Wednesday, March 25, 2009

Not yet broken out of the trading range… update for 26 Mar 09

… and suddenly the air around me is filled with positive talk and that is all. The new mantra is – “there is no question of making fresh lows – infact we will now go on to make fresh highs” – come on guys – exactly 8 days back we were being told that fresh lows after we breach the Oct lows are very much on the market agenda – and what happened over these 8 days – am I missing something? Are you missing something – are turn around made over a period of 8 bloody days? Don’t fall for the trap at these levels. They trapped people to take positions when markets were hovering at 2600 levels and bombarding everyone with worst possible scenario and now there is a hype being build up at these levels to entice you to enter. I would suggest patience and there is no alternative to it really. Look at the chart below – we are well within the range that has been set and yet to break range Yes I do admit that the rules of the game are ever changing and look at the data of FIIs – Earlier FIIs were selling and DIIs were buying – then FIIs started buying and DIIs started selling – now I believe the DIIs have alos lost it all yet again – they are on the sidelines – not buying – not selling. Take today’s data for example: – FII s bought 348.65 Cr worth and DII s also bought a meagre 8.92 Cr worth. 3087 is the next target being looked at now.

Any way let us first see the global cues. Nikkei closed flat at 0.10% down in red, this was after spending the majority of the day in red only, Hang Seng ended with the maximum losses – down 2.07% and Strait Times down 0.86%. Europe has not closed as yet and it is trading mixed with positive bias perhaps. FTSE is down just 0.10%, DAX is up 1.22% and CAC is up 0.94%. In US there is a report of new home sales report that is second-worst but shows some rebound so markets are green DOW is up 2.02%, Nasdaq up 1.55% and S&P up 1.78%. It is not even mid session there as I have sat down earlier for updating the report and there is the entire day to go for knowing the final US closing figures.daily 24 Mar 09

As far as the charts are concerned – we had a good white candle today and we are trailing comfortably along the upper edge of the Bollinger band and that give strength to this momentum. 5 EMA is above the 20 and 50 EMA but the 20 EMA is yet to crossover the 50EMA. Volumes were slightly less than yesterday – 127% of the last 50 day average precisely. ADX is merrily swinging up giving strength to the bulls. MACD is bullish and RSI is at 66.46 – just 4 odd points below being declared overbought. TRIX is looking up and Slow Stochastic are spending another day in overbought condition. All in all we have entered a short term upswing but are now dangerously overbought so exercise extreme caution entering at these levels.

Tomorrow being expiry will rock the market both up and down and where it finally goes will be interesting to note. More interesting will be where we go next month with our elections around the corner and the crude looking upwards. I will now end with posting the Pivot data…

Let us see the Pivot data for tomorrow.

R3 3069 against 3120 yesterday
R2 3040
R1 3012
Pivot 2967 against 2856 yesterday
S1 2939
S2 2894
S3 2866 against 2792 yesterday
Projected High Range 2990 to 3026
Projected Low Range 2965 to 2929
Fib Projected High 3015
Fib Projected Low 2903

There is not too much change in put and call ratio so I am skipping posting that data. Best of luck with the trading.