Tuesday, November 10, 2009

Why I feel it is the time to drop again….

imageFirstly, I am have not gone into the kind of depth I would have normally gone before updating this blog but all the same there are some teasers that I would like to put across. Take a look at this clipping. Firstly we had a sharp fall that started 16 days back to be precise. Then we had a bounce back that was expected. Now.. Now.. This bounce back has touched the 61.8% retracement and I feel that this is what is would have been and the potential at the moment to keep going up has exhausted. The course of action that I expect in the order of precedence is – First scenario – we fall back making a lower bottom. Second option is that we consolidate here before going up again. Whatever the market does – it is pretty certain that we will see these levels or lower for a few days more.

Rest – frankly either the market knows or Ofcourse the LORD Almighty.

staying positionally short with adequate protection (options) may bear fruits…


Sunday, September 20, 2009


I am sorry - but lately I have been busy and have got orders to move to a new station. I will have to say good bye to blogging in the near foreseeable future, so - though I am still not closing the blog but will not be able to update it.
It has been a great experience blogging here and I will add it in the end here - that in all the probability I have learned more blogging here than anything else.
Thanks for being such good friend, critics and supporters.


Monday, September 14, 2009

Update for 15 Sep 09…

image image Like I said yesterday – it is not that the confusion is there in our minds only – it is there everywhere and no one really knows where, how and when we are headed too. That we have to go somewhere is – but inevitable. What is probably happening is that the positions are taken with a hope that the markets will go somewhere (mostly on the bearish side) and when the markets do not do anywhere there is a rush to square off the positions with a fear for carrying positions overnight and the markets then return to the start point. That would be a fair assumption why we are not going anywhere. Top this with dismal FII and DII interest – we are back to the start really with nothing happening. And at the cost of a repetition – it is not confined to our markets. It is happening everywhere. Look at Asia, Europe – US anywhere – the markets just not decided after moving up so much – where to go to.

image Let us look at the global cues – Asia was all red and deep red (except us of course ;’-D  ) Nikkei was down 2.3%, Hang Seng was down 1.08% and Strait Times was down 1.54%. Moving on to Europe they too opened with deep cuts but then went on to recover (something like us) FTSE finally closed 0.15% up in green, DAX down 0.07% and CAC down 0.11%. US is facing major concerns on the US-China trade terms and opened lower but as of now – just short of the mid session is hovering around the unchanged line – Dow in red 0.16%, Nasdaq down 0.04% and S&P down 0.03%. The way the things stand – the markets can make a recovery also – so will have to review again tomorrow.

daily 14 Sep 09 As far as the technicals are concerned the candle was a red one – the entire day played out in a narrow zone only with a short covering helped attempt to recovery.The market momentum definitely seems to be tapering off on the charts. The volumes are low and the chances after today have brightened to visit middle Bollinger bands. TRIX is bullish and so is MACD and RSI. Slow Stochastic have come out of the overbought condition but are bearish as of now. All in all – nothing much is happening. ADX too seems bullish at the moment.


The options data is roaming around at the same place so I will not spend time to dwell upon it too much. The PCR is 1.81 and that is the expectations of the majority speaking that the market will fall – or let us put it this way that the markets should fall. The writers of Puts will not like that situation obviously so we can still wait out for a major fall to come our way.

All in all the trend so far remains bullish and for those long do not hold longs if the markets are likely to close below 4795 those in the bear camp who are short should not hold shorts if the markets are likely to close above 4859. For the day be long above 4807 and short below this level.

May you all make money. Good luck!


Sunday, September 13, 2009

Update for 14 Sep 09…

image This is the time when the confusion galore in everyone’s minds. There is just no clarity as to where and when the markets will move. On top of it all the technicals are not helpful, Fundamentals are on shaky ground and result is – what the heck and were the heck are we off to? More high in sight? maybe! How about lows? Maybe! The FIIs buy – DIIs sell – DIIs buy FIIs sell. I think that this will continue and the sell off if it comes will be big. So many rumours floating around. So much of data pointing nowhere and still we have to go along with our days and night dutifully.

Let me first begin with the Global cues – though they are touching new highs – they seem to be in doldrums like everyone else – taking each step forward with caution but moving ahead all the same. Take Asia for example – Nikkei was down 0.66%, Hang Seng up 0.44% and Strait Times down 0.04%. Europe had some bit of more clarity and they spent time comfortably in green. FTSE was up 0.48%, DAX up 0.52% and CAC up 0.78%. US was red but definitely off their lows – and almost recovering the losses of the day with DOW down 0.23%, Nasdaq down 0.15% and S&P down 0.14%. It is more like that they are standing still in a time wrap for some event to come – some trigger to push them somewhere.

Daily 11 Sep 09 As far as the Charts are concerned – The candles for the second day is close to a DOJI - “I say close because it has a body worth 10 odd points” This just displays the power play that is happening between the bulls and the bears and no one making a worthwhile headway. Mind you this is after the bulls ripped the upper limit and surged ahead – but seems to have again got caught up in a band. As far as the Bollinger bands are concerned the markets are not violating the upper bands and it seems that the upswing will not remain too forceful in the coming days. All the same – market remain to be in a bullish phase so far.  The ADX seems to be creeping in – it has reached 17 from about a low of 11. Now it remains to be seen what it supports – the bulls or the bears when it does breakout above 20. MACD remains bullish. RSI is bullish and Slow Stochastic are bearish with the indicator in overbought zone. TRIX is bullish. So far so good as far the indicators are concerned.

imageAs far as the Options data is concerned the PCR stands (Nifty) as you would be seeing from the chart on to the left hand side the PCR is at 1.66 but the volumes seems to have dropped from 1.3 million to 1.18 million. In addition to this the Option pain points out the lowest pain in the level of 4700 Nifty. Are we heading towards this closing? I really do not know as half the month is still left waiting for a direction really. As of now the decline still seems difficult but then PCR can change if the big fish so desires.  The 4600 put now has the greatest open interest of 6.6 lacs, 4900 call 5.17 lacs, 4500 put 5.08 lacs and 4700 put 4.94 lacs, 500 call 4.3 lacs and 4000 put of 3.4 lacs. The range for the market should still be 4600 to 4900 with 4700 a support on the downside.

To sum it up I would put it across this way for the Monday markets – Global cues may remain tepid – may be because of consolidation or a correction. Technicals are bullish but getting overbought and Doji is yet to work out –so be careful. The options data says that we are not likely to fall easily but keep an eye on the PCR and the volumes – increase or drop – whatever. The picture of the PCR above is liked to the sire where you can track the PCR real time.

Ideal strategy is to remain long with a stoploss on closing below 4794, those short can keep a stoploss at closing above 4857. For the day remain long above 4806 and short below it. May you all make tons of money.


Friday, September 11, 2009

Update for 11 Sep 09…

image It has been almost a week of late night flying and there was no update on that account. A good upswing that has been there and the roles seems to have been reversed with the FIIs now convinced and buying and DIIs saying that this run up is false and selling. The same story all over again. (Reminds me of ‘Love Aaj Kal – Eko hai kahani – bas badle zamanna’). It seems that both the categories just cannot remain in sync with each other. Anyway there was a clean breakout a few days back and we are on our way up with a stop here and a stop there. Infact this is what that is happening now – with every few points of downward journey the markets has people buying into it and that is so far good and has supported the markets from a free fall. Let us see where we are off to now.

Daily 09 Sep 09 The global cues from the Europe seem to be mixed – FTSE closed 0.33% in red – and that is after seeing US recovering and coming off the days lows. DAX closed .37% in green – well it spent most of the time in green only visiting red only twice during the session. CAC was down 0.05% in red. Well the US too started the day in red but then steadily climbed to green – never to look back closing the session at the highest with DOW up 0.84%, Nasdaq up 1.15% and S&P 1.04%. The US seems to have officially called off the recession it seems and the markets ended with handsome gains in the fifth strait session. The Asia has not taken the US cues so far and Nikkei has plunged 0.5% – showing some signs of uptick now trading at 0.15 in red, Strait Times is in green by half a percentage points.

On the charts – as I see it there was a Gravestone Doji and that may show some selling pressure for a few days ahead of us. Since the FIIs have been net buyers the selling would have then come from the unconvinced DIIs and retail. The volumes have been 104% of last 50 day average so on that account cannot say that we have been overpowered. Second thing that I notice is that we have not been able to violate the upper Bollinger band – we should have been trailing by violating the upper Bollinger band if this upswing was to continue with steam. There is smart support around the 4 EMA levels and 4 EMA is at 4690 exact – so watch out for this level. If we do go below this level then the lower logical level should be middle of Bollinger bands around 4650 and the real bad downturn can come only below this level. One can never really say that this will come or not as there are reasons for strong supports along the way that I will cover as I complete this writeup. Needless so say that buy was generated on the 315 on Sep 4th. The trend line support is at 4660 levels. So that doubles the effectiveness of support available at around this level. ADX has finally started rising and is up to 16 as of today and I will still wait for the crossover of 20 to see the trend and crossover of 40 for the trend to strengthen up. MACD is bullish though mildly. RSI is bullish at 64 points and trailing above the SMA (15) at 59. If RSI is to fall below around the level of 58/59  - it could indicate weakness otherwise the party will continue. Another problem is the Slow Stochastic that are overbought and has had a bearish crossover of %K line below %D line. The TRIX too signals a rally up so far.

Now coming to a very interesting part – Options data. imageSince I had some time yesterday I took time to study it and what shows can scare away the living daylight of bears. The PCR is at 1.66 and if you think with this kind of open interest in Puts the operators will allow the markets will spiral down – just forget it. Short of some country Nuking the other I do not see a reason for the supports on the downside to be broken. I am pasting the Nifty open interest table sorted from high to low so you can have a look yourself. Put call 09 Sep 09Only relief for the bears is that 4700 levels open interest is figuring at the fourth level and we may make an attempt to approach (I say again Approach it) but to violate it – just seems too far as of now. Levels of 4600 and 4500 are just too far and supports on account of options only too strong for a meaningful downside. On the upside the level of 4900 will be a stiff level to crack. So as far as the options data is concerned – we can be range bound between 4700 and 4900 levels.

I will summarise – as far as the global cues are concerned the US is doing great but it has failed to inspire the rest of the world in real terms. The downward infection now may travel from the rest of the world to US and we may see US sobering down at these or a little higher levels. The global cues for us remain mixed with a bit of weakness. The technicals are bullish but becoming stretched. Options should keep the markets range bound giving stiff resistance for the markets to break down meaningfully. So consolidation in this band might happen and levels will be broken on the upside or lower side next month. Ideal strategy might be to dilute longs at higher levels (talking of nifty positions) and buy on dips. For those holding longs do not hold if likely to close below 4791, for those who took shorts do not hold shorts if likely to close above 4852. For the day buy if above 4790 and sell below this level.

Best of luck and may all of you make money and tons of it.


Monday, September 7, 2009

Update for 07 Sep 09…

image When I talked about the resilience of the markets in my last post I had frankly not expected the kind of upswing from the markets that it really showed. That was a fabulous turnaround that took the markets to the close it did. now like we have had multiple tests of the highs earlier – we have tested the lows also. The range is small and the breakout will happen whenever it has to. The high is at 4735 and low at 4576. There should ideally be another attempt at breaking the high once again and I am quite certain that the high will be broken – how much conviction that breakout has will remain to be seen. Look at the FII and DII data – this selling by FIIs will remain a concern whether we like it or not.

daily 04 Sep 09 The global cues were good and that should start the week on a good note. The Asia had ended the week with the Nikkei down in red 0.27%, Hang Seng up 2.82% and Strait Times up 0.94%. Europe performed better than Asia and it started in green and ended in green higher than the opening point – never visiting the red area. FTSE ended up 1.15%, DAX up 1.57% and CAC up 1.27%. US on the other hand started the day flat but went on to comfortable green by mid session and remained there only for the rest of the time – ending – Dow up 1.03%, Nasdaq up 1.79% and S&P up 1.31%. Nikkei has started the day today almost a percent up. Mind you today being Labour day the US markets will remain closed and that part of the cues will be missing so incorporate this factor in your assessment of the markets.

On the charts the markets bounced once again from the middle of the Bollinger bands not really bothering to violate the middle of the bands to test the lower band. It also coincided with the support as you would be seeing on the chart on the left. Now to this end we are very close to test the upper Bollinger Band at 4779. The range too has become so constrictive that a breakout is just a matter of time and I would still not bet on the direction of the breakout. Notice two things on the charts – the green ticks do not have relatively more volumes than the red candles. The red candles are with a little bit more volumes than green candles. Now that is the reason I say that it is difficult to say who is running out of steam. Not only that it may be prudent to point out the FII and DII data once again.The TRIX is flat with perhaps a little positive bias. imageAs far as the MACD goes the lines are overlapping each other with hardly any divergence. RSI is at 57.76 and the RSI simple moving average for 15 days is also above 50 at 54.6 – this has two things – the moving average is above the 50 point and the RSI is trailing above the SMA. As always my concern is the ADX – it is at 11 – It will surely move shortly above the 20 marker and that mind you will definitely give out the trend the markets will take in near future. put call 04 Sep 09So what I am saying is that do not read into the 100 odd points upswing – it is most likely to be temporary – one of those days run up. As far as the Slow Stochastic are concerned they have turned bullish by a cat’s whisker – so I will read it neutral. MACD is still bearish. So here we are – with nothing to read really in the tea cup of technicals.

As far as the options data is concerned the PCR is at 1.23 – resisting the markets from going into a free fall. Options pain says that 4600 is the level and till that moves the markets are signalling a hovering around this point. The greatest open interest is at 4600 Put now with 45.93 lac, 4500 put with 44.41 lac open interest, 4800 call with open interest at 36.19 lac (next bus stop around 4800 levels?) 4300 put at 33.78 lac and 4000 put with 33.14 lac open interest. So that does give us some sense as to where we are heading for.

I will summarise this in the following manner, Global cues are good. Our Charts are mixed with volumes and the ADX not playing up still. The Options data point out towards to some more upswing before we stop. All in all the ideal strategy would be to remain long. The stoploss for longs would be closing below the 4579 level and if holding shorts then keep stoploss of close above 4665 for the day. For today go long above 4644 and short below it. I wish all of you luck for today’s trading.


Friday, September 4, 2009

Update for 04 Sep 09…

imageimageWe must say hats off to the Indian markets resilience.   Under the same circumstances some time back we may have fallen like there has been no tomorrow. The Global markets are not really playing up but still we are holding on to levels that cannot be called bad really. There has been other things one has to keep in mind like the markets have not broken above 4700 levels really and that its future depends upon convincingly breaking above and sustaining that level. You can take it 4725 – 4750 level or so – it depends how you read the charts and what methodology is used. If we somehow manage to see through these two months – Sep and Oct then I feel there is some good times in store for us. Actually there was a lot of enthusiasm in some quarters that was already seeing markets at 5000 levels. There has been infact so much Put writing happening – just the signal that the markets are optimistic and that may be the soft underbelly. More on it after a moment.

The Global cues are mixed – doing the tango as I say usually. Asia had Nikkei down 0.64%, Hang Seng up 1.23% and Strait Times up 1.11%. Europe ended in red inspite of keeping flat for the majority of the session. FTSE ended down 0.43%, Dax was down 0.35% and CAC ended 0.55% in red. Europe fell on US concerns and US that has had four days of slide found some hope and pushed its way up. The US markets – past the mid session now are crawling to a little higher levels. Dow at the moment is at 0.32% in green, Nasdaq 0.47% in green and S&P 0.42% in green. The US markets too are fighting for foothold around very important support and resistance level. Nasdaq at 2000, S&P at 1000 levels. The chances are bright that the US markets will end up green – max about a percent or so.

daily 03 Sep 09 As far as the technicals are concerned – today has been the fourth red tick we have seen in the past as many days. The technicals have slowly and steadily turned bearish but some key spots are yet to be conquered by the bears – though they do seem to be in a winning streak. We are in the middle of the Bollinger bands and the 15 EMA still is 5 points below the 3 EMA – meaning that classically the sell signal has till not been generated.  MACD is just about to generate a negative divergence – but bullish still. Slow Stochastic the markets are bearish and fast moving to the oversold zone. %K is already in oversold zone and %D line will soon follow it there. TRIX is neutral – or seems like so. RSI still is bullish and has not generated the 50 crossover from top to bottom sell signal. The ADX has dropped even further down to 11 now.

Option Pain 03 Sep 09 As far as the Options data is concerned – whatever support that we are finding is due to the put writing at every 100 points in Nifty. But what is happening is that now the call writing has also started in the same earnest so the Put call ratio is 1.23. My sense is that If we go further down then the call writing will gather more  strength of momentum and eventually our recovering will become difficult. Ofcourse I am assuming that call writing will start at a faster rate it is being done now. The open interest at the various levels is 46.8 lacs put 4600, 44.85 lacs at call 4700, 41 lacs at put 4500, 38 and 36 lacs at calls 4900 and 4800 respectively. If we go below the 4500 mark then the next resistance to fall will come at 4300 nifty levels.. Just for info the call writing in Reliance is 24 lacs plus calls and just 7 lacs something puts and you think that reliance will recover?

Put call 03 Sep 09 So to sum it up – Global cues are positive a bit – the Asian markets will definitely open green and then where they go is anybody’s guess. Mine is that they go red. FIIs continuous selling will keep our markets under pressure for the time being. Charts are either bearish or turning bearish so they will oppose bulls even if they do not support bears. Option data is as of now resisting the markets to fall but may resist the markets recovering if the call build up happens as we creep lower. So a massive selloff or buy out is not likely – we might be expected to move in a range with a closing either side of the flat line.


Wednesday, September 2, 2009


Please blame my schedule for not updating -- please bear with me for another day...


Monday, August 31, 2009

Update for 31 Aug 09…

image So another month passes by and as we look back – all said and done it has been a fairly good swing so far. Now all that remains is the last day to go by peacefully and that would be another achievement. Timagehe achievement may not be too much on the Nifty closing up this month – but the fact that the Nifty fell and recovered all the losses to close above in green on the monthly basis. Well there is today to be seen still. The FII and DII data as given by the SEBI is pasted above. On the weekly basis we are doing better than other markets. That by itself should be some consolation and an achievement. Before I move on to discuss other things some points that one can keep in mind before we end this month are:-

  • PCR is generating bullish signs.
  • India VIX has declined 524 basis points in last five days to close at 33.27% last week.
  • FIIs seem to have become net buyers in out markets in the last five days. Though on monthly basis they have been net sellers.
  • Crude prices seems to be hovering around the unchanged mark ending the week –1.15% at 72.49 $ a barrel.
  • Inflation seems to be recovering and may come in positive soon. at the moment for the week ending 15 Aug it was at -0.95%.

image image As far as the Global cues on the last closing are concerned the Asia was all green except Hang Sang that closed 0.71% in red. Nikkei was in green up 0.57% and Strait Times was green 0.02%. Europe started the day green and ended green. FTSE was up 0.81%, DAX up 0.86% and CAC up 1.22%. US was confused at its best – oscillating between red and green to end mixed. Dow down 0.38%, Nasdaq up 0.05% and S&P down 0.20%. So like I said – confused. Bloomberg says that as per the consumer confidence, hosing data and Tech company earnings the recession is ending. Nikkei has opened in green and is up almost 1.77%.

image Now as far as the candles on Nifty are concerned it was a white candle but it did not touch the upper Bollinger Band. On 315 – the 3 EMA continues to be above the 15 EMA and is a good sign. Volumes recovered a bit being 107% of last 50 Day average. RSI is rocking at 62.31 and the SMA (15) for RSI stands at 53.71. ADX still trails at 14. Slow Stochastic - %k and %D lines are almost overlapping and are in the overbought zone so some caution on that account is necessary. TRIX is looking up. MACD is bullish.

Put call 28 Aug 09 The options data as of now supports longs only with the put call ratio in nifty 1.45. The open interest is – 36.73 lac Put 4500, 31.83 lac at put 4300, 30.38 lacs in call 4900, 29 lacs in 4000 put, 5000 call and 4600 put. As per this we should now have a good run till about 4900 levels unless the Options data changes due to some reason drastically. Please take a look at the graphs also.Option pain 28 Aug 09

To summarise – Global cues are good to neutral. All the indicators baring Slow Stochastic and ADX are rocking. Slow Stochastic is overbought – but like I have said many times before it has a capacity to remain overbought and oversold for fairly long periods of time. ADX – yes it is an important indicator and till the time I see the markets in an upmove with ADX crossing 20 from below – I will keep saying that ideal strategy is that of cautious longs. All those who went long should trail stoploss on closing basis – do not hold longs if market closes below 4652, for those who are still bearish do not hold shorts if the markets close above 4716. For the day go long and remain long above 4684 and short below that level. Hope that this week too rocks. Only know that historically Sep and Oct are not too good a months for markets.


Friday, August 28, 2009

Heads Operators win, Tails I loose… Update for 28 Aug 09…

image imageI would like to first get up and salute the perfect manner in which the closing of the markets was planned out that we hit the nail on the head.  It is phenomenal to see the markets singing to the tune of whomsoever the operators are. The markets were supposed to be range bound – basically due to the open interest that was there at the levels of 4600 and 4700. You can see it from the option pain chart – the markets closed to the perfection. What happened today is not important – what will happen tomorrow is extremely important. The possibilities are of breaking the range upwards or downwards and remaining range bound does not seem to be an option as of now – all the same it will be the way the markets want. The opening may be dictated by the Global cues but thereafter we should get on with the business of ‘doing something’. The verdict is ofcourse divided as I have called out so many times before so it remains to be seen where we are off too.

Daily 27 Aug 09 Now as far as the global cues are concerned – heading south seems to be the natural place to be. Asia traded fairly negative with only Strait Times ending in green. Infact Strait Times too started in red but steadily recovered to close 0.53% in green. Nikkei ended 1.56% red, and Hang Seng ended 1.04% in red. Europe spent the entire day round the flat line as there was no trigger – either good or bad. As the US opened Europe saw red and closed down FTSE down 0.43%, Dax down 0.94% and CAC down 0.54%. US had economic data where in GDP declined by 1% (better than expected), consumer spending contracted by 1% against 1.2% and jobless claims were down by 10,000. All this news dropped the US indices – but later due to drop in US dollar – led to better energy performance and that led to recovery among US – Dow ened up 0.39%, Nasdaq up 0.16% and S&P up 0.28%. Mind you there is still no good news out of US – GDP is still contracting. Though the Nikkei has opened green – the Japan’s unemployment rate has hit record high this July and the prices fell at a record pace. So all may not be good.

As far as the charts are concerned – though it was manipulated perhaps – the fact is that the markets are not touching the upper Bollinger Band. As of now the markets seem to be topping out – but like I said earlier – today will be the day that will show the correct direction. 315 remains bullish and all the EMA lines are facing up. Volumes too have been shade better. The candle was very near to a Doji but not a classical one. Volumes were shade higher than average. ADX still is trailing at 14 and mind you I went through all the charts of Nifty stocks – except for some IT stocks – the ADX is below 20 – giving indication of non trending markets. MACD has a bullish indication and a negative (read bearish) divergence. RSI is the same – Bullish with negative divergence. Slow Stochastic are overbought and one can expect a correction of sorts soon. TRIX is looking up. We have hit a roof for the third time now – if we do not push our way through it then expect a substantial drop down.

put call ratio 27 Aug 09 Though it may be too early to play out the Options data – but all the same – I will give out nifty pain and open interest. I saw someone giving out PCR for all individual strike prices on to read the greed and fear at those levels but am not sure if it works well – I would request anyone who has worked on that system to educate me if possible. The Nifty Put call ratio is 1.5 as of now with major call build up at 4900 level and Put build up at 4500 levels.

To summarise the Global cues may not be good today. Most of the indicators are bullish be with negative undertones/divergences. I would be extremely cautious in this month as I believe historically this has not been a good month for markets. Options are frankly giving a wide room to the markets to manoeuvre as of now with call build up at 4900 level and put build up at 4500. But I will say again that it is too early to read the option data for market manoeuvres as of now. Ideal strategy still would be cautions long with stop loss of closing below 4629. For those who are carrying on with shorts do not hold shorts if the markets are likely to close above 4693. For the day be long above 4651 and short below it.

Best of luck to everyone for today.


Thursday, August 27, 2009

Expiry! Update for 27 Aug 09…


So finally the month will end and this uncertainty will die with it – where do we go now? There are two equally convincing proposals that are being projected as what will be – for the next month. One say that the markets will breakout on the upside and go on to test atleast 4850 level at the very least and the second say that the markets will correct sharply and we will see levels much lower than we have imagined. As I see it the bullish version is the one that is buying more credibility with more and more people convinced that the markets are getting into the safe zone. How safe? – only time will tell. The factors favouring the upswing are – rising wedge, closing above the Psychological barrier of 4650, inverse head and shoulders, majority of the indicators that I follow. And that in favour of the bears are – no meaningful correction for a long time, China factor, ADX and Triple Swing(explanation is there on Jaggu’s Blog). Now you can have your pick.

Daily 26 Aug 09 The global cues are mixed to say the least – In Asia Nikkei closed 1.36%up, Hang Seng up 0.1% and Strait Times up 0.37%. Europe was not so lucky and it opened red – made a couple of sincere efforts to go green – failed and ended red.FTSE down 0.53%, Dax down 0.63% and CAC 0.33%. US started the session red but soon went green only to oscillate the entire time between green and red finally closing green – just above the flat line. Dow was up 0.04% up, Nasdaq up 0.01% and S&P up 0.01%.

 Option pain 26 Aug 09 As far as the candles are concerned – I have an observation – firstly the candles are not trailing the upper edge as I had expected – the most plausible reason is the cal writers do not want the expiry above the 4700 levels. So like I said earlier – the move will happen starting tomorrow onwards. The 315 generated a buy three days back and that has been good so far.All lower EMAs are above the higher EMAs so bullish run continues. Volumes have picked up but that could be due to the rollovers/expiry. ADX is just in no mood to move a bit whatsoever – I have infact tapped my screen as to whether the ADX has not got struck there only – The reading is 14 so this upmove has less meaning to it and there is no trend in place. MACD is bullish. RSI is bullish and Slow Stochastic inspite of being in bullish mode – are overbought. TRIX has also started looking up.

Put Call ratio 26 Aug 09As far as the options data is concerned the 4700 call for this month has the maximum open interest. What should be important to us now is the Sep open interest – but I should tell to that to read the data – of next month is not all that beneficial so early in the next expiry. All the same the build up of open interest for next month is (from high to low) Almost 25 lacs plus In 4500 Put> 4000 Put > 4300 Put. As far as the calls are concerned 21 lacs in 5000 call and 20.5 lakh in 4900 call. Put call ratio is terribly in favour of the bull with the ratio 1.48. So much negativity – I am bullish for the time being whatever be the outcome. Also see the option pain chart – we are ending the month at the point of minimum option pain.

Okay ideal strategy on all counts (baring ADX and overbought Stochastic) is bullish. If I read it correctly 4700 may be taken after expiry. So ideally you should have already been long with stoploss of close below 4593 and if still short for whatever reason keep stoploss of 4676 on closing basis. For the day safe to be long above 4627 and short below it. Just a word – Asia has opened weak…

Best of luck to everyone – have a ball making money today…


Wednesday, August 26, 2009

Hangman Candlestick! – so what?? Update for 26 Aug 09…

image I personally feel that we are now bullish to the point of being stupid – but then what? The markets never listened to me. The day will come when retail will be caught up in a web of self induced enthusiasm – the enthusiasm that will blind them and they will then grope in the dark while the markets will play out something unexpected. All the same till the time the party is on – remain on a edge and play out. The candle stick made yesterday was a Hangman Candlestick. Basically it comes after a trend up and has a potential to change the trend. It is perhaps not correct to use this as we are not in a typical trend and upswing (or for that matter of downswing) is of 3 or 4 candles. But all the same it can signal a reversal.

The Global cues are mixed at the best with positive vibes and some caution. The Asia had closed in the red after making attempts to go green. Nikkei was 0.79% down, Hang Seng down 0.49% and Strait Times was up 0.25%. Europe took cues from Asia and opened in red then sensing good day in US closed in green – almost at the days highest. FTSE was up 0.42%, DAX up 0.68% and CAC up 0.78%. The US opened in green and then quickly went up almost a percent plus. Thereafter it dropped to close at the levels of opening – not really flat but somewhere there. Dow was up 0.32%, Nasdaq was up 0.31% and S&P up 0.24%.

daily 25 Aug 09 As far as the candles are concerned – the markets are now pushing the bullish envelope. We are just a tick short of upper Bollinger band. On 315 we are comfortably on a – buy. But the markets have crisscrossed this lines four times earlier so a typical breakout has not happened. Like I said yesterday we can test the upper Bollinger band limit at 4747 and for the time being that should be it. The volumes increased somewhat with nifty logging average 50 day volumes. Ofcourse this is expiry week so activity increases as there are rollovers to consider, new positions to open or old ones to close. Absolutely surprisingly – ADX does not budge a bit – trailing at 14 (I hope my software is not struck) Weak – it shouts on top of its voice. Typical divergence with markets going to new highs without support of ADX. RSI is rocking and bullish at 58. Slow Stochastic is bullish  but with %k line in overbought territory. MACD has given its first bullish tick. I do have to agree that most of the indications are bullish.

The Broadband is not playing up so the options data is not loading. Pardon me for that so we go on without the options data. The global cues are still bullish and so are most of the indications on the candlesticks. Only words of caution in the winds are the candle itself – the Hangman and ADX that is not showing this upswing as a trend. The ideal strategy is to remain long with a stoploss of 4507 on closing and if short a strict stoploss of closing above 4623. For the day be long above 4591 and short below this.

Best of luck to everyone for the trades today.


Monday, August 24, 2009

Update for 25 Aug 09…

 imageSo we have the same situation wherein the FIIs are having a ball of the time purchasing and the DIIs seem to have resigned to the idea that the upswing is here to stay and it is best to board the bus. imageThe run up seems to be here to stay for the time being atleast. The entire world is getting convinced that the upswing is there to stay. Mind you that if we do test 4700 this time around then it would be the third time this level will be tested and if it breaks – which is likely – then the upper limit is way up.

Daily 24 Aug 09 Let me not waste any more time and start with the global cues. It should be left to no doubt that the global cues have had a big hand in propelling our markets ahead in a big way. The Asia today closed strong with Nikkei gaining 3.35%, Hang Seng closing 1.67% up and Strait Times up 2.65%. The Europe too opened strong – traded the day in a fairly narrow band (not unlike what is happening in our markets now a days) and closed fairly strong. FTSE was up 0.93%, DAX up 1.04% and CAC seemed to be closed – as there is no update on Yahoooooo. The US opened in green but around the flat line – went on to good highs but does not seem to be sustaining there – it is back to the flat line and if it does close red then it will be a red closing after going green after a long long time. As I write the blog the US is just past its mid session and Dow is down 0.02% in red, Nasdaq 0.25% in red and S&P down 0.13% in red. Mind you the markets touched the highest for the 2009 year before retracting.

As far as our charts are concerned the third with candle signifies thee soldiers and is generally a signal for a good time to come. The candles went past the middle of the Bollinger bands and may test the highs(upper band) at around 4736 – of course that is conditional to good global cues. otherwise we remain range bound. On 315 the 3EMA line is above the 15 EMA line so the trend is up as per that.20 and 15 EMA lines are also criss crossing each other and as of now the 13 EMA has closed above the 20 EMA line supporting the present uptrend. The volumes were a shade better than what we have seen past few days. It was 82% of the past 50 day average. Gentlemen – here lies my concern – the ADX is still trailing at 14 – and this is the reason inspite of seeing this upswing and my desire to catch it before it runs up – I exercise restraint. put call 24 Aug 09There is no strength whatsoever in this upmove as per ADX and mind you there are people who may swear by ADX. The MACD is showing all the signs of a bullish crossover and by my experience now – the MACD does not do such frequent crossovers in trending markets so this may be another false move. The crossover did not happen and MACD is still bearish. Those who do swing trading in such tight times also – for them RSI is bullish. TRIX seems neutral and Slow Stochastic are bullish and not yet near the overbought territory so bulls can breath with ease as far as this is concerned.

As far as the options data is concerned – have a look at the put build up and the call disappearing in thin air. Though we can still not call it extreme – but this level of put build up can certainly resist the markets going down – at least in this expiry. The Open interest (high to low) is as follows for the nifty contracts. Put 4400>Put4300>call 4700>put 4500>put 4600>put 4200.

imageSo to summarise – if the global cues remain what they are – then ideal strategy should be to remain long. The stoploss for the longs should be closing below 4444 and if someone is holding shorts then stoploss should be close above 4563. For intraday go long above 4545 and short below this level. Before I pen off for the night – some food for thought. The Baltic index can shed light as to what lies in store for us. It would be prudent that everyone reads the article by clicking the Index chart and get grip of what it means.


Update for 24 Aug 09…


You want me to place my bets in this upmove? See the FII/DII data – the purchasing by the FIIs does not at the moment show too much of enthusiasm. The markets are perhaps  being forced to be kept range bound – and that may remains so till the expiry. On Friday the markets moved up with a sudden drop in open interest in 4500 Calls. Now the range may be dictated by a different level in Nifty but all the same the range is likely to remain till such manipulations disappear. The second factor working in favour of the markets at the moment (negate the China factor) is the fact the globally there is a talk of being high and dry out of recession. The results coming out an the various forecasts may be pointing towards that. Finally all the world markets are waiting for me to become bullish – it is only then the bears will get a signal to strike. It will be when you me and the tom around the corner  is convinced that we are out of the woods and when we reach the other bank – we will stare with complete disbelief and the markets will fall. That they are not falling means that everyone is still not board the bull bus.

Daily 21 Aug 09 As far as the Global cues are concerned – Asia had ended down in red on Friday  inspite of an effort to recover from the lows of the day. Nikkei was down 1.4% down, Hang Seng down 0.64% and Strait Times down 0.58%. Ofcourse – Asia should open and try to recover some lost ground when it opens on Monday. Europe opened red and then steadily climbed to end at almost the highest – FTSE up 1.98%, DAX up 2.86% and CAC up 3.15%. The US too – after opening on a positive note went on to climb and end at almost the highest – Dow was up 1.67%, Nasdaq up 1.59% and S&P up 1.86%. As expected the Asia has opened with a bang – as I write Nikkei is up 3% and Strait Times up 1.44%.

As far as the charts are concerned – they display the typical confusion associated with range bound markets unable to breakout in any direction clearly. We have had two white candles and we have moved from the bottom of the fairly constricted Bollinger Band to the middle. Now either we come down – to once again test the bottom of the Bollinger band or move on to pierce the middle to go on to the upper edge. The 3 EMA line is just about 7 points below the 15 EMA line and if we have a good day then a buy signal may be generated today on 315. If we have a break up then those pacing their bets on inverted head and shoulders may be the ones cheering. Volumes are low – just 78% of the last 50 day average. Even in this upmove the ADX has not even budged an inch. RSI and Slow Stochastic have generated a buy signal and MACD is still in favour of the bears. TRIX is still looking down. So all in all you can take any stance but like bears earlier – I would be vary of the bulls too. (The ADX as shown in the iCharts is incorrect)

The Put call ratio has moved in favour of the puts. The highest Open interest in the order of high to low is 4300 Put, 4400 Put, 4600 Call, 4700 Call, 4500 Put and 4200 Put. If you observe carefully you will realise that 4500 Call has conveniently disappeared from the scene. So next level to watch out is 4600 and if we do go there then we should ideally have a Put build up at 4500 that would define the range of 4500 to 4600 till expiry.

So all in all to summarise – Global cues are rocking for bulls. Indicators on the charts started favouring bulls – Option data defined a new range – above the earlier range as the favoured range for expiry. So all in all we can test the upper Bollinger Bands. Best of luck to everyone for the today.


Tuesday, August 18, 2009

Update for 18 Aug 09…

image We seem to have come made a violent attempt to make a breakout. This has been on the lower side that has been expected by me and my bear fraternity for a long time. So many reasons that the markets were just sweeping below the carpet – and well I think the time has come for the markets to see what the lower side of the life seems like. There has been a Chinese angle to  this meltdown and I think that this was about the time that it happened. In any case if this was to happen then either this or that would have been reason enough. No justifications either side. The markets opened gap down and then the sell off just gathered strength without a respite. Look at the FII data – like I had mentioned yesterday that the FIIs do not seem in any mood to buy into our markets any longer. Now there is another thing that we are perhaps are not considering – and that is that though the DIIs are merrily pumping in money at each level – where do they have their stop losses? (If any – I am certain that since they are playing with my and your money – the stop losses are far away)image And that they will start selling at much lower levels. I pray for my mutual funds. For all those who think that the market has already dropped so much and would not like to jump on the shorts – then think again – the fall has just started and it is of global scale – if what I see purely on the charts alone then there is along way to go and that way is just pointing downwards. The markets should give a confirmation that he trend is down and down only. Okay – now I will try not to get carried away and come to the Brass tracks…

Daily 17 Aug 09 The Global cues are bearish and actually saying bearish without throwing a bucket of red paint on top of it would perhaps convey the situation a bit better. After burning every index and stock in Asia the fire went on to Europe with FTSE down 1.48%, Dax down 2.02% and CAC down 2.16%. US opened well in red and then traded in fairly narrow band to close at the lowest for the day. Dow was down 2%, Nasdaq down 2.75% and S&P down 2.43%. The Asia once again started the day in red but Nikkei is now green up 0.2% – the strait Times – now in early trades is just 0.16% down. The meltdown yesterday was supposedly due to profit taking in the wake of slower-than-expected economic growth in Japan. It has been described as one of the worst single day percentage loss in last six odd weeks.

put call 17 Aug Next I come to the Candle sticks. Frankly what I had expected yesterday was a piercing candle – that would go more than two third down the white candle we had on last Friday and that would ideally had been enough to signal a good reversal – but the markets just did not stop there and continued the journey till they took support at the 50 EMA. I have magnified and put the candles up for all to see. The candle had taken a support on 12 Aug and now 17 Aug. 3 EMA has definitely fallen below the 15 EMA and 15 EMA is just 14 points above the 20 EMA – actually poised for a fall below. Already the 315 has generated a sell – second time in last ten days. – now it has to be seen whether we bounce back vigoursly to show that we are range bound or continue down. The ADX gave a sell yesterday and today too the value is 14 – so it will only be in these coming few days that we will know whether this downtrend has enough strength to sustain. MACD remains bearish. RSI generated sell and TRIX is looking down. Slow Stochastic too has turned around but not really given a sell. All in all – majority are either generating sell or justifying a greater downfall of indexes.

As far as the option data is concerned the Put call ratio has reached 0.8866 and open interest is maximum in 4700 call and 4300 put. So on the down side the 4300 may be a difficult nut to crack. Besides this there is a build up in 4600 and 4500 call so upward journey may be as painful with 4700 being the absolute max. The option pain is minimum at 4500 – 4400 range at the moment. Inspite of reliance defying the general bearishness of the markets I was certain that it will never cross 2100 because of the highest call buildup there and now I am even more certain as basically there is only call buildup with very less put writing – so the downside in reliance may be expected more than the yesterday’s 94 Rs odd fall.

To summarise global cues remain to be bearish. On charts all seems favouring the bears though a small bounce cannot be ruled out due to the ferocity of the fall yesterday. The options are still not showing the extreme of sentiments but still favours the bears. Ideal strategy is to remain short – do not hold shorts if likely to close above 4604, If holding log best would be get off the bus at the best levels today – and do not hold longs in any case if closing below 4464. For intraday go short below 4486 and long above it.



Sell/Buy Signal

Nifty at signal

Points gained/lost since (4387)


315 Strategy Bearish Sell/17 Aug 4387 -
ADX Bearish Sell/17 Aug 4387 -
MACD Bearish Sell/06 Aug 4586 + 199
RSI Bearish Sell/07 Aug 4387 -  
Slow Stochastic -- -- -- -- No signal
Options Neutral / bearish -- -- --