Sunday, December 28, 2008

Major move around the corner… … point is which direction…

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Firstly why did the wonderful upmove die? Pakistan crying war? maybe… or perhaps maybe not. It would have been nice had i not been travelling and seeing the debate as to why the markets did what they did last week. There are so many reasons once again to justify both sides of the story really. There is a fiscal stimulus package that seems to be coming in the next week, the advance tax numbers have been low and that does indicate the slowdown that is happening. We have slipped below the 25 EMA that was holding out till yesterday. We have also closed below the midway of the Bollinger bands that does not speak too well about the trend either. The volumes are low so the markets can really be manipulated without really indicating the strength of the trend. In any case the trend as of now can be debated whatever but seems to point down only. There is no real indication of recovery – my problem is that the levels that I have expected the market to move too has not been achieved and this unfortunately is the second time. I guess I should stop looking at those targets – but then the gut say that we will (will) move to a little higher levels than what we have touched now before we see the lows that the markets have in store for us. I am updating this page with little lesser than ideal data that I keep in front of me while I write about the next day. As I had said yesterday I am in a train and the only contact I have with the life line of our generation – called internet is the Tata-Indicom data card and the laptop that is supposed to have 5-6 hours of juice. I am mighty impressed. Before I started on to writing this – since I had not copied the charts and the details – I started to see a movie… “The Constant Gardner” – I have finished with the movie and now I am on to writing this article and the battery is going good.

As far as the global cues go – Hang Seng was closed in Asia on 26th and while Nikkei went up and closed in green up by 1.63% the Strait Times closed in red by about 0.66%. No one out of them that can show us the direction. Europe too was closed – so no cues are good cues… no? Us was in green though the trading was lack lustre with low volumes as most of the traders prgetImageFromSession.phpeferred to remain off the hook. Dow closed up 0.56%, Nasdaq up 0.35% and S&P 500 up by 0.85%. But on the real basis the Christmas did not really get any cheer this time.

Okay there are not likely to be any embedded chart this time. So just visualise ;-). This is the fourth day with the black candle showing us the way to salvation. So that means the Doji that we saw the second time over really did call out the end of the run up. mind you the run up was not bad – from a low of 2502 touched on 20 Nov – up all the way to 3106 high touched on 19 Dec. But I still missed the levels of 3200-3500 I looked forward too.  The candle on last closing was bad and black in colour. As I mentioned earlier – we are now below the half way mark on the Bollinger bands and the lower band is trailing at 2517 and that can be our target on near term basis. As the markets go down the lower band will also reduce in value so you can have a fair idea as to where we are heading too if we are to trail the lower Band. See the volumes – no pun intended but we can hit the Dipawali lows if we continue at this rate. MACD divergence is just about in the positive and any more black candle can plunge this also into the negative divergence zone. RSI is going bad at this rate – look it at confidently dipping down. The Slow Stochastics also do not portray a good picture so see it going down? only saving grace is that after the blue line too joins the red line below the 20 marker we will be able to say that the markets are oversold. Till then – you can see it on the charts.See TRIX also carefully – it has stopped going up or shall I say looking up. So the up move seems to come to a halt. Infact now till the new year – there is a virtual holiday going on. So if there is a plan by bears or bulls – they can pull a fast one as the other party sleeps – and that is what the volumes show. The real show will start from January onwards.

Lie Doggo is what I would suggest everyone and wait for some more participants to show some interest in the markets.

Picture1 Pivot data…
R3 3076 against 3036 on Friday
R2 3003
R1 2930
Pivot 2887 against 2928 on Friday
S1 2814
S2 2771
S3 2698 against 2820 on Friday
Projected High Range 2908 to 2966
Projected Low Range 2953 to 2895
Fib Projected High 2991
Fib Projected Low 2812

See the Friday’s intraday chart? we never really breached the resistance on the up side but slided below the pivot with ease and went on past the Support 1 to Support 2