Friday, February 27, 2009

Story of my day tracking the markets… Update for 27th Feb 09

Everyday I get up early as my job demands it. If I did not have a commitment at night then I try to update the blog by the previous night – mostly fairly late at night – and if I do have a commitment like night flying and some late evening get together (they are fairly common) Then I try to read the charts and update in the morning. Then there are days like today when BSNL refuses to connect me and I wait for the connectivity for me to read whatever little research I can and then post the article. 24 hours of no net connectivity was what it was like today and that is the reason I just could not post a message – leave aside a sorry message for not updating. After that I generally have flying in the morning that I finish around 10 – and after debriefing the pilots I go and try to come online to see where the markets are headed to. I then open the ICICI and indiabulls to see can track my favourite stocks. Now after a glance and once again seeing my blog / posting messages on other blogs I am off to office work. Then I go home around 2:30-3:00 and see the markets before closing. THe way the things are going – frankly I am confused. I cannot and will not speak for others – but right from jhunjhunwalla to all others on the idiot box are also changing their statements on hourly basis. Weak now, Now weaker – showing resilience, some strength returning and blah blah blah. daily 27 Feb 09The fact of the matter remains that no one really knows. The day the markets were dropping and giving red candles – I really felt that there is strength and resilience in the markets, now when they are inching up – I feel there is weakness in the market. The gold is at all time high and I feel that it has reached somewhat unwarranted levels. The crude is at such low levels that I feel it is unwarranted. What I feel is that gold should correct down and as it comes down some of the money will enter the markets and the liquidity will improve – however on the other hand the crude should see better days ahead and should swing up raising fresh worries of increasing fuel bill here along with fuelling  inflation. Well all this is hypothetical and only time can prove or disprove it.

I had expected a weak market today as yesterday – though we had a white candle – that feel good factor was missing. Then we had a weak session. the markets recovered today towards the close – and GOD only knows what we have in store for tomorrow. The Global cues are like this --- Nikkei closed flat after remaining the entire day in green to close 0.04% in red. Hang Seng was down by 0.85% and Strait Times was up by 0.04%. Japan is the worst at the moment as I see it. Europe opened green and finished green – FTSE was up by 1.73%, Dax up 2.51% and CAC up 1.78%. The US markets are topsy turvy to say the least. They were green – went red – went green and are presently red as Obama has pulled back the curtain over the 10 Year Budget plan. He has by and large signalled that they will have sweeping Health reforms and the fiscal deficit will be reduced. That he says will be partly funded by increase of taxes collected from high-income Americans. As always it will be interesting to see the US closing tonight.

Let us see the technicals – There was a nice white candle on nifty. The bodies of the last two white candles are so posed that we can take them as a single big white candle. Both inclusive – the candle pierce the black candle that we saw on Feb 20th. We have actually moved away from the lower end of the Bollinger band and the 5 EMA is looking up – may attempt a 20 EMA crossover. The volumes were fairly high and most can be contributed to the square off/rollover to the next session. The 20 EMA is around 2820-25 level so that is how – we will be comfortable only if the markets cross that level. On ADX the –DI has blipped down and the green too has blipped down. The fight between the red and green will go on for some time to come. The negative divergence of the MACD has reduced somewhat. RSI is looking up suddenly and seems bullish. TRIX still looks down and that is not a good sign. The Slow stochastic that were in the oversold territory are now mid way to becoming overbought – so make hay while the sun shines. There is all the possibility for a good day tomorrow with better participation of the markets.

Let us see the pivot levels because at the crossroads where we are – it will take a sudden and an interesting turn – whenever it does..

R3 2863
R2 2837
R1 2811
Pivot 2771
S1 2745
S2 2705
S3 2679
Projected High Range 2791 to 2824
Projected Low Range 2770 to 2737
Fib Projected High 2814
Fib Projected Low 2713

In all this I almost forgot to mention that inflation is now at 3.36% and we may have some more measures just before the ban for elections come into vogue. That means there is some good news still in the air. Best of luck for tomorrow.