Friday, March 13, 2009

Do we belong here in dumps? Update for 13 Mar 09

May be  and may be not. It is a matter of perception really. I feel that we do not belong here at this moment atleast but then that is all to it and I have been contradicted everyone everywhere. All well. We are function of a marketplace that is regulated by greed and fear. It was greed a year back and it is fear now. All the same the same question haunts me over and over again – do we belong here with US and Europe. Actually we Indians are stupidly proudy people. Nations win hundreds of medals in Olympics and after we win a single we are ready to pee on anyone’s head. We are the economic tomorrow but as of now there are dozens of nations that can dwarf our economy by their sectoral budget. And that is where we are linked to the world by consuming some produced elsewhere and producing some that has to be consumed somewhere else. The markets everywhere have become jittery and to a large extent connected. Why we do are not doing well is because there remains an substantial exposure by FIIs in our markets. If we were to defy the world and start going up then as the water flows from higher level to lower levels the money will flow out. It is not that now it is not flowing out – it would then flow out at un-naturally high rates from here.

We made a white candle today and once again we have got caught up in the last three candle’s body. If this white candle is not good then what will I call good? well a close above 2646 on nifty and ultimately the next resistance that is dictated by a strong candle – 2765. If we do manage above these levels then there are chances of us rallying to the next candlestick resistance of 2854 and 2948. Am I seeing the forbidden? Well not really – I feel that good global cues will take us to atleast these levels – and they unfortunately will satisfy the bear market golden rule of lower tops and lower bottoms. So Bears fear not – even at around 2900 levels we are trapped in bear hug.

Coming one to the Global cues. Asia – except us ofcourse had the fear factor in their minds and it seemed that they are not yet ready to believe in the US rally as of now. Nikkei ended 2.41% in red and Strait Times 0.80% in red. Hang Seng showed some resilience by opening green and recovering from deep red nearing close. Europe opened red and then went deeper down – but as the US recovered so did the European markets and finally ended – FTSE up 0.49%, Dax up 1.08% and CAC up 0.75%. daily 12 Mar 09Us is in its mid session – as always when I am writing the blog – but the good news is that Dow is up 2.62%, Nasdaq up 2.53% and S&P up 2.96%. Believe me it is quite an achievement to be at these levels – when they have been rallying for last three-four days. The news for this upswing – I guess everyone expected the ratings of GE’s financial arm to be cut – chopped and buried and the rating cut did happen but was not as bad as expected. “Andhe mein Kana Raja”

On the candles – the pure candle aspect I have already discussed. The volumes day before on Mar 06th were little less than average, and it was a white candle – the volumes with the next black candles were just 3/4th of that white candle and once again – with a white candle today the volumes have improved. So far so good. We have moved away from the bottom of the Bollinger bands and the middle is above 2700 – so that is the level that we should definitely see. ADX has not really showing loosing strength of bears but have seemed to pleatue off. The MACD divergence has definitely reduced. RSI seems to be showing some strength. TRIX unfortunately still looks down. So that is all – no wait – the Slow Stochastics – they are out of the oversold zone but can give us two – three day of run up till they reach the overbought zone.

So – let us lee the pivot levels for tomorrow ;-)

R3 2718 as compared to 2687 yesterday
R2 2684
R1 2650
Pivot 2612 as compared to 2583 yesterday
S1 2578
S2 2540
S3 2506 as compared to 2479 yesterday
Projected High Range 2631 to 2667
Projected Low Range 2624 to 2588
Fib Projected High 2665
Fib Projected Low 2554

Best of luck for tomorrow – may we have another good run up tomorrow. And if you have time to spare see the flash presentation below and leave some comments.



Uma said...

thank you for a well-researched post cheema! miss trading a lot...

S S Cheema said...

We have been missing you Uma - will look forward to your regular comeback.