Tuesday, March 24, 2009

May Day! May Day!… Gravestone Doji ahead! Update for 25 Mar 09

It would have been otherwise a fairly good day, after all the global cues all green again for some reason as we move across 3000 which would not sustain their and started to lose ground. The market ended up fairly bearish after a bout of profit booking. However the banks related to the ADR performance were up HDFC 2.33% ICICI bank up 2.44% and HDFC bank 6.31%. And can you beat it FIIs provisionally bought 501.76 Cr worth and the DIIs sold 192.99 worth.

The global markets are with Asia, closing all in green, Nikkei up 3.32%, Hang Seng up 3.44% and Straits Times after 2.54%. It was Europe that doubted this upswing, did not have the trust enough. So, after opening in green, it slipped down towards the flat line with FTSE ending 1.05% in red, Dax just 0.26% green and CAC 0.17% green. The US started its day, deep in red, but is showing signs of recovery. The US markets are asked. The midsession, and as of now, Dow is 0.27% down. NASDAQ, 1.12% in red and S&P 500 0.44% in red.Dail 24 Mar 09

The way the day started -- it could have been another day that could have ended with 100 points upswing. But that was not the way it was forced to be the markets thereafter started falling almost ending at the flat line. Ideally I would have defined this candlestick as a gravestone doji. Why I hold back classifying it as a perfect Doji is the fact that the closing on adjustment basis has been a few points worth of white body. In any case as of now we are trailing the upper Bollinger band. The five EMA has crossed over both the 20 Ema and the 50 Ema. Frankly, I would have given a few days worth of time more for this to happen. But then, like I always say the markets never asked me or asked for my opinion. The volumes have been high -- 134% of last 50 day average. The ADX has suddenly turned sides, and I do not speak with any doubt now that it is on the side of the bulls. The MA CD is bullish, with a good healthy bullish divergence. The RSI, though, looking bullish, has stopped its further climb. The slow stochastics are where they were yesterday and day before and day to day before – overbought. The TRIX is looking up.

Let us see the Pivot data for tomorrow.

R3 3120 against 3091 yesterday
R2 3059
R1 2998
Pivot 2856 against 2898 yesterday
S1 2895
S2 2853
S3 2792 against 2705 yesterday
Projected High Range 2977 to 3029
Projected Low Range 3005 to 2953
Fib Projected High 3045
Fib Projected Low 2885

The markets are surprising everyone so the next level that I would watch out for is 3081 that as per me is the upper band and I really do not expect a breakout above this level for the time being – but then who can tell. If we fail to reach that level and start a downward journey then we are going back below 2600 level for sure.

Take a look at the option data and you will do well to go on to compare the charts with that posted on 23 Mar 09.put ratio option pain