Wednesday, December 3, 2008

Hey don’t take the markets to be bad…..

0700hrs 03 Dec 08: US markets have ended 3 to four percent points in green. Before closing the markets looked like diving in red but recovered. Nikkei opened green but is now lower than the opening levels. Strait Times are about a percent and few points up.

02 Dec 08: The markets have actually held out the otherwise bad Global cues and non bothered govt here. Take a look at the crude – it is now a days a good barometer of where we are heading towards – crude up – stock up, crude down – stock down.honey Inspite of all the cues and the hype of lower targets – the markets survived and survived well. they recovered from the lows of the day – or to say the start of the day and there was actually a strong possibility that the markets would have gone green. The reason among the circles is that though is is a known fact that the production will reduce – the coming results of companies may be extremely bad – but the fact remains that the valuations at the moment are good and lower levels – see some sort of buying support that at the moment does not allow the markets to sustain fearlessly at the lower levels. It was  expected that we will not break the S2 on the lower side and so it was. Today as I write the rally in US continues neutralising upto 1/3rd of the losses the markets made on maniac monday. So far so good. The second thing that pays up in mind is that the so called recession is already a year old. Does everyone really think that this will turn out to be worse than or equivalent of “The Great Depression?” – forget it! It is bad – agreed but there will be solutions too. There is a few billion people in Asia and Africa – who given the right environment will take the consumption and demand to higher levels. Take China and Indian example. You think our demand has disappeared? It is lurking and will pop up given the right environment. I may not really approve of it but the Auto bailout plan in US seems to be around the corner and that would give another boost to the markets for once. Eventually we may fall – okay but at the moment all the indicators are pointing up.

Okay – enough! let me start with the facts at hand. The Global cues forced Asia to start low and there was no reason that came during the course of the day to take the markets towards the recovery. Nikkei opened low – dropped lower and eventually closed 6.35% down in red. Hang Seng was down 4.98% and Strait Times was down 3.02%. Except for us and Strait Times – Nikkei and Hang Seng did not attempt a recovery. Europe opened flat with a negative bias – thereafter during the course of the day the markets dived down and then recovered to close comfortably in green. FTSE up 1.41%, DAX up 3.12% and CAC up 2.35%. So far so good. – now comes the US opening. The US opened flat facing green and has now towards the mid session climbed – Dow up 2.82%, Nasdaq up 3.35% and S&P up 3.41%. There is all the likely hood of the US closing green – that is if there is no surprise that crops up. chart

On the candlesticks front the news is not all good. The third day of onslaught has now stated turning the tables. It has turned missed but weighs still a bit heavy on bullish side. The candle is a hammer. If we take last three days of candles that show down movement (cannot call it a trend) then this hammer calls for a reversal.  The Bollinger bands have expanded a bit. The 5 EMA line is looking down and no longer trying to face up to attempt a 20 EMA crossover. The volumes once again were low. MACD positive divergence has reduced a bit. RSI though still bullish – looks down. On slow Stochastic the red line is firmly below the blue line and red line has already crossed below the 50 marker. And the cherry – TRIX still looks up. I go by the TRIX’s way – it say bullish – I go bullish.

Pivot data…
R3 2774 against 2995 yesterday
R2 2735
R1 2696
Pivot 2633 against 2727 yesterday
S1 2594
S2 2531
S3 2492 against 2460 yesterday
Projected High Range 2664 to 2715
Projected Low Range 2628 to 2577
Fib Projected High 2699
Fib Projected Low 2542

We need to break up the R2 level atleast tomorrow.



Uma said...

have no fear, 2833 is near...disgruntled bears will back off and be burned.

Pokrate said...

I agree, 2833 and 3000 are near. 2735-2748 remains the major hurdle.
Stocks are negating each other moves, NTPC is shining like a star, followed by BHEL. SBI has bounced off sharply from supports.
Market have taken a U turn. BB are horizontal now.

Pokrate said...

Also, I like your different prespective. Its enjoyable to read your posts. A true blogger ! Keep it up friend.

S S Cheema said...

Thanks for the kind words Pokrate.