Sunday, March 22, 2009

We have beaten the odds… Update for 23 Mar 09

We have beaten the records as far as the present – remaining in overbought zone for more than expected time, RSI has remained above 50 for more time than expected. This can mean two things only – one that we are out of the worst that we would see and second is that the markets may take baby steps to recovery. What would have I done personally at this point? well I would have sold Nifty. There is a strong possibility of the markets moving lower over next few sessions. Though we may eventually go up – but that immediate euphoria should end now and we should ideally come back to mother earth. I have been reading, seeing and observing… I feel that frankly the kind of growth that we saw in the last decade will not be reproduced in a hurry – may be not in my generations life time. The west including US will undergo a radical change in their thinking and the period with the kind of spending with rolling credit cards is over for now. Firstly – whether they like it or now – the generation will wake up to the fact that savings is necessary, living off rolling credit is not an option and on the other hand the banks will come under a lot of scrutiny with the govt meddling with their affairs. The dishing out of credit cards and loans by touts standing on the road side will not happen. The banks will study their clients more carefully. The real estate will not run away like it did for some time now. That having said about west and the US – here is the caveat – this will be forgotten by everyone over next few years and this same stunt of living off credit and making the same mistakes will be next done by us – the developing world – India and China specifically. It is the vested interest of the developed nation that will propel towards it. day 20 Mar 09

Got carried away – back to the immediate task at hand. Let me start with the global cues. The run-up that we saw for last few days is running out of steam but like I said we may be in short term upswing so till some time to come do buy during when the markets are oversold rather than selling blindly during upswings. Asia was mixed with Nikkei down 0.33%, Hang Seng down 2.26% and Strait Times up 0.76%.  The Europe started red and then oscillated red and green to finally end green. Green yes but less than a percent so. FTSE was up 0.68%, DAX up 0.63% and CAC up 0.51%. The US on other hand started flat/green and ended with losses of almost two percent. DOW was down 1.65%, Nasdaq down 1.77% and S&P down 1.98%.

The candle on Friday made a doji. Well during the days I did not update the blog – the markets crossed the immediate resistance near the middle of the Bollinger bands and headed higher towards the upper edge. Unfortunately the markets have lost steam just short of reaching the upper edge. Here we are overbought so we will take a breather – or go down. If we go towards the2650 mark now – then we are still in the lower bottom and lower tops – on the other hand if we spend some time around here and go higher than 2953 by about 50 points then we are into short/mid term recovery. So have patience the markets will tell their direction in due course of time. 5 EMA is above the 20 EMA and what a relief it has been. It is definitely trying to attempt a crossover of 50 EMA but I am not sure if that would happen in a hurry. Volumes dropped. I could not decipher what ADX wanted to tell me so I will leave it aside for some time. RSI is good and bullish but if we take this as bear rally then it is at its peak and might correct downwards. Slow Stochastic has been in overbought territory for some time now – expect it to come southwards – and it will carry the index alongwith. MACD as of now is bullish.

Let us see the Pivot data for tomorrow.

R3 2859
R2 2841
R1 2824
Pivot 2798
S1 2781
S2 2755
S3 2738
Projected High Range 2811 to 2833
Projected Low Range 2799 to 2777
Fib Projected High 2827
Fib Projected Low 2761

Okay before I pen off see the option data of nifty – there is a huge build up of puts and perhaps that is preventing us to go down?

Another small appeal before I pen off – there is a independent blog critics who have rated this blog 6 out of ten. The rating was without my asking for – now I have a request – if you have time please click the blogged icon on the left and write a review and  rate the blog – just for getting kicks sake -- cheers



Put call ratio 20 mar

Option pain 20 mar