Wednesday, January 21, 2009

Believe me when I say it was not bad… Update for 22 Jan 09

I will say that believe me that it was not as bad it probably could have been. I say that with respect to our closing above the 2700 mark – even tough it may have been on the account of the adjustment on closing. The volumes too were not too impressive. If we have another black candle then prepare for a down swing otherwise count yourself in the same narrow band that we have been seeing for so long now. The candles had reached the lower edge of the Bollinger bands – went to – just short of the middle of the bands and then turned down to the lower edge again. Another problem that I see here is Bollinger band that has broadened a bit and turned the snout downwards. That does not seem good. More on the candles and technicals a little bit later.21 Jan 09

The world markets are just figures ticking here and there – with no direction really. Nikkei closed down 2.04%, Hang Seng down 2.9% and Strait Times down 1.09%. Europe was a bit better with mixed closing. FTSE closed in red by 0.77%, DAX up 0.5% and CAC down by 0.67%. The US is thankfully in green as of now – DOW up 0.99%, Nasdaq up 1.35% and S&P up 1.2%. It has become such a hogwash really – see the US direction and say where we are to open. If you want a bit more accurate prediction then see SGX Nifty trading, then to see where we are going for closing – look at the Europe closing. So do expect a positive opening especially if the US remains green.

The ADX shows bearish run (as if we could not see it) but the thing that I am putting across is the the strength is not there to push this trend any further – so this drop should finish. RSI is bad, MACD negative divergence is almost where it was – once again not showing any real increase of divergence. TRIX looks down and that too seems evident. Slow Stochastic seems to be turning back facing down and the red line is below the blue line.

So let us see how the day went today. The markets opened gap down as was expected but took solid support at S1 levels. I had frankly expected and chatted that we will now go up to the pivot levels – unfortunately the corporate results perhaps gave a jolt followed by the Educom rumour that gave the opportunity to the bears to break the S1 levels and move on to the S2 levels. Infact such was the momentum that at a stage before the closing it seemed that the markets will run down and see the S3 levels also but fortunately that was not the case and the markets bounced back somewhat – got adjusted for the closing and closed a wee bit above the 2700 levels – psychologically very important support levels. Take a look at the chart.Picture1 The pivot is above at the 2798 levels and the Support 3 is at the 2671 levels. So you see – could have been worse.

The pivot data for tomorrow is as under: -

R3 2884 against 2926 yesterday
R2 2824
R1 2765
Pivot 2727 against 2798 yesterday
S1 2668
S2 2630
S3 2571 against 2671 yesterday
Projected High Range 2746 to 2795
Projected Low Range 2779 to 2730
Fib Projected High 2813
Fib Projected Low 2663

Hope we will recover well tomorrow – and watch out for the reliance results – may be that make or break we have been waiting for…