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



Uma said...

markets closed today cheema, lets pray for safety of Mumbai.