Wednesday, January 28, 2009

One day to expiry…. Update for 28th Jan

Good morning everybody. It was a very difficult decision for me yesterday to give a call that the markets will go green inspite of the technicals that were hovering negative – even if they did not really have too much of strength. Picture1Even for daily basis it is difficult to go against the trend as the fear of saying wrong weighs heavily on the mind. All the same I am glad that the markets did go up – only thing that i am not too happy is that I had expected Resistance 2 to be tested by nifty that never happened. The markets opened just short of the R1 and tested it once – then confidently moved above it – and remained above – closing at 2770. The Pivot – if you would have seen is below at 2701 and R2 above at 2805.

The global cues today are mixed to say the least. Nikkei had closed yesterday in green by 4.93% and the other markets were closed. The European markets opened flat – tried to go green and failed – they then fell deep in red only to rally in the last hour of trade to end absolutely flat. FTSE was down just 0.35% and DAX down 0.08% and CAC down just 0.03%. Believe me when I say that this was an achievement of sorts. US opened green and when I saw the indices I saw them dropping to red and my heart sank – just a day of rally and they are already sinking red? but earnings from US Steel corp and American express – that managed to post profits in present times boosted the morale enough to make them go green and then remain green thereafter. DOW ended 0.72%, Nasdaq up 1.04% and S&P up 1.09%. It is Nikkei here in Asia opened flat – went green and then red that is a small cause for worry. but it too may recover by the time we open. Strait Times i up 2.35%. daily 27 Jan 09

On our candles – it was a good white candle. The candles have moved away from the Bollinger Bands and hopefully the run should be upto the middle of the bands and in the best case to the upper edge of the bands. So if you are interested in initiating shorts – then the first levels should be around 2850-2900 and second set around 3100.  As I see it we have has three peaks in 3100-3200 region and if we do not cross this resistance or whatever then the downside may be larger than what we have seen in recent times. Other than this no lower term EMA has yet crossed the higher term EMA so too much trust on this uptrend may be counter productive. ADX is still bad – DI- has looked down but the DI+ has not correspondingly moved up really.MACD still remains negative but divergence has reduced further. RSi is still negative but looks up.Slow Stochastic red line has crossed the blue line so mildly positive we can say. TRIX is still looking down and I really do not know what will cheer it up.

There were 638 stocks advancing on nifty and 544 declining and the ratio is 1.172794. The Pivot data is as under:

R3 2869 against 2869 yesterday
R2 2836
R1 2803
Pivot 2744 against 2701 yesterday
S1 2711
S2 2652
S3 2619 against 2533 on yesterday
Projected High Range 2774 to 2820
Projected Low Range 2734 to 2688
Fib Projected High 2802
Fib Projected Low 2659

Now all there is left is the issue of rate cuts – I will put across my views today – later or tomorrow. Best of luck for today.