Monday, February 23, 2009

Iceberg Ahead! Update for 24th Feb 09

Will it sink out boat? against all odds I remain of a view that the iceberg is seen and we will be able to make our way around it without too much of a problem. The volumes are thinning by the day. Probably I do not have the kind of experience to read into this – but am quite sure that we do not have the kind of the volumes or the sell pressure to break the lower points seen earlier. After all if they (read bears) are to break the previous lows then they have to put in some more life and money behind the effort than what we have been seeing for last few days of candles. The last week has been brutal but that ‘go for the kill’ was still just not there. The fact remains that we did not venture into any fresh low levels so far. But yes – what it has done is that it has turned the mood bad with that lingering bad taste.

We had a day off and that is the reason I took some time off and just freaked out without bothering for good or bad. Saw a couple of movies including “Delhi 6”. The Asian markets gave a mixed verdict today. Somehow the erstwhile strong economies are the ones that are weak at the moment. Nikkei closed down 0.54% – never saw green actually. Hang Seng on the other hand opened green and then remained green thorough out to close at the best levels for the day – up 3.75%. The Strait Times too closed up in green at 2.24% up. Europe is yet to close shop for the day – they started out green but had fallen to the zero line by the mid session and thereafter had tried to recover – failed and now hovering around  - FTSE down 0.57%, DAX down 1.21% and CAC down 0.01%. Surprisingly all the financial sectors were trading with handsome gains inspite of the indices nose-diving. US had the futures trading in green and respectfully so, the markets opened green and nosedived. Dow now is 0.62%, Nasdaq down 1.64% and S&P down 0.97% down. There is nowhere to go as of now. Red seems to be the favourite colour.daily 20 Feb 09

As far as our candles and technicals are concerned – they were keeping safe so far but seems to have given ground completely to the bears. The markets tried to touch the lower level of Bollinger bands and failed as the market tried to recover somewhat. The lower level of Bollinger band is in anycase not so far out that the same cannot happen tomorrow. 5 EMA is well below – the 20 EMA and 20 EMA is well below the 50 EMA. The volumes are – as I have mentioned a little while ago also – P*ss poor. Where is the money – gold? give me a break – like crude gold will also tumble and people will get trapped hoping that they will get to see prices at which they procured it before they die of old age. ADX has suddenly switched sides after the last black candle and that is not good. MACD is with a negative divergence – but just so. RSI is bad and bearish. Slow Stochastic shows totally oversold position so some relief can be expected in last few days of this feb series. TRIX has finally had enough and changed sides with the bears showing a downside. Don’t you all feel that we need a break?  We are still in that so called narrow band and there is no breakout so far.

See how we traded on Friday – opened below the Support 2, broke Support 3 – and then the support on the upside became a resistance and we fell like a sack of hot potatos. The only saving grace – if there was one – we closed above the Support 3. I do not calculate levels below the S3 – it is not everyday that S3 is violated.

Here are the pivot levels for whatever they are worth:

R3 2869 as against 2837 on Friday
R2 2824
R1 2780
Pivot 2744 as against 2786 on Friday
S1 2700
S2 2664
S3 2620 as against 2735 on Friday
Projected High Range 2762 to 2802
Projected Low Range 2775 to 2735
Fib Projected High 2810
Fib Projected Low 2657Picture1

Okay – here is the gist. Technicals say we go down, Volumes say that the will to break lower is not there. And my heart say we go up. Why do I feel that I may be the looser in this guessing game? you wanna bet? Please vote.

In any case – some data – GTL has given a Bullish MACD crossover. The bearish MACD crossover include L&T, AXIS Bank, BHEL, JSW Steel, Hotel Leela venture, ONGC – the list is endless actually. Only saving grace is the fact perhaps that these bearish crossovers are on lower than average volumes.

Have a great day…