Sunday, December 7, 2008

Confused yet????

Don't be -- this tango as before is to keep you >>>> the retail investor on the loosing side. See the markets were oversold... oversold... oversold and we kept standing at the same place with fairly low volumes. Inspite of all this the indicators could not be turned to show bearish times. Then there was a day of thanksgiving where the markets gave a good run up inspite of not so good global cues. Then suddenly there was a talk of markets will go up, the very next day saw good profit taking or perhaps also the build up of short positions. Again in the air was a talk of – I told you so type – we will not sustain at these high levels… I feel that they have been wrong – there would be retail investor who would have not really entered the market and in any case there would have been some who would have jittered out on friday – the way the markets showed weakness. The markets should ideally continue to go up – helped by all the announcements that are coming from the govt to help – retail, banking, finance and constructions etc. I believe that this is so orchestered that the markets keep going up for one reason or the other till the elections so that the performance looks good for the govt in chair. Hey that was hypothetical – but I am sure that this would be working in some one’s mind. Prices of petrol and diesel have been dropped – still keeping some leeway in hand to announce just a little bit more – when? Ofcourse the coming round of elections will be the time. As for the positive news now – FIIs selling is not what it was used to be. They have sold just about 4-5 crores worth on friday. Petrol is cheaper by Rs 5/- and Diesel down by Rs 2/-, Repo rate has been cut by a 100 basis points against the expected 50 to 75 points by the markets. The next phase will include rate cuts by banks – though they are seeming to be defiant – but that is the way they will go – it is just a matter of time. The real estate will also get a small lease of life – I remember listening on idiot box – a lot of builders are resisting dropping prices of real estate – they might get another few weeks / months of joy – but ultimately will once again come under pressure – it is just a matter of time once again.

The global cues are good. It was really not so but some way down the line the things changed. Nikkei opened green, went red went green and closed flat at –0.08% red. Hang Seng closed green up 2.49% and Strait Times up 0.94%. Europe opened red and went down deeper red to close at the lowest levels for the day. FTSE closed 2.74% red, Dax down 4.0% and CAC down 5.48%. US was interesting – they opened red (as expected) – traded in red for  the majority of the day and then climbed all the way to close better than 3% up. Dow was up 3.09%, Nasdaq up 4.41% and S&P up 3.65%. Actually as far as US is concerned – they are bullish – but are struggling to find the pattern much like us. This may take the US markets up for a few days/weeks.

The candles are good – the Bollinger bands are still contracting and mind you the break out is yet to happen and I have a feeling that it will be a violent one – the pressure is building up. This time over the candles are along the mid of the band – give or take some and the candles look like having life enough to cross over into the upper band (mid way and above). Bollinger band had generated a buy signal on 2nifty 1th Nov. 5 EMA line is slowly and steadily going up and will cross the 20 EMA line giving a good bullish indication. The volumes were same as before so nothing really to talk about. MACD positive move remains strong and it had generated a buy on 03 Nov. Red line is above the blue line and divergence increasing. RSI is in a bullish mode – slowly and steadily moving up. On friday inspite of it being a day in red the Slow Stochastic showed a positive move by the red line remaining above the blue line. TRIX is facing up so that remains a good indication of the times to come. Like I have being saying there will be a time to short and this is not the time.

Pivot data…
R3 2941 against 2775 friday
R2 2865
R1 2789
Pivot 2745 against 2653 friday
S1 2669
S2 2625
S3 2549 against 2531 friday
Projected High Range 2767 to 2827
Projected Low Range 2814 to 2754
Fib Projected High 2853
Fib Projected Low 2668

Best of luck to everyone for a good day tomorrow.



Uma said...

cheema, I just knew tata steel was going to break out when I saw the whole of nifty bounce when bears tried to crack it further. That just showed this counter had passed out of bear hands but just to frustrate longs they cracked it down to 148 recently (I did book loss on 2 lots out of total 4 lots which I held - that's because I had decided on the SL level of 150) Anyways...bears will always be up to their game we have to be smarter than them.
If the stock breaks out over 205, next fibo level is 250. Today however I saw Nifty slow down at tata Steel resistances which shows that the stock might consolidate a little. I felt like a chump, having sold my CA160 for 29 bucks. Today it was trading at 47.
Today I even sold my CA200 but bought it back again. Even though I felt it was going to cool off a bit, I thought for once I should learn to hold. I feel bad the way I handled this trade.

S S Cheema said...

Uma I did better than you then - I sold out of TataSteel @31 (look at me smiling) - but yes paitence would have paid handsomely.
Learning never ends i suppose.

Natasha said...

Dear Mr. Cheema,
Once again I'd like to appreciate your crisp writing. Liked the way you have started including charts to explain readers...!!
Best Regards,

Gurpreet said...
This comment has been removed by the author.
S S Cheema said...

Natz: Thanks for the encouragement - I will continue trying to do better.