Sunday, February 15, 2009

So - where was I? Update for 16th Feb 09

I has been a rally - many are calling it a sucker's rally but I would like to refrain from saying so. It has the chance perhaps to take us to levels that are definitely higher than what we have seen in these times - the bad ones. I really had been waiting so eagerly for this rally and as the luck would have it - wherein I could not even see the markets - leave aside tracking them. A visit outstation was one, the net was down and lastly the night flying phase - crazy timings out flying at mid night and returning early morning.  Before going any further – Patheja – welcome to the blog. So whether you call it a hunch or say that the charts were read right – the fact remains that after a long time of anticipating a bullish run up – we are finally in so called bullish run up. How long will it last – should be the next logical question on everyone’s mind. I have same questions in my mind as anyone else – but answers with my (MY) perspective. If it were to fall tomorrow onwards – what goes wrong? Wrong is that enough money has not been pumped in the market for some to eat and sleep tight. Infact it is now only that some have started to come back to the market – seeing it get alive. The second is that the ones who are there in the markets are perhaps too jittery – give them a shock and they all (me included perhaps) will run back into our little holes. So this is the reason I really really feel that the markets will continue to inch up – however slowly and go up to next levels. Well I might not be able to say the same for the rest of the world and that adds another angle to the entire crazy times we are living in. On Monday we have another news driven volatility – the so called interim budget or whatever name you want to give it. Asia has seen it fairly good last trading day – Nikkei was up 0.96%, Hang Sang up 2.47% and Strait Times up 1.23%. Europe was just about okay – FTSE down 0.3%, DAX up 0.13% and CAC up 1.13%. US was where so much action was – company reports, employment data, sales figures and the cherry of stimulus. And yes – the US is taking some strong steps – both financially and otherwise that will change the nation in the coming decade. 13 Feb 09

In an article Rick Newman says – this year will remain to be bad and the recovery or the signs thereof will be visible only from next year (2010) onwards in US. He goes on to describe the signs that will be visible when the economy starts recovering. The signs listed are:-

  • Improvement in unemployment rate.
  • Stability in Home prices
  • Rebuilt consumer confidence
  • Lower volatility on the stock markets
  • Economic growth turns positive.

The full article can be reached by clicking this.

Coming to our charts and our future. Candles first – Had we violated the Upper Bollinger Bands I would have been singing – the present upswing is with caution. The candle once again engulfs the bear so remains bullish. The 5 EMA had crossed over the 20 EMA and 20 EMA too should ideally attempt a crossover of 50 EMA. The volumes were not really good but the move was fairly wide based – so that part is okay.ADX is bullish and make have no doubt about it. The level I would watch out for on ADX would be 35 – the crossover should make it touch 40. I am saying touch 40 because if it crosses 40 the bullish trend would be extremely strong – and that part I am not ready to believe yet. The MACD is still in the positive divergence and that is bullish. RSI is good and above 50. RSI too is bullish. Okay now on to the problem areas – the Slow Stochastic is in the overbought zone – it can hover around here but not for more than another day or so. Second is that Jaggu Dada’s TRIN says bearish. So these are the two indications that throw caution to otherwise good sentiment.

Another good thing that may work in our favour is that the US markets are likely to be closed tomorrow – so  the likely negative cues for Tuesday may be missing and the markets may do better than expected.

Let us see the pivot levels for Monday --

R3 3042
R2 3010
R1 2979
Pivot 2937
S1 2906
S2 2864
S3 2833
Projected High Range 2958 to 2995
Projected Low Range 2943 to 2906
Fib Projected High 2988
Fib Projected Low 2876

So we are back in game – I would suggest that if the market keeps above 2950 then be long with stop loss 2950. Best of luck.

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3 comments:

Uma said...

suckers rally lol. whole market is for suckers....they should call it sucker market.

Meher said...
This comment has been removed by the author.
S S Cheema said...

I think I too made it a mistake by not going the the general feel of the suckers rally.

Thanks - hope to update on time tomorrow.