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



Natasha said...
This comment has been removed by the author.
Natasha said...

Dear mr. Cheema,
The indepth mention of Global Affairs in your Blog is what makes it a 'must read'.
Thanx for Writing,

Natasha said...

For the Trading day 17th Nov, Nifty closed at 2799 so, why is 2699 mentioned in your blog?
Hope I am quoting the facts right, if you could shed some light?

S S Cheema said...

sorry for the typo - correcting it now.