get carried away by this rhythm - this will die down suddenly keeping people stranded in middle of nowhere.

Okay let us start with what we have missed last few days ... Asia was down 5-6% on an average, Europe opened and they opened flat with a positive bias - by mid session the markets could not hold out and FTSE lost 1.52%, Dax down 2.96% and CAC down 3.07%. US opened down and then did not look up - it closed down - Dow down 4.73%, Nasdaq down 5.17% and S& P 500 5.19% -- then comes the second day of trade... that is 13th Nov .. Nikkei opened in red and slipped down greater to close at 5.25%, Hang Seng at -5.15% and Strait times down 1.6%. The first day was when Intel has slashed the 4Q outlook on the dimming PC demand. The second bad news to hit the second day was the Jobless claims that jumped to the 7 Year high. Europe opened negative and then yo-yo'ed between positive and negative around the neutral line. FTSE as of now is 0.59% in red, Dax up 0.61% and CAC plus 1.25%. Guess what - US has just opened and is all in green - all we have to see now is that it remains in green and closes so. All the same Dow is 1.06% green, Nasdaq up 0.53% and S&P 500 up 1.24%. Now there are two things to it - firstly it is just the begining of the session and the markets can swing anywhere, secondly IF they do go red and the chances are bright - then we have two days of fall to cover up for.

The markets when they closed - last they had fallen on volumes - there is a feeling that these volumes should have made us see lower levels than where we were... now now - I do not deal with volumes very well and if what people are saying is true then bulls did a fairly good job. All the same - I had written day before when we were in the middle of the Bollinger bands that if we had to fall then that was the time. It turned out to be true - a fluke maybe but neverthless. Now today we have had a second black candlestick. MACD divergence is slightly less but still positive - in the sense that the red line continues to be above the blue line. Mass index is below the 26 marker. RSI is positive but --- Uhhhh looking down maybe. TRIX is still looking up. If I were you - I would not trust the technicals too much - they are giving the direction but then that is about it. The volatility is just too much. The directions are dictated by GOD knows what. Also the volatility is around its peak so do not bet too much on the intraday swings. I will try to update once again tomorrow morning.

The nifty pivots are...

The Pivot data -
R3 3156
R2 3053
R1 2950
Pivot 2872
S1 2769
S2 22691
S3 2588

Projected High Range 2911 to 3002
Projected Low Range 2948 to 2857
Fib Projected High 3024
Fib Projected Low 2744

Hey while I was updating - US has dropped down in red.


Tuesday, November 11, 2008


I am sorry due to the busy schedule I will not be able to update - and if at all it may be towards the forenoon on 12th Nov. Sorry once again.


Monday, November 10, 2008

So the shorts did not work today ... I wonder why....

I am back in the middle of my night flying phase so the late update to the blog. So many were tricked with that one days downturn to be short? It is not only a difficult but also a dangerous game to predict the market. The markets were good yesterday - be it Asia or Europe. Now after this white candles daily - I feel that we should have a break should not be carried overboard. A break/a consolidation will be wonderful for the markets where they take a breather before going up again - that is if we are t continue going up. The pace recently of recovering from our lows has been fairly good to say the least.

Asia was all up and seeing that Europe perhaps too opened gap up - till the mid session it remained hovering around the highs then towards the end started giving off their gains. Finally Europe closed - FTSE just 0.89% up, Dax 1.76% up and Cac 1.06% up. US opened above the flat line in green but was unable to stick there for very long. By around noon the indices had slipped in red and there is where they closed - not too much down but in red only nevertheless. Dow was down 0.82%, Nasdaq down 1.86% and S&P down 1.27%. This fall was even as the massive stimulus package was declared by the Chinese.

The candle yesterday was a huge white one - a candle that can make anyone happy. On 5th Nov we had opened at the level of 3156, it is unfortunate that we could not close above it. A closure above it would have been wonderful and the point where we ended the five day rally would have been voilated on closing basis signaling a likely good day today too. The Bollinger bands remain more or less the same only - widened a bit perhaps if at all. The candles are trailing in the middle. 5 EMA is trying hard to reach up to the 20 EMA line to cross. A crossover by 5 EMA would do very well. volumes were same as yesterday. The MACD positive divergence has increased with the red line above the blue line comfortably so far. Mass index is at 26 and falling. RSI is still looking up and about to cross the 50 marker. If we have a good session today then except RSI to cross 50 marker. The slow stochastic red line is trying to cross the blue line yet again. The TRIX continues to look up. So all in all the indicators so far are fairly good. Now the markets have the last hand to deal - what will they do today? I still stand by what I said an odd break now will actually take us to higher levels - that is if we do not recklessly break the lower supports.

The Pivot data -
R3 3349
R2 3282
R1 3215
Pivot 3094
S1 3027
S2 2906
S3 2839

Projected High Range 3154 to 3348
Projected Low Range 3073 to 2979
Fib Projected High 3212
Fib Projected Low 2921

have a happy day


Saturday, November 8, 2008

Art of Loosing money......

0020 hrs 10 Nov 08: China announced a $586 billion stimulus package Sunday in its biggest move to stop the global financial crisis from hitting the world's fourth-largest economy. News to cheer? or news to take it this way that China too has realised that they deep down in a well?

09 Nov 08: I must admit that I have not made money so far but -- can always lecture others how to make money - that's how they do it on the idiot box - don't they? It is simple - just go with a gun and rob a bank - isn't it easy? No you got me wrong - I meant to say how to make money in the stock markets. See there are some genuine problems - the value of the stock is related to what is the perceived price valuations in the markets. let us say there is a company with 100 shares and held with one person each - and out of them 98 do hold the shares and do not trade. The two persons trade the shares - one day one stock trades at 10 Rs a share - so the 98 think that the value of their share is 10 Rs, second day the stock trades at 100 Rs and the 98 think that they are suddenly rich. Let us say next day for some hypothetical reason the stocks trade at 2 Rs - have all 98 person now poor? I have taken an extreme but this remains a fact - all the stock of a company does not change hands - but psychologically we are rich one day and poor the other. The second point is for the two of them who are trading - one looses and other gains - it is as simple as that.

Now let us see where we stand in all this. One of the two above is a trader and the other is retail (take trader to be FIIs or people with deep pockets and retail to be me and you) See if They have to make money then we have to loose. If we keep on loosing - then we will not come back to the game - so they have to make us think that we can win. Frankly tell me how many have made small money once a while and lost big money most of the times and are now in the game because we think that we can do it or we now understand the markets well enough to make it big? Well if you are into it for some time - then it is likely that you are of this variety - the one who has on the net - lost money and not gained.

If the above is true then what is the relevance of all this to our present times? - Well the markets have to be taken to a high where we think that we are on the right side of the markets and then the ball will be set into the motion - alas the ball that goes in the opposite direction to where we are and we have to be made a "Sucker" (term borrowed from someone - Ha!). So that is one of the reason where I feel that we will go to 3500 or 3800 or 4200 - whatever that level - where we do not expect the markets to go and then we will be where we become complacent and fall into a trap. The run up from the lows (2250) level has been too fast - the drop is too fresh in our minds - if they were to drop the markets now then we the retail will be on the right side (sitting on shorts) and then they (big fish) will not make money. So we have to be - firstly, tricked to believe that we are on verge of making big money. Secondly, we have then to be made to believe that we should part with our savings (Ahh my pay arrears) and then only will they strike. So sink it in your head - you loose this time - you loose it all. So believe in only yourself, fight it out and win.

The World markets were cool at the last closing - except for Nikkei that was trying to catch up for the drop that it did not participate in earlier - all markets were up one way or the other. Nikkei was down 3.55%, Hang Seng up 3.29% and Strait Times up 2.43%. FTSE closed up 2.17%, Dax up 2.59% and CAC up 2.42%. The US markets opened flat and then traded in a fairly narrow range to end - Dow 2.85% up, Nasdaq up 2.41% and S&P up 2.89%. So far so good.

The story on the candles was not as bright - the candle last trading day too seems to be in a bearish engulf - so take the fact that the opening was at or near yesterday's closing and it could not cross the previous day's opening on closing basis. The Bollinger bands have constricted a bet further, 5 EMA line is below the 20 EMA line. The candles are in the so called centre of the bands and they do not remain there as a rule - so expect them to start trailing the upper edge or the lower edge soon. The volumes were lower than before. MACD red line is above the blue line and the divergence is the same as before - that is good. Mass Index is now firmly below the 26.5 point so the trend (down trend) I assume is about to be confirmed. RSI has raised its head again and is good and bullish. On the Slow Stochastic the red line is below the blue line and red line has gone below the 50 marker. Hey the TRIX is looking up and that is good. Jaggu too says that the markets are Bullish.

The Pivot data -
R3 3160
R2 3097
R1 3035
Pivot 2947
S1 2991
S2 2953
S3 2735

Projected High Range 2991 to 3066
Projected Low Range 2953 to 2878
Fib Projected High 3050
Fib Projected Low 2819


Thursday, November 6, 2008

Complicated times ahead......

0700hrs 07 Nov 08: Yahoo page said "US Stocks Loose 10%" and I thought this is it. I refreshed the page again and again and the drop was struck around 5%. Then I read the whole thing - it said "Stocks loose 10% in two-day rout" - All the same - the stocks have dropped like hot bricks. Dow is down 4.85%, Nasdaq down 4.34% and S&P down 5.03%. Nikkei opened down in red and has slipped down even more - presently at 6.66% Red (see it again 666 - the number of the devil - LOL) Strait Times is down 4.68%. Be ready to for a rock and roll session again.

The increase in inflation that was given out yesterday - was minor and I am sure that the inflation will not go up - it may move sideways for some time if at all. Anyone following Crude? 60$ a barrel! count on the fuel price drop - whenever it comes will lower inflation a few points again.

06 Nov 08: Every time I sit down to as to assess what and where we are off too - I see trouble in all we see and hear. What most had expected today was perhaps that we fall well and go down - down deep. What happened previously was that those who (including retail) managed to do bottom fishing - were given handsome returns in a very short period of time - 30-35% in most cases and 50-60% and above for those who got into the right stocks. So what happens now is that ever time there is an attempt to break down - the hopefulls do what they believe is bottom fishing. That may have been the main reason that we bounced back with vengeance and rebounded back to the 3000 region - of course that did not survive and we were down back to test the lower levels. I am fairly certain that this would be seen a number of times as we test each lower level now - the opportunists will be there to check/probe/attack each lower levels. There is a same problem as we would test each higher level. Profit booking by the hopeful who see levels as low as 1500 (that's my imagination perhaps) on Nifty. Now this should keep us range bound till the time the break out is there in any direction with volumes and conviction. Do we call it consolidation? I was really expecting levels better than what we touched at present to drop back - 3200 to 3500 was my estimate - but I guess we are just too jittery to carry forward the positions. Now this battle within bulls and bears may intensify - and volatility may increase - but let me warn you - that this is opposite of what I heard on the idiot box today. Some seemingly learned people were saying that the volatility is reducing. I am at a loss to define the todays dance by Nifty as a indicator of approaching low volatility.

Asia was bad - Nikkei down 6.53%, Hang Seng Down 7.08% and Strait Times down 2.66%. Europe followed suite with FTSE down 5.62%, Dax was down 7.04% and CAC down 6.38%. US is where it all starts. US opened flat - then slowly and slowly is slipping down with every second. Dow presently - just short of the mid session is down 2.65% Nasdaq down 2.24% and S&P down 2.77%. Though there seems no indication of recovery but we may see US recovering - try to see no logic in this - just a stupid feeling. I will definitely try to update tomorrow morning.

The candles just support the Bearish engulfing pattern that they showed yesterday - The candles say - no way - we are heading down. The Bollinger band has not expanded but remain with the same width. 5 EMA is below 20 EMA - volumes were below yesterdays'. The MACD divergence is still positive and almost the dame as yesterday's. The uptrend momentum is intact and TRIX is still looking up. Hey TRIX looking up? well that's a surprise - so called leading indicator. RSI is looking down. MACD red line has already fallen below the blue line yesterday and now it is below the overbought zone - blue line is about to drop down below 80 marker. mass Index is indecisive and still hovers between 26.5 to 27. There is nothing much to the indicators really they are probably as confused as the markets. Will wait for the day to see where we head.

The Pivot data -
R3 3154
R2 3066
R1 2979
Pivot 2919
S1 2832
S2 2772
S3 2685

Projected High Range 2949 to 3023
Projected Low Range 2991 to 2917
Fib Projected High 3046
Fib Projected Low 2820

Will we breach S2?


Wednesday, November 5, 2008

What? Bulls that's all you have .... you have let me down...

0745hrs 06 Nov 08: The US markets slipped deep red and closes a bit more than 5% down. Asia has opened where US ended - more than 5% down... Bears will have a ball of a run today.

05 Nov 08: I was quite surprised when we got hammered. It was expected one of these days - V shaped recovery had all the indications to be false illusion - but whatever happened to days to fall - weeks to consolidate and then emerging trends. Everyone seems to be in a hurry to do something - bulls want to markets to recover fast - bears want to break the markets in a hurry and ofcourse I want to make tons of money in a hurry. Well I am still a long way from achieving my aims. Okay now yesterday I had argued - how the hell does it makes a difference who is in the hot seat in US - for the time being whosoever sits in that seat has nothing but tons of trouble in their hands. Name it - big problems Iraq, Afghanistan, Iran, Korea, China, Pakistan, Russia, Oil and to top it all the economic condition at home. I won't envy Obama. I hear people around - a president at age of 47 yrs or whatever - I have a different outlook. This is no age to look after the world affairs - infact I will say so much that the adventurism (or mis-adventurism) of youngsters is showing in the American way of handling things. There are some things where maturity necessarily comes with age and Politics is one of them. We had our share - young dynamic - all well but not around anymore - you should have guessed it - Rajiv is whom I am talking about. So to have celebrated his victory by going green! - believe me he is not the miracle drug that US economy needs. What it needs is a change of lifestyle of three present generations. I read yesterday on Jaggu's blog - Calofornia alone uses as much fossil gasoline as much as India or China. Is it not crazy that this nation had the cheeks to say that the growth in demand in India is going to create world wide commodity shortages. Oof that was way out of the line and let me get back on the track.

I have noticed it earlier - we react at times to the future prospect of US trend much earlier than the rest of Asia. Hey I may not be able to substantiate it but that is what it is like. Take today for example - there was no inkling from any quarter that disaster awaits the world. After all Europe yesterday was good, US was wonderful and so was Asia. But did we foresee it? Anyway to the markets now. Nikkei opened green and traded green ending 4.46% up, Hang Seng closed 3.17% in green and Strait Times was 2.14% green. Europe has already finished its honeymoon with the Obama factor. It opened red and presently trades - FTSE 1.98% red, Dax 1.55% red and Cac 2.32% red.US has opened all red Dow down 1.68%, Nasdaq 1.61% red and S&P 1.64% red. It is really too early in their trade to make predictions but the trend is likely to remain so.

The candles today show a bearish engulfing pattern and may end our short and sweet honeymoon with the bulls. It is a fairly strong reversal signal. Infact I mentioned yesterday that we were in the middle of the bollinger bands and if we have to correct it was either the time or some more run up is possible. The Bollinger bands are of more or less the same bandwidth as before. 5 EMA now runs parallel to 20 EMA line and the crossover does not seem likely at the moment. On MACD the red line is above the blue line and positive divergence remains. TRIX has not changed its bullish mindset still - may take some more to convince it to look down. Slow Stochastic red line has dropped sharply down below the Blue line and both of them are in overbought territory - so a few days worth of down side may still be there. RSI too looks down. Not bearish at the moment - but looks down. So that's it - I will be traveling 200 odd km in the night - so if I wake up and have time before rushing to the office will definitely update the blog.

The Pivot data -
R3 3510
R2 3338
R1 3166
Pivot 3068
S1 2897
S2 2799
S3 2627

Projected High Range 3117 to 3252
Projected Low Range 3228 to 3093
Fib Projected High 3313
Fib Projected Low 2897

Possible to break S1 tomorrow.


Not bad... Not bad....

05 Nov 08: I do not know who will win the Presidential elections in US. Its not that I do not care but all the same it is not about my choice or the choice that has been flashed on the idiot box. I would rather wait and see for another few hours who walks to the White House. Will Obama be good for US or India? Or will McCain do better? Will it make so much of a difference to take the country out of the mess they are in? Well I never really followed what they want to do so closely to answer any of these questions - but the rally on the eve on the elections? May be I am missing something. Well like I said earlier - all the same - what goes out of my pocket to make some money in this run. What I hear on the idiot box is that everyone is cautious and the markets are going up - ofcourse - they will go up till the time we are cautious - it is only when we will become overconfident - over leverage and invest some more - will the bears strike - in any case I have been feeling that we will achieve the levels anywhere between 3200-3500 before we hit stops.

The Global cues were good to be frank - In asia Nikkei was just covering the track that others had covered when they were closed. Europe moved steadily in one direction after opening and that is Northwards. FTSE closed 4.42% up, Dax 5% up and Cac 4.62% up. US by this time had the F&O trading in green and when the US did ipen they were in in green. they tried to dip southwards but the election day coupled with better-than-expected quarterly earning results, improvement in credit market and a report that the broader range of financial firms may receive investments from the treasury kept the markets up. Just short of the closing the profit tried to kick in but was again overpowered by the bulls. Dow closed up 305 points (3.28%) Nasdaq was up 3.12% and S&P was up 4.08%. The rally - if you call this one was fairly broad based.

This it it - I almost yelled when I saw the candles - five straight white candles shinning bright. The Bollinger bands have contracted further and that is good. The candles are now in the middle of the band. If we have to correct - then this is the place from where we head down - a bit before the 5 EMA crossover of the 20 EMA. Another good day (which is likely - taking the global cues) the 5 EMA line will cross over the 20 EMA. Volumes were not great be Okay. MACD red line has crossed the blue line and is above it - with a fair divergence. Mass Index is oscillating between 26.5 & 27. RSI is good and bullish. Here comes the twist . MACD - both blue and red lines are in overbought territory. The momentum is upwards and is good and TRIX for a change (after a long time) is looking up. So the rally is supported upwards so far. The markets are terming this as year end rally.

For the Nifty Pivot levels...
R3 3147
R2 3260
R1 3201
Pivot 3093
S1 3034
S2 2926
S3 2867

Projected High range 3147 to 3230
Projected Low range 3073 to 2990
Fib Projected High 3197
Fib Projected Low 2939

Best of luck to all. We may open between R1 & R2 and there are chances that we test the pivot during the day.


Monday, November 3, 2008

Bulls..... Dancing with the wolves...

0700hrs: US finally ended flat like FLAT. Dow down 0.06% Nasdaq up 0.31 % and S&P 0.25% in red. The elections are now what are making them indecisive. Nikkei is covering up for the day it has lost - yesterday it was closed as mentioned below and Strait Times is down 1.3%. I think we should be ready for a rock and roll day today.

03 Nov 08: Yeah! that is exactly I will term it as. Dancing with the wolves... See the bears (aka wolves) are not far away - they are intently watching every move of the bulls and very intentively that is. Today as the markets tried to stablise during the mid session - there was a strong possiblity of a sell off - but got saved some how and then the bulls took the markets to the next higher level of 3060 (given as R2 yesterday on the pivots.) - finally closing a few points down and then got adjusted for the closing at averages and was down to 3043.85 or so. Though what I see I see good but then in the back of my mind is one nagging question. Are bears waiting for the bulls to buy themselves out? Why the heck are they not even trying to strike. All the same - so far so good. Mind you the resistance at around 3200 level is going to be pretty strong - if not a bit earlier. The markets of course are doing well and may continue. Let me tell you here itself - there are no trend reversal signals still - so do not forget the downside part totally - all the same enjoy till we continue with the upswing.

Something interesting on the lighter side that I came across on net some time back that I would like to share with you all -

An Israeli doctor says 'Medicine in my country is so advanced that we can take a kidney out of one man, put it in another, and have him looking for work in six weeks.'
A German doctor says 'That is nothing; we can take a lung out of one person, put it in another, and have him looking for work in four weeks.
The Russian doctor says 'In my country, medicine is so advanced that we can take half a heart out of one person, put it in another, and have them both looking for work in two weeks.'
An American Texas doctor, not to be outdone, says 'You guys are way behind, we recently took a man with no brains out of Texas, put him in the White House for eight years, and now half the country is looking for work.'

Genesis of US problem? Anyways - back to the markets. Nikkei missed the action on the Asian markets today - being a holiday there. Hang Seng opened well into green and never looked back - finally ending 2.69% in green. Strati Times too ended in green - 4.99% up. Europe is the first ones to question the rally and opened somewhere around the flat line. remained up for the majority of the time dipped red an odd time and ended - FTSE 0.80% green, Dax 0.54% up and CAC 1.17% up in green. The US started the day with a flat but red opening. It is at the moment indecisive as the manufacturing data that has come is weak. it has slipped red three times but then again comes back in green. The markets are still not at the mid session and the markets may slip red if they do not have any hope to pin on. Dow presently is 0.42% green, Nasdaq up 0.63% and S&P up 0.18%. Basically the US can be defined as being cautiously green.

On the charts it turned out to be another good day (as was expected) Today is the fourth white candle day - baring the Doji on the 27th Oct I would have classified this symbol as Three White Soldiers and trumpeted it as a bullish indicator - but with a Doji in middle - I really do not know what to make out of it. The volumes mind you were less than last two days. The Bollinger bands have contracted some more and the 5 EMA line is closer to crossing over the 20 EMA line. On MACD the bullish crossover of the red line has happened! The Mass Index is back in the 26-27 band. And the TRIX is actually looking up today. WOW that's a big relief. The RSI is good and bullish and the Slow Stochastic too is good. The only problem that I see is that the Red line of Slow Stochastic is touching 80 marker and will step into overbought zone next.

As I am finishing this the all important pivot data is as under: -

R3 3239
R2 3173
R1 3108
Pivot 2996
S1 2931
S2 2819
S3 2754

Projected High range 3052 to 3141
Projected low range 2983 to 2894
Fib Projected High 3110
Fib Projected Low 2836

Best of luck to all. One new thing on the Blog - firstly I have added ShoutMix box on top for instant messaging. Secondly, Subscribe to the blog link has been removed. There were no subscribers except for me myself. Finally, I would appeal again - if you are somehow trapped into reading this blog then I would request you to click the "Followers" link and it will serve me as a motivating factor. If not I would still write.


Sunday, November 2, 2008

Will we?..... Won't we?.....

02 Nov 08: The moot question now is -- Will we continue on this so called rally or will we visit the lows again. Firstly - is this a rally to begin with? A hammer followed by a white candle, one doji and another white candle. All the same this is the best run for three continuous days that we have had in last 3 months. If we take a period of last six months then we had a better run than this on two occasions. First on starting on Jul 17th and second on Jul 30th. In the first run we ran up from 3800 odd levels to 4500 levels - during the second run we ran up from 4200 levels to 4650 levels. Infact some may be inclined to classify the two weeks period as one run with a minor three-four day aberration. The run up during that time was 700 points on nifty, or 850 odd points if we take the period as one run up. Last time the fall was not as vicious. This time the fall has been much more hurting so frankly to make a recovery to levels above 800-900 points run up is actually possible. So if we take the bottom at 2250 - then we should see a run up anything upto 3200 to 3500 before the serious selling again sets in. See my reading is hypothetical. Jaggu says that the run up should see a height of 3500 - actually he is much more technical/better in his reading of the markets. So frankly - I will just trust him. (You can click his name to reach his blog) So if I was to go short - I will wait for some time and not be in a hurry. Couple this with the plethora of fire fighting steps being taken around the world will help this recovery to remain so - a recovery till some more time. See there are twists and turns at every moment so do take everything I try to put across with a pinch of salt.

Well to the world markets now. Asia was all negative - actually they had already run up quite a bit as we closed for the Dipawali. So some retracement was to be accepted. Nikkei closed 5.01% down, Hang Seng 2.52% down and Strait Times down 0.43%. Europe was all green - and mind you this was after an across the board red/flat opening. FTSE finally closed 2% up, Dax 2.44% up and Cac 2.33%. US too opened flat to red and then recovered to highs by just after mid session, however by the close they were on an average 1.5% green only. All the same - they were all green. Dow up 1.57%, Nasdaq 1.32% and S&P 1.54% up. Well except for our markets the general track record of the markets is that the month of sep is generally the worst, this time Oct would have taken its place had it not been the retracement during the last few days.

On our candles the last candle has been a tall white one with a small wick on top. The candles are heading from the bottom of the Bollinger band to somewhere just below the middle. The Bands too have contracted a bit. 5EMA still is trailing below the 20 EMA but distance for once is reducing. The volumes were good. The divergence in MACD too has reduced and there is an attempt by the red line to move above the blue line. Mass index is below the 26 marker. RSI has come out of oversold zone and gives a bullish signal. On the slow stochastic the red line is above the blue line and is past the 50 marker and seems good. The force with which TRIX was looking down has slowed a bit and seems to be slowing in its fall down. On the momentum indicator the extreme value that we have got three days back (thousand or more) - we have got on only two occasions in past three years - the first one being during Jan this year. On MACD this is the extreme position seen for the first time in last 3 years. The same is the story with TRIX - it has gone below the 0.99 point only this lime in last three years. So we are in the extremes - and the negativity created is phenomenal. The bounce back too may be as bad - trapping a lot of people who went short at low levels or maybe who will short at these levels.

On the pivots for nifty
R3 3146
R2 3059
R1 2972
Pivot 2834
S1 2747
S2 2609
S3 2522

Projected high range 2903 to 3015 and low range from 2826 to 2714
Fib Projected high 2982
Fib projected low 2638

Best of luck for monday.