Tuesday, December 23, 2008

Laboured up-move….

The amount of pain the markets are having moving up seems to be extremely painful and it is no wonder that we are moving at an extremely slow pace upwards. It was expected that the bad news will continue – and the markets will cling and try to whatever good news it gets to inch up. The problem is that the good news is just soaked up like water on sand with little or no effect. The govt definitely wants a rosy picture to be there when the elections storm hits then in their face. The point is that SOPs that they are taking out are not being readily accepted by the industry/markets. Take banks for that matter – the reduction in interest rate is like a thick soup where the main ingredient is lost in the thick gravy. Airlines are hell bent on not giving out any fresh rate cuts inspite of ATF prices falling like anything over past month or two. The left has voiced against the insurance bill. The tussle seems to go on and on.

The Global cues are nothing to talk about really. Nikkei was up 1.57%, Hang Seng down 3.34% and Strait Times down 2.78%. We also dropped as Reliance shed 5%. Europe was weighed down due to banks, autos and oils. FTSE now has dropped 7 days out of 8 last traded days. It has lost 44% this year and hardly heading to ‘Happy Christmas’ The focus now seems to have shifted on what will be offered by 2009. FTSE ended down 1.88%, DAX down 1.23% and CAC down 2.31%. News of Toyota projecting first loss in 70 years due to relentless global slide in car sales coupled with rising yen has shaken up already jittery economy. Not only did it pull down auto shares across the world – it also pulled down the crude by almost 4% –back to below 40$ a barrel. Finally US that had opened flat with negative bias – never saw green the entire trading day and ended with Dow down 0.69%, Nasdaq down 2.04% and S&P down 1.83%.getImageFromSession.php

As far as the candles are concerned – we have entered a phase of low volatility – the ATR (average true range) for past ten day period on nifty has dropped to 120 from 230+ a month and a half. On the lighter side – till now the investors were loosing money – now traders are also loosing to the broker houses. The candle was black and seems that some profit taking is kicking in – We have only two days now left for the expiry. I really hope like hell that the expectations of short covering do not die like last to last month where the expiry came and went and there was nothing that happened. We are trailing between 50 EMA on top and 25 EMA below. The 50 EMA is what I would like to be below – only then new higher levels can be thought about. The volumes were miserable to say the least on nifty. Bollinger bands are expanding a bit and MACD divergence has once again increased – showing that yesterday’s profit booking or whatever did not do any damage. RSI still is good and %K and %D line of Slow Stochastics are trailing on 80 – just below the overbought levels. TRIX is still looking up. Saw yesterday? the nifty hit the R1 and then promptly settled down at lower levels. Jaggu’s TRIN is bullish – so not to worry at the moment.

Pivot data…
R3 3193 against 3176 on yesterday
R2 3141
R1 3090
Pivot 3058 against 3073 on yesterday
S1 3007
S2 2975
S3 2924 against 2970 on yesterday
Projected High Range 3074 to 3116
Projected Low Range 3104 to 3062
Fib Projected High 3132
Fib Projected Low 3004

China has cut interest rates – so that should matter and Asia is down.



Uma said...

cheema: in coming sessions nifty likely to be in band of 3055-2907, if this breaks, downside can be steep and most probably below 2800. If 3055 is breached on upside, then next target 3112, then if 3112 is breached....we might dream of 3200

(based on bollinger bands)

S S Cheema said...

Uma: I too feel that the upsteam is fizzling out. Hope you and me are wrong.