Friday, March 6, 2009

Is it well Or a Ravine? Update for 6 March 2009

I have been having a busy schedule in flying and that has kept me away from monitoring the markets for the last few days. Have I missed anything -- not really. Being a true Indian my idea about investments remains to be buying and keeping an asset in my hand. By nature like so many others the ultimate meaning for me to invest in the stock market is to buy, and not to sell. So as the market falls and the technical indicators point only towards sell, the market stop having any meaning for me. I will wait patiently till indicators go oversold and then I will take my pick. That by no means will be the end of woes but for once I would have scooped the stocks of my choice at the very bottom. There will be the times when we might test these bottoms again or there may not be such a time all the same I will buy in a short time to come. The second problem that comes to my mind is the choice of sectors. I would definitely spend some time over the next weekend and see what I desire. My choice may be wrong but I would rather live with that than to take the pick which is being given by the so-called market analysts. The yesterday Indian banking was the sector, today the same people are saying that it is the weakest sector one can ever think of in the present conditions.daily 04 Mar 09

Asia was not very bad when it started in the morning. There was a fair sprinkling of green in all the markets. We opened -- spent a few moments in the green and then fell to red never to look up again. Nikkei closed to the strongest up 1.95%, Hang Seng closed down 0.97% in red and the Straits Times closed down 1.66% in red. Europe had one of the worst days today. FTSE closed down 3.18% in red, Dax down 5.02% in red and CAC down 3.96% in red. US had opened in red and as of now shows no sign whatsoever of even looking up. It is the midsession now. DOW down 3.14%, NASDAQ down 2.92% and S&P 500 down 3.57%. If these are the global cues we are to open tomorrow with then I'm afraid the technicals will not matter too much in any case.

As far as the candles are concerned today was a huge black candle. It in the past the entire body of the white candle yesterday, so it can be technically taken as the third candle of ‘ three black crow pattern’. The Bollinger bands are expanding giving way for the fall to continue. 5 EMA is below the 20 E MA which is trailing well below the 50 EMA. Nothing bullish at all. The volumes were wee bit more than yesterday. The ADX is showing good strength to this downfall. On MACD the divergences on the negative side has increased. RSI is the Bearish. The only solace is that slow Stochastic has both red and blue line in the oversold territory. Mind you it has the capacity to stay here for another one to two sessions. So be prepared off another day or so of sell-off before we have any sort of relief.

Picture1Let us see how the day fared. The markets opened at the pivot levels – dropped on opening, tried to recover but could not. They did take support of the Support 1 and tried once again to recover but once again were in trouble as they could not even sustain S1. They dropped down to S2 and thankfully S2 held. It was here around these levels that the markets finished. See how supports work in form the part in this otherwise seemingly random happenings?

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

R3 2762 was 2765 yesterday 
R2 2700
R1 2638
Pivot 2601 was 2640 yesterday
S1 2539
S2 2502
S3 2440 was 2515 yesterday
Projected High Range 2619 to 2669
Projected Low Range 2657 to 2607
Fib Projected High 2689
Fib Projected Low 2537

Two more charts before I pen off. One is the Put call ratio in Nifty and second is the option pain for this month.put call ratio

Option pain



Uma said...

well? ravine? more like apocalypse lol. rm is long, it turns out. sold a put spread. I'm out...I don't think I'm ever getting the opportunity to short at 3300. too bad for me!