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.