Wednesday, December 17, 2008

Feeling confident?…

For 17 Dec 08

Slowly the tables are being turned and day by day the confidence level is being taken to the new highs – infact there was already apprehension in one of the minds on idiot box that we might have seen the bottom – wait – this is exactly the game plan. This is exactly what I have been saying for past so many days – our next fall will be when all have jumped on the train and is confident of a good rally – if you see it  - I am sure you will find it sickening. Go with this rally – to wherever it takes us but remain very very very very cautious as we reach 3200 or 3500 levels. I am sure that we will go there and I am pretty sure that we will return from there. Infact it may be a time to selectively exit  in the coming few weeks and sit tight for some time. Till that time/levels come – continue riding up. The markets shed its confused state of mind yesterday and have shown a good green tick. It did so on slightly less volumes. But then as long as it went up.

The news of the day was stolen by US by reducing the benchmark rate to 0% to 0.25% from earlier 1%. I did not have enough time to study what will be the repercussions or how it effects them – but I derive only this from my glance at it – two things – firstly, they are in deeper trouble than what we will ever see till that hits us in our face – secondly, there is nowhere to go now as far as benchmark rate reduction goes – this is the bottom – unless now they come up with something that Fed will pay from its pocket for taking money from them. I am sure that they would know this and I am sure that there will be many tricks up their sleeves – but again this it – in this particular case – they are at point Zero. The US markets reacted and closed all the way up in green but personally I would not be too happy and may like to wait for the true reaction as these facts sink in.

Well on the global from the global cues the story goes on like this – Asia was mixed with all colours visible – Nikkei red 1.12% down, getImageFromSession.phpHang Seng green 0.55% up and Strait Times  green 0.41%. Europe was green FTSE up 0.74%, Dax up 1.61% and CAC up 2.07%. The Europe had infact oscillated around the flat line with positive bias before it finally closed green ahead of the Fed decision in US.US was mildly positive till the time the Fed decision came – then it shot skywards with jubilation – Dow up 4.2%, Nasdaq up 5.41% and S&P up 5.14%. Ofcourse it will get more interesting now onwards.

Our candles are swinging the colour remains white and testing new levels – I do see as small trouble just short of the 3200 mark – but should be achievable. The Bollinger bands have widened and 5 EMA line is confidently above the 20 EMA. The MACD divergence has remained same – food for thought – why should it remain same to yesterday? RSI is good without doubt – and TRIX is even better – just short of the 1 mark and looking up. See I have had a lot of confidence in the indicator and it did indicate in advance the trend – good. It still looks up. it is the Slow Stochastic that is bugging me – Red line trails above the blue line and both in overbought territory. Again a brakes here for a day or so may be good.

Pivot data…
R3 3141 against 3107 on yesterday
R2 3107
R1 3074
Pivot 3081 against 2970 on yesterday
S1 2985
S2 2929
S3 2896 against 2833 on yesterday
Projected High Range 3046 to 3091
Projected Low Range 3013 to 2968
Fib Projected High 3076
Fib Projected Low 2938

If we open with a huge gap up then I will not be too enthused by the markets – but if they open around the flat line with positive bias – then it will touch another high today. By the way it closed at the highest point yesterday – it is only after adjusting the closing point that market was down 11 points.